Sub-Prime Reporting

Friday, August 24, 2007

Transcript

Only after the stock market tumbled did the so-called sub-prime mortgage market make its way to the top of newscasts and front page headlines. Dean Baker, co-director of the Center for Economic and Policy Research, says the story should have seen more coverage sooner and that discussion should increase as central banks intervene.
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Comments [4]

Phil Henshaw from NY NY

Oh come on... how can you possibly address "fundamental causes", as you claimed to do today, without asking why and how we designed the financial system to be vulnerable to destabalization?? Please get someone who thinks about complex systems and their structures making them responsive and resilient, and then unresponsive and unresilient, and have a real talk about our real problems.

I complained to you that the press wasn't addressing the causes and you tried. Thanks very much. Now I'd like you to ask the obvious open questions you don't already have an answer for. Please try again.

Sep. 21 2008 03:16 PM
Phil Henshaw from NY NY

Why does it seem that Barak is attracting such an excitable but highly uninformed following? Is he falling prey to the success of empty 'sweet talk' in approaching the social networking crowd? It's a huge social system event unfolding in any case. Good to watch... and bringing them in in this way not necessarily good for the nation.

Feb. 10 2008 09:51 AM
Phil Henshaw from NY NY

The media is missing nearly the whole issue here. The question about whether the daily report is optimistic or pessimistic is informative seemed to be answered that it's informative if it's good news....! The reality is that the markets have complex natural balancing mechanisms, i.e. the whole reason they work as you learned in Econ 101. What happens when these natural balancing systems are push to the point where they misbehave? The do what all natural systems do when their steering mechanisms can't catch up... they start fishtailing. A great example is in this quarer's S&P 500 movements displaying fluctuating overshoots to collapse: http://www.synapse9.com/issues/S&PmovementsAug07-L.jpg

From a natural systems view, there's a huge amount more to say about this sort of thing, regarding all the eco-system behaviors of the economies that are largely out of our control and very critical to our wellbeing. It would be great if OTM could find a way to begin opening our eyes to the real world we live in.

Aug. 25 2007 07:34 AM
Jakes Loves from NJ

This story pulsed through entire swatches of NJ, in that dozens of families in Somerset County -- where we moved a few years ago from Brooklyn -- bought $150K homes for $400K assuming they could flip them for a similar profit once their adjustable mortgage rate kicked in. Many minorities -- black and Hispanic -- buying from whites, who had settled the area but with children moved away were no longer interested in those $10K tax bills on $250K homes.

In about 2005 the due date seemed to arrive, For Sale signs up and down every street, then 06 came the foreclosures, angry parents and many empty homes.

What's left are the "communities."

The so called local paper (in this case a Gannett) ignored this amazing story entirely, and obviously it got ignored elsewhere as this story played across the nation. Is "business" really a "story," after all??

It only came to light once the 212 banks had their bubble pierced by the effect of so called sub primes reducing their liquidity.

Too bad there was no coverage for 5 years -- 1600 days! -- of the middle class, or this would have been a story when the expression "sub prime" whitewashed the practices by those drunken sailors running lending to the unqualified -- at the expense of ordinary couples earning $100K-$250K who could no longer afford a middle class life unless they overspent.

Aug. 24 2007 10:27 PM

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