Are You 'Occupying' The Right Place?

[TheGrunt]

Dear Occupy Wall Street, ...

I get it – people are angry. Very, very angry. I’m angry too. And Wall Street sure makes a great scapegoat, hence the Occupy Wall Street protest. Wall Street is a symbol of the “greed and corruption” that took over America and caused this whole mess.

But let’s take a minute to examine the facts and see if we can’t find some better scapegoats:

In 1997 Andrew Cuomo, the Secretary of Housing and Urban Development under Bill Clinton, allowed Fannie Mae to reduce the standards by which they would secure loans. This helped create the entire subprime category. Was this a bad thing? Of course not – it allowed more people to leave the ghetto, move to the suburbs, and achieve the American Dream of owning a home. Who knew that “Dream” would turn into a nightmare in a mere decade. Cuomo is not Nostradamus. We can blame him of course, but he had good intentions despite the negative results.

We can blame the Federal Reserve of course. They lowered interest rates after the dot-com bust so much that there was no way for anybody to achieve safe, steady returns using conservative investments like bonds. Everyone — you, me, retirees — wanted higher returns for their 401(k) and pension plan. So we went to the banks and said, What can we do? And the banks said, Well, you’re the ones asking for higher yields, so here it is. And they bundled together all the newly made subprime mortgages into mortgage-backed securities (MBS) so that the average guy could finally get some yield since the Federal Reserve was blocking all other alternatives. So if you want to occupy the Federal Reserve, go to Washington, D.C. Of course, they had good intentions too. They wanted people to stop buying bonds and start buying stocks. And it worked! Until it didn’t.

And what about the banks who bundled together these mortgage-backed securities? I don’t know, you and I asked for those securities through our 401(k) plans. So they were just responding to demand, right?

Fine, so what about the hedge funds. Suddenly they saw these mortgage-backed securities yielding 10% and immediately bought them up. They were greedy! But weren’t they just trying to find safe returns for their investors? Either way, the hedge funds aren’t on Wall Street. Go occupy Greenwich, or Park Avenue — but not Wall Street.

But then investment banks like Lehman saw what the hedge funds were doing, and they started doing it too: scooping up as much yield as they could, risk be damned! Greed! Again though, this was a handful of CEOs, many of whom have been fired from their jobs. I’m not trying to apologize for them. But let’s make sure our anger is pointed in the right direction.

Which now brings me to the biggest culprits yet: the accountants! Right in the middle of all of this mess, the Financial Accounting Standards Board (FASB) changed GAAP accounting rules so that you could no longer mark a mortgage-backed security according to your own statistical analysis. You had to start marking it down as soon as there were the slightest defaults and the paper started trading at lower values (this is called mark-to-market). Which meant that hedge funds trading in these illiquid securities could make just a few trades involving a hundred thousand dollars or so, and suddenly trillions of dollars would be wiped out of the value of the banks. Hedge funds gleefully took advantage of this accounting rule change, and tons of bank equity was wiped out. Once FASB changed the rule back (April, 2009) the banks (and all stocks) went straight up.

But how about this: You’re to blame too. That’s right, you. Why? Because you’re not investing in America! You’re irrationally scared. Why have there been 25 months in a row of redemptions from mutual funds? Why are P/E ratios relative to yields at their lowest levels ever? The stock market right now is irrationally low. Bond yields are at 1% (give or take) and the S&P 500 is yielding 2.3%. That wide a spread has never happened before. So please, get your money out from under the mattress, and stop un-investing in America.

And finally, people are saying the problem in the euro zone is a “repeat” of Lehman. On CNBC this week, I had to explain that Greece is a country, and that Lehman Brothers was a bank. You can’t liquidate a country, not very easily at least. The euro zone has problems but let’s put them in perspective:

In 1981-2 a huge portion of South America defaulted. Our 8 largest banks were 263% exposed to South America. What happened? A big bailout. Then the biggest stock market boom in history that lasted almost 20 years.

Today, our 8 largest banks are about 8% exposed to the PIIGS (Portugal, Italy, Ireland, Greece, Spain). They can all default and pay zero cents on the dollar. Our total exposure (in the 5 largest banks) is $54 billion. That’s not chump change, but that’s not Lehman and AIG either.

