patrick.net

mell says

2008 was not a big hole

http://research.stlouisfed.org/fred2/graph/?g=soR

shows the consumer economy had lost its ~$100B/mo influx of feel-good juice it had been enjoying 2002-2007, and especially 2005-2007.

mell says

If we had seized the opportunity of 2008, you could buy/rent a place in SF for 50% of today's price, and that's a conservative estimate

the last time prices fell 50% it was the 1930s.

http://research.stlouisfed.org/fred2/series/CUUR0000SEHA

Yes, I get that's what the Miseans want to see, widespread economic destruction so them and their gold can come in and and sweep up the remains.

In places like SF, the only way rents can fall 50% (in 5 years) is if wages fall 50%. You've exposed your own hidden game with that assertion, the destruction of wage-earners at the expense of capital.

The only non-armageddonish way to get rents down 50% in SF is to build the place out like Hong Kong. I'm all for that, but SF people are also pretty big on last-one-in-ism and NIMBY, which is understandable of course, nobody wants a big building going up next to them, even if (*especially* if!) they are living in a big building that did the same insult to others.

Like I said, if Obama had attacked Wall Street, Wall Street would have defended itself politically, very capably, since they can afford the best bullshit artists in the business, and they've already taken over the GOP (+ DLC).

The Progressive Caucus of Congress is a pretty small power base to try to run the country from. That things are fucked isn't Obama's fault, it's our own.

Nobody even knows what the problems are any more.

Here's something I wrote somewhere else:

http://www.washingtonpost.com/world/national-security/study-iraq-afghan-war-costs-to-top-4-trillion/2013/03/28/b82a5dce-97ed-11e2-814b-063623d80a60_story.html

Part of the BS going on now is the psychosocial dislocation we’re suffering from having screwed up everything in the 2000s.

When I came back to the US in 2000, everything was seemingly awesome. The budget deficit was gone, the 1990s wars in the Gulf, Somalia, and Yugoslavia were over.

The stock market had almost quadrupled under Clinton, everyone was feeling really good.

Pump prices were at rock-bottom, cheapest (in real terms) ever:

http://research.stlouisfed.org/fred2/graph/?g=soH

But there was a cancer underneath it all.

The booming trade with China was stunting job growth in manufacturing:

http://research.stlouisfed.org/fred2/series/MANEMP

The growing financialization was creating an immense pool of leveraged risk:

http://research.stlouisfed.org/fred2/graph/?g=soI

and our trade deficit was spinning out of control by 2000:

http://research.stlouisfed.org/fred2/series/NETEXP

Then suicide bombers blew a hole in the USS Cole, Bush was selected by the conservative majority on the SCOTUS, tax cuts were announced, wars were started, interest rates were dropped, and everything went to shit.

But nobody really understands how bad things are, and what mistakes were actually made (and by whom). The 2012 cycle debates didn’t get into this at all.

We’re just a bunch of babes in the woods, on our way to getting creamed by a system that is really going to screw us if we let it.

And we will, because the system can fool some of the people all of the time, and that’s all it needs.

Bellingham Bill, your memory is quite short, and so you conclusions are quite faulty. You seem to forget how angry Americans were about the bank bailouts. Like no time before, Americans lit up the phones of their representatives screaming at them to vote against the bailouts. An anti-bailout candidate would have easily been elected then, in spite of bankster campaign spending to defeat the candidate.

Bellingham Bill says

Then suicide bombers blew a hole in the USS Cole, Bush was selected by the conservative majority on the SCOTUS, tax cuts were announced, wars were started, interest rates were dropped, and everything went to shit.

I agree that Bush was a complete disaster, but let's take the selfish view for a second:

Under Bush we were piling up debt, fighting unnecessary wars, and my taxes were cut.

Under Obama we are piling up debt, fighting unnecessary wars, and the tax cuts were reversed, my taxes increased and my health care premiums skyrocketed. I consider myself (upper) middle class, I had a stable job (among other job offers) throughout the whole financial crisis, companies, houses and rents returned to their fair valuation and interest rates were rising, which was good for my hard earned and saved money.

