Opec

[LuvOrlando]

But in your first & second posts, you are trying to lay the blame for our economy at OPEC's doorstep.

My point is this, those that invested in mortages depended upon banks to not qualify people for loans that had no way of paying them back. But the bankers did grant risky loans, which boosted the housing market to artificially high prices. So that cycle was doomed to collapse eventually, any way.

Then, as the housing market began to cool, both those that made a nice profit "flipping" houses, and those that invested in mortgages, pulled their investments...leaving the banks short on funds. Their brokers and advisors then recommended investingin energy futures, specifically oil. Telling them the price would go through the roof...which it did for a short time, again encouraged by overzealous investments in a market that had been stable, and growing slowly for years. The futures market had a sudden boom as a result. But again, reality could not support a market artificially inflated by rapid investment and profit taking. Same exact cycle as the housing market, only in fast forward panic mode. Of course the price was going to fall, there was plenty of supply with falling demand.

Sorry, OPEC has very little to do with our crisis, it was caused by good old fashioned American greed.

OK, but why was it that Mr & Ms American couldn't pay their mortgages in the first place? A shrinking wallet. What was the first blow? Rising prices for gas. Why did the investors pull their money out of investments of all kinds? Because Mr & Ms American needed their investment money to make ends meet because the prices of things were going up faster than their wallets could keep up because gas got more expensive which made everything else more expensive. Beyond this you are correct, all that was missing was the underlying catalyst.

 

[Chuck S]

OK, but why was it that Mr & Ms American couldn't pay their mortgages in the first place?

Since the housing meltdown started before the price of oil went through the roof, I would think it was because banks over-qualified people seeking loans, selling them on low interest adjustable rate loans. The first blow was the rising rate on adjustable mortgages. When those rates adjusted up higher, they THEN could not afford the increase in mortgage payments, the housing market began to collapse and THEN the mortgage investors pulled their money to invest in oil futures which drove the oil market to an artificial high. The housing market was the start of the snowball, the oil prices added a foot of fresh powder on a down hill slope.

 

[LuvOrlando]

Colleen, I am totally with you on buying American. But, today's world has made it so very hard to recognize what is or isn't in season. I do go to my local farmers market but the whole thing could be a marketing ploy and I'd never know it. I mean I know apples and oranges but as for the rest, I am sorry to say that being a city girl made me completely ignorant of the whole world of farming.

Does anyone know if there is a resource that tells what state makes what foods and what brands distribute wholly American goods... what about industry provided info such as potato farmers or corn farmers reporting etc. When I go shopping I usually just make my produce selections from big unmarked bins and only very rarely do I notice any signs about foreign origin... I always just assume its all American or they'd have to say so, but I think I have been duped.

I think I will make it a point to talk to the produce managers and ask why the origins of the fruits & veggies aren't prominently displayed. Maybe an inquiry might get them to thinking plying on American patriotism might get more sales... it would be a win-win. At least I can try.

 

[LuvOrlando]

Since the housing meltdown started before the price of oil went through the roof, I would think it was because banks over-qualified people seeking loans, selling them on low interest adjustable rate loans. The first blow was the rising rate on adjustable mortgages. When those rates adjusted up higher, they THEN could not afford the increase in mortgage payments, the housing market began to collapse and THEN the mortgage investors pulled their money to invest in oil futures which drove the oil market to an artificial high. The housing market was the start of the snowball, the oil prices added a foot of fresh powder on a down hill slope.

I respectfully disagree, the price of gas started to rise first. People do not default if everything else remains a constant. There is always a catalyst. Also the Federal Funds rate is only raised to tighten the money supply in response to indications of inflation. Inflation is the relative increase of a standard grouping of goods and services. Inflation is caused by 2 main triggers. #1, the money supply increases giving everyone more money to compete for goods and services which raises demand which in turn raises prices further still on the same limited supply until supply can equalize with demand. #2, goods and services themselves become more expensive. When gas began to rise in price altering the money supply had little effect because the increases had nothing to do with the inherent value of our money. (Well., the dollar was low vs international values but that's an entirely different mess so I'll avoid it right now)

I think altering the money supply doesn't work that well anymore, as seen in the Regan era in stagflation, probably because of the loosening of usury laws & rise in credit availability which gave even the poorest people purchasing power. The Federal Reserve, and Federal Funds Rate, system was set up to inhibit the ability of the money supply to grow unchecked. But now the cats among the pixies (to quote Mrs Fig from Harry Potter) so to speak and there is little we can do to recall things.