So, I’m confused, whose fault is it? And where do I go “occupy” if I want to vent my anger? The choices: FASB, Governor Cuomo’s office, the Federal Reserve, hedge funds, and mortgage lenders (who were thrilled with the new Fannie Mae lending standards so they loaned out as much as possible).

What about Germany? What about Greece? What about the White House? President Obama has so confused the healthcare system, and created such confusion around mandatory payments from corporations that everyone is now afraid to hire. Two trillion dollars in stimulus and we’ve lost millions of jobs. How can that be? Guess what: there’s also $2 trillion in cash sitting in reserves at the banks. It never hit the money supply!

There are millions of private businesses out there that aren’t hiring because banks aren’t lending. Why aren’t they lending? Because they’re afraid of political uncertainty. If a bank is going to be politically targeted it needs all the money it can get. Plus, the Federal Reserve is paying banks to hold money. Why? Because we asked for it! We wanted the banks to stop being so greedy so we decided to encourage them to hold onto more money and not lose it all. The Fed does that by paying them.

Deep breath. There’s no scapegoat here. We’re all in this together, and we’re all (somewhat) at fault. So rather than planning an occupation, let’s focus on solutions:

The Federal Reserve should stay out of it: stop paying the banks to hold our money instead of lending it out. Heck, let’s even charge the banks, and unleash that $2 trillion that never escaped Quantitative Easing.

Let’s bring back the uptick rule, and make it harder to short the market. What does this do? It makes stocks go up so companies can raise more money to hire people.

None of the stimulus from Obama or the Fed has helped the franchise business. There are about one million franchises in the U.S. employing over 10 million people. How about we give those franchises a tax break so they can hire more people. Or set up a lending program to lend directly to them so they can start more franchises and hire more people. This would definitely help unemployment.

Meanwhile, please stop being so angry. Stop “occupying” places. Let’s be friendly and focus on solutions. Let’s be creative and focus on how we can use that energy for invention, innovation, and ultimately Jobs.

Edited October 1, 2011 by TheGrunt

[Ursa Majoris]

Meanwhile, please stop being so angry. Stop “occupying” places. Let’s be friendly and focus on solutions. Let’s be creative and focus on how we can use that energy for invention, innovation, and ultimately Jobs.

 

I wonder if anyone has forwarded this to Congress?

[BeeR]

This helped create the entire subprime category. Was this a bad thing? Of course not

I stopped here.

[Pope Flick]

If I invited you to a party, and said don't bring anything just have a nice time and you got drunk, pawed some female guests, puked in the bathroom and tried to table dive in the living room, you'd get dragged out back by me and my friends and get the chit beat out of you.

 

It's the same thing.

 

 

ETA - you'd even be saying:

please stop being so angry.

But no one would care at that point. Edited October 1, 2011 by Pope Flick

[WaterMan]

Written by an author who makes a living writing for a business newspaper that is the rival of the The Wall Street Journal.

 

I would be begging them to stop the occupation as well.

[TheGrunt]

I guess you are all correct. Who cares if Wall Street isn't the real problem? Let's just cause havoc there anyway.

 

Ironically, as a Tea Partier, I see one thing in common with myself and the hippies protesting wall street: we're both tired of the corruption. The difference is that the hippies ignore the political corruption and want blame everything on businesses, or people who make more money than themselves. I see the corruption in both the politicians whose sticky fingers are getting involved with these businesses, and how they both are working together to fester this corruption. It's this very corruption that makes me tired of banks and their government bailouts and how intertwined the banks are with some politicians (Dodd, Frank). For these reasons, I just opened a USAA Credit Union bank account and on Monday will be moving all my money out of Bank of America.

 

I have to ask, though. Why do liberals ignore political corruption and focus solely on hating those who want to make money for a living?

[wiegie]

Who cares if Wall Street isn't the real problem?

Actually, investment banks (which basically are Wall Street) were a HUGH part of the real problem.

[TheGrunt]

Actually, investment banks (which basically are Wall Street) were a HUGH part of the real problem.