So to recap, since Obama took office, my tax and other financial burdens increased dramatically, rents increased, house prices increased, health care premiums increased, child care/education increased.

Ok, I made good gains in the stock market, so I am partaking in this "recovery". But not everybody has the means or knowledge to flip stocks or shacks, and it will always be a risky game, and the more conservative savers will continue to get shafted by ZIRP. So how did the middle-class exactly benefit under Obama?

mell says

the FIRE sector wealth disparity would self-regulate as it did in 2008

more like 1930-32, since the entire system of this country was reliant on financial shenanigans 2005-2007. Remove the BS, and you remove the economy entirely.

What we'd end up with is a LOT of wealth destruction, of the rioting, crime, and starving kind.

but congress could have easily said no and pretty much all democrats gave their silent endorsement

bullshit. The Dems in the House voted against it as a caucus. ALL BUT ONE Republican voted for the war.

But Dem vs. Republican is always a smokescreen -- the true problem in this country is progressive vs. conservative, and the mistakes being made by conservatives, some Democrat but mostly Republican.

Gramm (R) Leach (R) Bliley (R) is a case in point. This was a conservative fuck-up, not a Republican one, since plenty of conservative Dems signed on to that, too.

, so I cannot see how this administration is much different with regards to warmongering.

To "monger" something is to stir up and spread it. Obama has started no new wars thus far. He's commander in chief, but not King and has to lead our military in cooperation with the Congress, which is also very responsible for the military strategy we follow as a nation.

Way to lie about numbers, too, mell.

US deaths in 2013 were less than they were in 2007 & 2008. That we suffered more KIA 2009-2012 than 2001-2004 wasn't due to Obama's 'warmongering', but rather our increasingly shitty strategic position in the country, thanks to the neocon fuckups prior.

Another measure of 'warmongering' would be growth of DOD spending.

http://research.stlouisfed.org/fred2/graph/?g=spn

In Bush's 8 years, that shows the neocons managed to double spending (Mission Accomplished!).

And it also shows that Obama has presided over a slight decline in DOD spending since taking over.

Some warmonger.

Anyone with an IQ under 93 can see right through Chomsky's pseudo intellect.

indigenous says

It does not show the change in demands in the market place, bubbles being created by the FED, crony capitalism, changes in technology, the bond market, the stock market, the derivatives market, international trade, mercantilism, devaluing of currency, interest rates, inflation, deflation, politics, marketing, it has a time frame the economy does not, the increasing demands caused by government regulations, budgets, corruption, the influences on the people by the nanny state, war, etc , etc

Let alone black swans..

jazz music says

Is your lame assed retort essentially a "right by association" or lunatic fringe cheap shot? No offense, just saying ...

Neither. I just have a lot of respect for Chomsky, but also know that because he is "left wing" his insights which I find hard to deny, will neither be comprehended nor considered by some of the right wingers around here (especially the least intelligent or least secure in their intelligence).

But even from the composition of my comment, you should be able to see I was mostly just trying to be silly.

indigenous says

From this

http://mises.org/daily/2694

Fact is, TR's first address to Congress in December 1901 contained a strong anti-trust message. Standard saw the writing on the wall and worked diligently to reverse predatory business practices in an attempt to avoid breakup.

TR's address happened at the peak of Standard's market domination, over 90%. The decline after TR taking office is startling and had nothing to do with outside forces - Standard had too much market power and WOULD have smashed them without fear of breakup for doing so.

" TR's address happened at the peak of Standard's market
domination, over 90%. The decline after TR taking office is
startling and had nothing to do with outside forces - Standard
had too much market power and WOULD have smashed them
without fear of breakup for doing so."

That is conjecture, it is not an argument.

indigenous says

Wow, you think it's conjecture t

Wow you think it is not.

This was just part of the business cycle nothing else.

spydah_hh says

We believe in market failure because of miss-allocation of capital being placed or spent on the wrong things which in turn leads to market failure.