I do lay the blame of this whole mess at the feet of OPEC... they pulled the trigger. BUT, and its a big but, we gave them the loaded gun. We are complicit in our own crisis. Our publicly traded businesses ultimately only answer to stockholders who want to see more & more gains. And so, when our jobs went off to other countries no-one cared because those 401K's were still growing, after all reducing costs improves the bottom line.

Know what I still don't understand? Where are all the Economists? Why is it I don't see any of the big shot politicians asking for help? They are totally in over their heads yet they keep on the same way they've been going all along

 

[declansdad]

Please see my 1st and second posts. We, as a nation, really have to stop the application of our own priorities to the rest of the world. The reason they do it is because they are more interested in winning than in profits. Even this country was willing to go without not too long ago during World War II when we as a nation accepted the sacrifices associated with the War effort such as rationing etc. Now today, we would never collectively do any such thing, but our behaviors are our own culture's peculiarities and do not necessarily apply to the rest of the world. I do not think it is unreasonable to accept that a person, any person, would go against the wave if he/she or even an entire culture felt it was in their best interests to seek out an alternative goal.

I have no idea what you are trying to say with this post, but your first posts tried to lay the blame of the crisis at the feet of OPEC.

Don't get me wrong, i am not out to demonize an entire culture. What they believe and what I believe have zero to do with each other as far as I am concerned. However, it is no secret that Judaism, Islam and Christianity all share the same family tree. There were great schisms where-by each differentiated from one another and became separate. Neither the Jews nor the Muslims accept Jesus as the son of God (no judgment here, its simply a fact) yet they hold onto the original beliefs so to both of them Christians are heretics, and each sees the other in the same light. Now, how each is called to handle heresy is open to interpretation. Just look up the definition of heretic and you'll see this term is being used properly. This is an ancient issue not easily resolved.

It still it a very big stretch to relate the economic crisis to the differences in religion.

The reason people couldn't pay their mortgage was because they couldn't afford them i the first place. The didn't have toprove income to get the mortgage and they were being given mortgages for more than they could ever afford.

 

[Chuck S]

According to charts I've seen the gas price went up at the same time the number of foreclosures filed increased. Since foreclosure paperwork take a while (usually at least two to three months), the housing/mortgage market was already starting to flounder before oil prices started to soar. Which supports the idea that the housing/mortgage investors pulled out, and then invested in oil, which artificially inflated the oil/gas prices.

 

[LuvOrlando]

I have no idea what you are trying to say with this post, but your first posts tried to lay the blame of the crisis at the feet of OPEC.



It still it a very big stretch to relate the economic crisis to the differences in religion.

The reason people couldn't pay their mortgage was because they couldn't afford them i the first place. The didn't have toprove income to get the mortgage and they were being given mortgages for more than they could ever afford.

The point is that economics is a SOCIAL SCIENCE and, as such is purely relative to the society in which the model operates. For example, shellfish selling for 10 cents a pound would fly off the shelves in most regions of the country... however, that same great sale would be irrelevant in a strictly Kosher neighborhood. Same goes for a steak sale at a Restaurant on Friday nights during Lent in a strictly observant Catholic neighborhood. The same could probably be said of a great sale on Alcoholic Beverages in a prominently Mormon community. This is my one and only point...regardless of how great the deal is people will not participate (or adhere to commonly held assumptions & beliefs) if a separate set of rules dominates and this is true in both Micro & Macro-economic situations. Surely you've heard of demographics, which is the corporate manipulation of these proclivities.

I was curious about how we could solve the dilemma, and am stymied over why is it so much time is wasted dissecting dialogue. No wonder nothing ever gets done in politics.

 

[LuvOrlando]

According to charts I've seen the gas price went up at the same time the number of foreclosures filed increased. Since foreclosure paperwork take a while (usually at least two to three months), the housing/mortgage market was already starting to flounder before oil prices started to soar. Which supports the idea that the housing/mortgage investors pulled out, and then invested in oil, which artificially inflated the oil/gas prices.

http://www.pennsylvaniagasprices.com/retail_price_chart.aspx

At least here the jump began in March 2007

 

[Chuck S]

http://www.pennsylvaniagasprices.com/retail_price_chart.aspx

At least here the jump began in March 2007

Actually, it hit a peak in May 2007, dropped, and then hit the same level iin March 2008, then climbed from there.