Of course they were. I understand that. But what I don't understand is why or how some people ignore the connection between politicians and the banks. See:

 

In 1997 Andrew Cuomo, the Secretary of Housing and Urban Development under Bill Clinton, allowed Fannie Mae to reduce the standards by which they would secure loans. This helped create the entire subprime category. Was this a bad thing? Of course not – it allowed more people to leave the ghetto, move to the suburbs, and achieve the American Dream of owning a home. Who knew that “Dream” would turn into a nightmare in a mere decade. Cuomo is not Nostradamus.

 

Before the era of Bill Clinton, and before politicians allowed Fannie Mae and Freddie Mac to reduce the standards by which they would secure loans -- which created the entire subprime category (the worst debt we face today) -- banks were not handing out loans left and right to people who could not afford the homes. So I ask, do liberals ignore this cause as an effect to the current problems we face today simply because, as the article points out, there were 'good intentions' behind creating the subprime category?

 

Good intentions or not, that shouldn't take away from the fact that these political actions in fact played a Hugh part in today's subprime mortgage mess. So why ignore it?

[wiegie]

Of course they were. I understand that. But what I don't understand is why or how some people ignore the connection between politicians and the banks. See:

 

 

 

Before the era of Bill Clinton, and before politicians allowed Fannie Mae and Freddie Mac to reduce the standards by which they would secure loans -- which created the entire subprime category (the worst debt we face today) -- banks were not handing out loans left and right to people who could not afford the homes. So I ask, do liberals ignore this cause as an effect to the current problems we face today simply because, as the article points out, there were 'good intentions' behind creating the subprime category?

 

Good intentions or not, that shouldn't take away from the fact that these political actions in fact played a Hugh part in today's subprime mortgage mess. So why ignore it?

the subprime debacle was propagated by the investment banks--if you look at what was happening in the early to mid part of the last decade, it was the investment banks that were funding subprime mortgages (because Freddie Mac and Fannie Mae wouldn't touch them). It was only later that Freddie and Fannie got into the subprime game because they were losing market share to the investment banks.

 

And let's be clear, the housing market collapse would not have sent to financial system to the brink of collapse had the investment banks not been doing all sorts of stuff that had NOTHING to do with any government regulations.

 

(For the record, I have a published research paper on this subject.)

Edited October 1, 2011 by wiegie

[TheGrunt]

the subprime debacle was propagated by the investment banks--if you look at what was happening in the early to mid part of the last decade, it was the investment banks that funding subprime mortgages (because Freddie Mac and Fannie Mae wouldn't touch them). It was only later that Freddie and Fannie got into the subprime game because they were losing market share to the investment banks.

 

And let's be clear, the housing market collapse would not have sent to financial system to the brink of collapse had the investment banks not been doing all sorts of stuff that had NOTHING to do with any government regulations.

 

(For the record, I have a published research paper on this subject.)

You still didnt answer any of my questions. You provided no links, no dates or timelines, but claim that investment banks acted first before legislation allowed Fannie and Freddie to foster an irresponsible lending environment.

 

I think you are looking the other way when it comes to politicians and putting to much blame on investment banks; granted, the investment banks are not all innocent either. So are you are partially correct. But there is more blame to go around than what you are suggesting.

[SheikYerbuti]

From what I've seen and read of them, 90% of the occupiers couldn't understand the OP in the first place. So really, what's the point?

[wiegie]

You still didnt answer any of my questions.

that's because your questions were based on false premises

 

You provided no links, no dates or timelines, but claim that investment banks acted first before legislation allowed Fannie and Freddie to foster an irresponsible lending environment.

 

I think you are looking the other way when it comes to politicians and putting to much blame on investment banks; granted, the investment banks are not all innocent either. So are you are partially correct. But there is more blame to go around than what you are suggesting.

you want a reference? Here you go: http://www.gpoaccess.gov/fcic/fcic.pdf

[Ursa Majoris]

the investment banks are not all innocent either.

Google "The Big Short"

[TheGrunt]

that's because your questions were based on false premises

 

 

you want a reference? Here you go: http://www.gpoaccess.gov/fcic/fcic.pdf

And here's another reference: http://www.lewrockwell.com/rothbard/rothbard66.html

 

Politicians and investment bankers are both pulling the same strings, and it's been happening for at least -- if not more than -- 50 years. It seems each political cycle has added more problems than the next, without solving any of the long term issues. Blaming one while ignoring the other is simply playing the role of a partisan idealist.