Yes, I can tell by the way Austrians always attribute market failure to government causes...

corntrollio says

spydah_hh says

We believe in market failure because of miss-allocation of capital being placed or spent on the wrong things which in turn leads to market failure.

Yes, I can tell by the way Austrians always attribute market failure to government causes...

Most of the time government is the cause of the miss-allocation of capital.

bob2356 says

Predatory pricing would be taking a loss to drive out competition then raising
the prices higher once you had a monopoly position.

This is 100% false. Predatory pricing is independent of the dominant firms profit margins.

Predatory pricing would be a dominant firm flooding the market with supply driving the market price under the average total cost of competition.

As far as I am aware, prices are set by the market, not arbitrarily by suppliers of the market. A firm can only control half the equation...

In a extremely thin margin market, it could mean lowering prices below cost of the dominant firm, but it is not a requirement.

That is, they produce at a level where MC>MR, but not neccesarily where ATC>ATR.

Take a look at MC, MR, ATC, AVC curves to understand.

S&P 500 up 230% since January 20, 2009.

Thanks, Obama!

Or, if you Austrians prefer: S&P/Gold

.94 to 1.40, a 49% increase.

control point says

S&P 500 up 230% since January 20, 2009.

Thanks, Obama!

Ka-ching! It is incumbent upon those getting wealthy to keep a growing reservoir of the poor and declining middle class so that inflation is kept under control. I mean if everyone is getting wealthy, than no one is really getting wealthy.

Interesting read, not that you need to agree nor disagree, just another opinion.

http://itstimetowakeupusa.blogspot.com/2013/04/how-obama-has-ruined-economy-in-5-easy.html

Personally, I blame Bush.

ChapulinColorado says

Personally, I blame Bush.

It is all both Bush's fault. Even well into the 5th year of the Obama recovery.

The parallels between O and FDR are similar with similar results.

Actually though monetarist or keynesian they are 2 sides of the same coin and the beltway co-opts very equally. And that is why this country is coming to a close.

It would help if we had part time legislators.

indigenous says

The parallels between O and FDR are similar with similar results.

Please elaborate. To what similarities do you refer?

(1) Prevent or delay liquidation. Lend money to shaky
businesses, call on banks to lend further, etc.

(2) Inflate further. Further inflation blocks the necessary fall
in prices, thus delaying adjustment and prolonging
depression. Further credit expansion creates more
malinvestments, which, in their turn, will have
money to be liquidated in some later depression. A
government “easy money” policy prevents the
market’s return to the necessary higher interest
rates.

(3) Keep wage rates up. Artificial maintenance of wage rates
in a depression insures permanent mass
unemployment. Furthermore, in a deflation, when
prices are falling, keeping the same rate of money wages means that real wage rates have been
pushed higher. In the face of falling business
demand, this greatly aggravates the unemployment
problem.

(4) Keep prices up. Keeping prices above their free-market
levels will create unsalable surpluses, and prevent
a return to prosperity.

(5) Stimulate consumption and discourage saving. We have
seen that more saving and less consumption would
speed recovery; more consumption and less saving
aggravate the shortage of saved-capital even
further. Government can encourage consumption
by “food stamp plans” and relief payments. It can
discourage savings and investments by higher
taxes, particularly on the wealthy and on
corporations and estates. As a matter of fact, any
increase of taxes-and-government spending will
discourage saving and investment and stimulate
consumption, since government spending is all
consumption. Some of the private funds would
have been saved and invested; all of the
government funds are consumed. Any increase in
the relative size of government in the economy,
therefore, shifts the societal
consumption/investment ration in favor of
consumption, and prolongs the depression.

(6) Subsidize unemployment. Any subsidization of
unemployment (via unemployment “insurance,”
relief, etc.) will prolong unemployment
indefinitely, and delay the shift of workers to the
fields where jobs are available.

from:

http://mises.org/daily/3907

\

First you feign interest and then feign the Socratic method and finally ignore the realities that I indicate.

control point says

S&P 500 up 230% since January 20, 2009.

Thanks, Obama!