 

[declansdad]

The point is that economics is a SOCIAL SCIENCE and, as such is purely relative to the society in which the model operates. For example, shellfish selling for 10 cents a pound would fly off the shelves in most regions of the country... however, that same great sale would be irrelevant in a strictly Kosher neighborhood. Same goes for a steak sale at a Restaurant on Friday nights during Lent in a strictly observant Catholic neighborhood. The same could probably be said of a great sale on Alcoholic Beverages in a prominently Mormon community. This is my one and only point...regardless of how great the deal is people will not participate (or adhere to commonly held assumptions & beliefs) if a separate set of rules dominates and this is true in both Micro & Macro-economic situations. Surely you've heard of demographics, which is the corporate manipulation of these proclivities.

I was curious about how we could solve the dilemma, and am stymied over why is it so much time is wasted dissecting dialogue. No wonder nothing ever gets done in politics.

You started this thread by stating the OPEC's actions were an act of war, you said that the religious differences were a factor, you have tried to explain economics, and even threw in a statement about demographics (which are statistics which are used to help define a market by the way); what do those things have to do with solving the economic crisis?

OPEC is not the cause of this problem. They have stated all along the speculation drove the price of oil not a shortage. And they were right. THE control a large portion of the supply. If they feel the need to reduce the supply, they can do that. It is part of the something called the theory of Supply and Demand and it is one of the ways a market works.

 

[LuvOrlando]

Although the discourse is interesting ,this has just gotten too far out on a tangent. I keep defending myself yet I get no pay-off since no-one is interested in solutions, and that was my reason for starting the post.

If anyone out there is actually interested in discussing potential solutions I am extremely interested. Otherwise see you elsewhere on the DIS

 

[rie'smom]

The OPEC countries have every right to control oil production. The idea is to get our troops out of Iran not send them into other Middle eastern countries and that's what it would take for us to tell them how much oil they can produce.

The recent economic mess is due to our own (country,bankers.etc. not necessarily you and me) stupidity and greed. Why should we expect anyone else to clean up after us?

 

[declansdad]

Although the discourse is interesting ,this has just gotten too far out on a tangent. I keep defending myself yet I get no pay-off since no-one is interested in solutions, and that was my reason for starting the post.

If anyone out there is actually interested in discussing potential solutions I am extremely interested. Otherwise see you elsewhere on the DIS

Why did you say OPEC performed an Act of War? This is why I have been questionning you.

 

[LuvOrlando]

Because in all the history of the world Empires are seldom lost on the battlefields. Empires are lost when they lose control of their finances, and the empire's finances are the people's finances. Everyone acts like the US is indestructible, and its not, other empires have come & gone. A strike at our wallet such as this is an act of War in my opinion, and a much more lethal blow than any that can be leveled on any battlefield or by any weapon.

In my opinion, OPEC is not being driven by greed at all. If what they wanted was money they would have left things copacetic, they were making more than enough. No, I believe their intent has been insidious malice all along.

This is my opinion no more and no less.

I started this post because everyone around me, here & in the real world, is so off target with worrying about who will get into the White House that we have forgotten to use our voices to make DEMANDS of our leaders. The target concern should be our Economic Stability, not who sits in that Oval office. I really don't care who gets in, I just wish We the People would start asking our Leaders to come up with reasonable do-able solutions. I was wondering if anyone out there sees the same issues as relevant as I do, and I'm afraid the answer is a no.

 

[Chuck S]

Actually, most of history teaches us that "Empire Building" is what bankrupts societes. Empires are expensive to police militarily and maintain. The Roman Empire, Britan, Soviet Union...while England is still around, their Empire Building days cost them dearly, nd in fact is still in play today. Remember, it the British that carved up the Middle East and "civilized" it in the first place.

The same type of "Empire Building" and "world policing" that we seem to be attempting in Iraq. Once Saddam was deposed, we are the ones paying to rebuild and maintain the country.

 

[LuvOrlando]

Actually, most of history teaches us that "Empire Building" is what bankrupts societes. Empires are expensive to police militarily and maintain. The Roman Empire, Britan, Soviet Union...while England is still around, their Empire Building days cost them dearly, nd in fact is still in play today. Remember, it the British that carved up the Middle East and "civilized" it in the first place.

The same type of "Empire Building" and "world policing" that we seem to be attempting in Iraq. Once Saddam was deposed, we are the ones paying to rebuild and maintain the country.

Most of your thoughts do not altogether contradict mine. Having large expenses historically bankrupts societies, on that we seem to agree. It seems however, that you believe outside catalysts have no measurable influence while I believe they have an enormous influence.