[Pope Flick]

This is the best.

[Ursa Majoris]

This is the best.

Always good for a laugh and spot on too.

[WaterMan]

These hippies have been seen with signs calling Obama, "The Obomber."

 

The ones protesting have stated their issues. Political corruption is one of them.

 

This is the fifth communiqué from the 99 percent. We are occupying Wall Street.

 

On September 21st, 2011, Troy Davis, an innocent man, was murdered by the state of Georgia. Troy Davis was one of the 99 percent.

 

Ending capital punishment is our one demand.

 

On September 21st, 2011, four of our members were arrested on baseless charges.

 

Ending police intimidation is our one demand.

 

On September 21st, 2011, the richest 400 Americans owned more than half of the country's population.

 

Ending wealth inequality is our one demand.

 

On September 21st, 2011, we determined that Yahoo lied about occupywallst.org being in spam filters.

 

Ending corporate censorship is our one demand.

 

On September 21st, 2011, roughly eighty percent of Americans thought the country was on the wrong track.

 

Ending the modern gilded age is our one demand.

On September 21st, 2011, roughly 15% of Americans approved of the job Congress was doing.

 

Ending political corruption is our one demand.

 

On September 21st, 2011, roughly one sixth of Americans did not have work.

 

Ending joblessness is our one demand.

 

On September 21st, 2011, roughly one sixth of America lived in poverty.

 

Ending poverty is our one demand.

 

On September 21st, 2011, roughly fifty million Americans were without health insurance.

 

Ending health-profiteering is our one demand.

 

On September 21st, 2011, America had military bases in around one hundred and thirty out of one hundred and sixty-five countries.

 

Ending American imperialism is our one demand.

 

On September 21st, 2011, America was at war with the world.

Ending war is our one demand.

[wiegie]

Always good for a laugh and spot on too.

I show this to my classes (I think Az first posted it back in April or so of 2008).

[TheGrunt]

These hippies have been seen with signs calling Obama, "The Obomber."

 

The ones protesting have stated their issues. Political corruption is one of them.

 

Ending war is our one demand.

The problem is it's mixed in with other less realistic demands, which makes the more valid arguments seem less serious.

 

Let's take a look.

 

On September 21st, 2011, Troy Davis, an innocent man, was murdered by the state of Georgia. Troy Davis was one of the 99 percent.

 

Ending capital punishment is our one demand

.

 

Beginning a protest "demand" with an argument stating a convicted guilty person is "an innocent man" makes this occupation less credible. Capitol punishment exists to deter the crimes that result in it's use. Don't you think ending Capitol punishment, while seemingly good in its intention, might have negative consequences? For instance, ending capitol punishment might result in more crime - criminal acts that might otherwise be deterred if Capitol punishment was a considered form of justice.

 

On September 21st, 2011, four of our members were arrested on baseless charges.

 

Ending police intimidation is our one demand.

I highly doubt the charges were "baseless." I don't know anyone who has been arrested for doing, very literally, nothing.

 

On September 21st, 2011, the richest 400 Americans owned more than half of the country's population.

 

Ending wealth inequality is our one demand.

This is silly. Using the word "owned" suggests "half of the country's population" is literally enslaved without choice, and that someone who made something out of nothing but gained a lot of wealth in the process is evil. Comments like this suggest extreme positions are pushing this political spectacle in the form of a protest against Wall Street.

 

I'm adding Ending poverty is our one demand to the above, because it's redundant.

 

How do you go about "ending 'wealth inequality' or poverty " anyway? Socialism? That's not gonna work. It won't happen.

 

On September 21st, 2011, we determined that Yahoo lied about occupywallst.org being in spam filters.

 

Ending corporate censorship is our one demand.

I guarantee you with 100% confidence that Yahoo board members didn't act in some conspiracy to block mass emails getting sent from occupywallst.org servers. If you have ever worked in support for Microsoft, Google, Yahoo, etc., you would know that there is a process which low tier support teams follow to determine what server are sending Spam and then block those IP addresses from doing so. These processes to block Spammers include the number of email users reporting email from spammers. If enough Spam is reported from an IP address, and it has been determined that a crap ton of email is being send from a particular server, some tier 3 Yahoo! support dude sitting in a chair at his desk probably just clicked a button to block the site after all the flags indicated him to do so, per a standard support model process.