Or, if you Austrians prefer: S&P/Gold

.94 to 1.40, a 49% increase.

rofl. Yeah, meanwhile, all 401k managers piled their customers into bonds earning 2% this entire time. All those profits went straight into wall st. pockets.

indigenous says

First you feign interest and then feign the Socratic method and finally ignore the realities that I indicate.

No, on the contrary. I was hoping for a bit more specifics. Most of that is Austrian BS and the usual revisionist history.

I think this is my favorite:

indigenous says

We have

seen that more saving and less consumption would

speed recovery;

We have??? Who's "we"? And when have "we" EVER seen that?

But the majority of the other points are just as incorrect, if not quite as humorous.

theoakman says

rofl. Yeah, meanwhile, all 401k managers piled their customers into bonds earning 2% this entire time. All those profits went straight into wall st. pockets.

Huh? I've never worked at a company that didn't allow the employees to choose their investments of their own money. Even the match would be in the employees' hands unless it was in company stock.

Where does a 401K manager dictate that your money must go into bonds???

tatupu70 says

We have??? Who's "we"?

Not you

tatupu70 says

And when have "we" EVER seen that?

It pertains to people who can observe, which is not you.

Your MO is quite predictable and stupid

indigenous says

It pertains to people who can observe, which is not you.

Your MO is quite predictable and stupid

OK--please enlighten me. When have YOU ever seen that? I'm assuming you are including yourself in those people that can observe...

tatupu70 says

OK--please enlighten me.

The funny thing about education it is generally agreed that the teacher is responsible for teaching when in fact it is the opposite.

The reality is that ignorance is a self created sequestration created by an unwillingness to LOOK.

Enlighten yourself or don't...

indigenous says

Enlighten yourself or don't...

OK--I have enlightened myself. I would encourage you to do the same.

(And fyi--enlightenment is not found at Mises.org)

tatupu70 says

OK--I have enlightened myself.

Yes, the continuing delusion and sequestration.

tatupu70 says

(And fyi--enlightenment is not found at Mises.org)

How would you know?

tatupu70 says

Like you I don't understand how you fail to acknowledge the true reasons.

So what are the true reasons why things have gotten worst? Let's hear you explanation.

spydah_hh says

So what are the true reasons why things have gotten worst? Let's hear you explanation.

http://research.stlouisfed.org/fred2/series/GINIALLRH

rising income inequality, we have a parasite class now attached to the paycheck economy

http://research.stlouisfed.org/fred2/series/CP

corporations taking more out of paycheck economy.

http://research.stlouisfed.org/fred2/series/NETEXP

trade deficit pulling hundreds of billions out of the paycheck economy

so since the mid-1990s we've had to borrow money to maintain our standard of living:

http://research.stlouisfed.org/fred2/graph/?g=sDG

annual consumer borrowing / wages

but when that blew up in 2007-2008 we switched to Japan-style ZIRP and QE, just like they did after they blew up their domestic economy in a colossal stock and bad-debt bubble, the original "Bubble Economy".

The main friction I see is simply rising housing prices. This is the two-income trap that got rolling in the 1970s, when the nation's new two-income boomer households started bidding up the cost of housing.

(Gov't required banks to start considering the woman's income in 1974's http://en.wikipedia.org/wiki/Equal_Credit_Opportunity_Act)

but rents have risen just as much as housing so it's not gummint per se that's the problem.

The main problem is simply all the money bleeding out of the paycheck economy, to Exxon, Dubai, China, landlords, Wall Street, Comcast, Walmart, Apple, etc etc.

This is an asymmetric flow, that the System replaces first with consumer debt and now gov't borrowing and Fed printing.

http://research.stlouisfed.org/fred2/graph/?g=sDa

blue is wages
red is consumer debt
green is federal debt

If we stopped the borrowing we'd have to stop the gov't spending (massive crash) or raise taxes (instant prolonged recession if tax incidence fell on the lower 90%) and the rich of this country have constructed sufficient institutional defenses as "job creators" to prevent any more taxes hitting them for the foreseeable future.

So this is why we're fucked.

Bellingham Bill says

rising income inequality, we have a parasite class now attached to the paycheck economy

Generalization... How about you give me the reason for the rising income inequality.

