[Info-vax] HP stopping VMS paper documentation ?

[George Cook]

In article <4ed91094$0$2239$c3e8da3$76a7c58f at news.astraweb.com>, JF Mezei <jfmezei.spamnot at vaxination.ca> writes:
> George Cook wrote:
> 
>> The deficit as a percent of GDP was not shooting up until 2008. 
> 
> This was a statistical anomaly. Consider that a lot of the business
> activity went towards building homes that the economy couldnt sustain
> and then selling them to people who couldn't afford a home.

It's true that part of the average 3% real GDP growth from 2002 thru
2007 was fueled by housing.  But a little slower growth in housing
(enough to prevent a major bubble) would not have seriously impacted
GDP growth (the impact would be in tens of a percent).  Consider that
places like Las Vegas would have been able to sustain their enormous
growth in housing if the bubble hadn't burst in such a catastrophic way.

> In essence, the country borrowed prosperity by building homes now and
> paying later. And the world payed big time when it was realised there
> was nobody to pay for all thsoe homes and the banking system collapsed.
> 
> Had USA banks not played tricks repackaging bad mortgages and spreading
> their infections to a large array of finnancial products all around the
> world, the small retail banks wouldn't have been able to continue to
> issue mortgages to people who couldn't afford them because the larger
> banks wouldn't have been able to repackage those.
>  
> If it had just been the issue of issuing mortgages to people who
> couldn't afford them, then only fanny may/freddie mac would have gone
> under because they would have inherited all those bad mortgages.

JF, you are a little off base here.  My last refinance was from a
community bank thru fanny or freddie (I forget which one) which then
sold it to Chase.  It was definitely not a sub-prime mortgage.  Fanny
and Freddie mixed good and bad mortgages together and sold them to the
big banks like Chase and Bank America.  The real problem started when
private investment firms began acting like Freddie and Fanny except
that they were purchasing and packaging mostly bad mortgages.  When
the bubble burst, the private packages pretty much became worthless,
and the Fanny and Freddie packages lost a large percentage of their
value.  So even the large banks who played it safe (i.e., bought
mainly from Fannie and Freddy) took a major hit.

> So the loose regulations allowing fanny may and freddie mac to issue
> mortgages to anyone were not the sole cause of this. Abuses by Wall
> Street Bankers to take advantage of this multiplied and spread the
> problem to a worldwide scale.
> 
> Also, it is not clear whether the GDP, if averaged between 2000-2009 (or
> 2010) would have shown sigificant growth.

Even counting 2010, the real GDP growth was over 20%.  The average
annual growth was approximately 2%.  Not great, but almost enough to
mantain full employment. 


George Cook