 

That being said, ending corporate censorship would be interesting, which would include Google - a search engine that has been known to censor conservative websites. Perhaps liberals might want to rethink this one.

 

On September 21st, 2011, America had military bases in around one hundred and thirty out of one hundred and sixty-five countries.

 

Ending American imperialism is our one demand.

 

On September 21st, 2011, America was at war with the world.

 

This is straight up anti-American ranting, and spreading disinformation. Imperialist nations would not invade a country to topple a bad regime, rebuild the country into a more free democracy, and then hand back all government and military control to the people of that country.

 

Running with an argument to end something that does not exist discredits this political campaign to 'occupy wall street'.

 

America is not at war with the world. It a small group of Leftist extremists who have, in their idealist views, quote "declared war" on America.

 

The very few "demands" that are a legitimate question are discredited by its skeptical accusations, or they are backed by some very extremist anti-American philosophies.

 

The only thing I think of when this political campaign mentions "99%" is that this must be the percentage of people the protesters are shouting at.

 

God bless the United States of America.

[Ursa Majoris]

This is silly. Using the word "owned" suggests "half of the country's population" is literally enslaved without choice

You still haven't taken my advice about thinking before you post something, have you? The sentence doesn't mean the top 400 wealthy people literally own half the population as in slavery, it means they own MORE stuff / wealth / assets than half the population.

[TheGrunt]

You still haven't taken my advice about thinking before you post something, have you? The sentence doesn't mean the top 400 wealthy people literally own half the population as in slavery, it means they own MORE stuff / wealth / assets than half the population.

Um, Ok... This still doesn't change the overall point I made.

Edited October 2, 2011 by TheGrunt

[The Holy Roller]

This is the best.

 

 

 

[TheGrunt]

Relevant information regarding Occupy Wall Street.

 

Obama and the democrats are in lock-step formation with the Socialist protests

 

ACORN linked to Occupy Wall Street protest, says DC watchdog

 

Video Exposing How 'Occupy Wall Street' Was Organized From Day One By SEIU/ACORN Front - The Working Family Party, And How They All Tie To The Obama Administration, DNC, Democrat Socialists Of America, Tides And George Soros

 

Protestors Face Dilemma: Should They Buy Stuff?

 

George Soros Spends 'Big Money' to Occupy Wall Street

 

I wonder if Democrats realize how moronic it looks to publicly back or applaud this 'movement'? See Nancy Pelosi, "God Bless [Occupy Wall Street]." vs. Nancy Pelosi crying, whining and making up rumors about the Tea Party.

 

Honestly, if we were to imagine for a moment what the exact opposite of the Tea Party Movement would look like, the answer is the Occupy Wall Street crowd. (see link: Top image, above 'Sanitation Becoming Concern...')

 

Is the astroturf finished yet?

[evil_gop_liars]

Some more hard hitting agenda driven journalism I see...

[Ursa Majoris]

Relevant information regarding Occupy Wall Street.

 

Obama and the democrats are in lock-step formation with the Socialist protests

 

ACORN linked to Occupy Wall Street protest, says DC watchdog

 

Video Exposing How 'Occupy Wall Street' Was Organized From Day One By SEIU/ACORN Front - The Working Family Party, And How They All Tie To The Obama Administration, DNC, Democrat Socialists Of America, Tides And George Soros

 

Protestors Face Dilemma: Should They Buy Stuff?

 

George Soros Spends 'Big Money' to Occupy Wall Street

 

I wonder if Democrats realize how moronic it looks to publicly back or applaud this 'movement'? See Nancy Pelosi, "God Bless [Occupy Wall Street]." vs. Nancy Pelosi crying, whining and making up rumors about the Tea Party.

 

Honestly, if we were to imagine for a moment what the exact opposite of the Tea Party Movement would look like, the answer is the Occupy Wall Street crowd. (see link: Top image, above 'Sanitation Becoming Concern...')

 

Is the astroturf finished yet?

Good lord, you're the precise material the establishment needs right now. Compliant, blind and not terribly bright.