Bellingham Bill says

corporations taking more out of paycheck economy.

And how are they doing this?

Bellingham Bill says

trade deficit pulling hundreds of billions out of the paycheck economy

so since the mid-1990s we've had to borrow money to maintain our standard of living:

Now why do we have to borrow? I know why, do you? Give me your explanation please.

Bellingham Bill says

The main friction I see is simply rising housing prices. This is the two-income trap that got rolling in the 1970s, when the nation's new two-income boomer households started bidding up the cost of housing.

You give a explanation but it's incorrect. Housing prices are increasing due to the increasing money supply going into the housing and even the stock market and who is responsible for the increase of the money supply? The government.

Bellingham Bill says

If we stopped the borrowing we'd have to stop the gov't spending (massive crash) or raise taxes (instant prolonged recession if tax incidence fell on the lower 90%) and the rich of this country have constructed sufficient institutional defenses as "job creators" to prevent any more taxes hitting them for the foreseeable future.

Funny you can see that we have a problem with government spending and borrow but yet you support it and then blame the problem on the rich. The rich don't create jobs, it's the demand in the market. I'll agree that most of the rich is getting richer due to our monetary policies of the ever increasing no ending of the money supply. But hey all that money has to go some where and historically and even lately it's been going go into stocks and/or housing. But once again all those problems stem from the government because the rich certainly don't have access to increase the money supply now do they?

spydah_hh says

I'll agree that most of the rich is getting richer due to our monetary policies of increasing money supply and having that money go into stocks and housing or just assets that the avg. person is incapable of purchasing. But once again all those problems stem from the government because the rich certainly don't have access to the money supply now do they?

Bill will answer your questions better than I most likely, but I do want to address this paragraph. I see this a lot from the Austrian crowd. You guys seem to think that when money supply is increased, the government just hands out dollars to the "cronies" or the rich folks. Could you explain to me what you believe that mechanism is and how it works exactly?

The rich get richer because our current system rewards capital much more than labor. Increasing or decreasing money supply is really not important until you fix that issue.

tatupu70 says

Bill will answer your questions better than I most likely, but I do want to address this paragraph. I see this a lot from the Austrian crowd. You guys seem to think that when money supply is increased, the government just hands out dollars to the "cronies" or the rich folks. Could you explain to me what you believe that mechanism is and how it works exactly?

I'll answer your questions in two seperate posts.

The money is printed by the FED or at least they buy assets from the Banks or other private institutions (Hedge Funds and other funds), this is what they call QE. That money is now in the banks or privatize institutions hands. The Banks keep some of it in reserves but then they still lend most of it out or they use it to make purchases, like stock purchases (TBTF comes into play here).

If you notice the stock market a lot of companies are worth billions not by their performance but because of their stock valuation. Take a look at Twitter it's worth about $30 billion but it has never made $1 in profits it even has negative P/E. But hey Wall Street (Banks, Hedge Funds and etc) believe that Twitter will one day make money, so why not buy some stock? They have extra money to spend anyway thanks to QE. Thanks, to QE the stock market is simply overvalued. I think last month BofA beat expectations of their earning but only because they cooked the books and used the money that they had sitting in reserves (once again thanks to QE) and named them as revenues, so in reality they actually had a net lost.

So really most of these companies are (rich) because of QE, not because they're performing so well, because the truth is they're not. Many are just sitting on cash reserves and accounting them as revenue when they perform below expectations. But many like Tesla, Twitter, or even Amazon, don't even make profits or if they do it's because of a government subsidy that allows them to make money outside of their business model. However, the case with Amazon is, its making money from it's business model but their P/E Ratio doesn't match with the earnings they make.

tatupu70 says

he rich get richer because our current system rewards capital much more than labor. Increasing or decreasing money supply is really not important until you fix that issue.

The rich are getting richer because of QE as I stated in the above post. The truth is labor is rewarded, the problem with labor is that its expensive for the business and for the workers.

Workers are paid fairly well but the problem is 1/2 of our income when you account for taxes, both income tax, labor tax, social security tax, sales taxes and even other hidden taxes, we pay about 1/2 of our income to government. So we feel broke. Add QE into the mix we are also battling inflation. Inflation isn't an obvious issue because increased productivity can hide true inflation.

Labor is expensive for businesses for many of the same reasons, taxes, but also minimum wage. Many businesses tend to outsource labor costs or automate it or just eliminate it altogether.

Labor is most expensive (besides taxes) by minimum wage, because minimum wage drives out unskilled workers out of the market (normally young people). Why would a company hire an unskilled worker when he's forced to pay them the same price as a skilled worker? The company would just hire the skill worker instead.

But this creates a new problem. The younger generation are unable to find work for a decent pay. Many are going through college and coming out worst than before because of their debt and they're still considered unskilled because they have no experience.

You think Labor is not rewarded. The truth is it is rewarded, but the government just makes it too damn expensive to hire more labor and for the laborer to benefit and enjoy from their labor.

spydah_hh says

The money is printed by the FED or at least they buy assets from the Banks or other private institutions (Hedge Funds and other funds), this is what they call QE

That is mostly correct--they are typically buying government bonds.

spydah_hh says

If you notice the stock market a lot of companies are worth billions not by their performance but because of their stock valuation

No, it's mostly because corporate profits are at record levels. Valuation is slightly high (S&P 500 P/E is 19.65), but nothing outrageous. Like Bill said, corporations are taking a lot of money...

spydah_hh says

So really most of these companies are (rich) because of QE, not because they're performing so well, because the truth is they're not.

Again--that's just wrong. Using Twitter as an example of corporate America is misleading at best, and disingenuous at worst.

spydah_hh says

Many are just sitting on cash reserves and accounting them as revenue when they perform below expectations

No, they're not. That is not allowed.

So, you never really answered my question. How do "cronies" or rich folks get money first because of QE? The Federal Reserve buying a bond doesn't give any new money. Anyone could sell their bonds. All it's done is change an investment from bond to cash.

tatupu70 says

No, they're not. That is not allowed.

Right.. and what Bernie Madoff did wasn't allowed either but SEC certainly allowed it now did they?

spydah_hh says

you fix that issue.

The rich are getting richer because of QE as I stated in the above post.

You explained nothing. You stated something but gave no explanation.

spydah_hh says

Workers are paid fairly well but the problem is 1/2 of our income when you account for taxes, both income tax, labor tax, social security tax, sales taxes and even other hidden taxes, we pay about 1/2 of our income to government. So we feel broke. Add QE into the mix we are also battling inflation. Inflation isn't an obvious issue because increased productivity can hide true inflation.

spydah_hh says

Workers are paid fairly well but the problem is 1/2 of our income when you account for taxes, both income tax, labor tax, social security tax, sales taxes and even other hidden taxes, we pay about 1/2 of our income to government. So we feel broke. Add QE into the mix we are also battling inflation. Inflation isn't an obvious issue because increased productivity can hide true inflation.

OK--I have to disagree strongly with that one.

spydah_hh says

You think Labor is not rewarded. The truth is, it is rewarded, but the government just makes it too damn expensive to hire more labor and for the laborer to benefit and enjoy from their labor.

Yes, I think labor is not rewarded when compared to capital. Taxes are not high historically. Look at company profits. That should tell you everything you need to know.

spydah_hh says

Right.. and what Bernie Madoff did wasn't allowed either but SEC certainly allowed it now did they?

So, you're comparing corporate America to Bernie Madoff?

And are you implying that the SEC knew what Madoff was doing?

spydah_hh says

How about you give me the reason for the rising income inequality.

I did later below:

The main problem is simply all the money bleeding out of the paycheck economy, to Exxon, Dubai, China, landlords, Wall Street, Comcast, Walmart, Apple, etc etc.

This is an asymmetric flow, that the System replaces first with consumer debt and now gov't borrowing and Fed printing.

The core issue is simply:

INTEREST NEVER SLEEPS

Wage earners have lost all leverage once the unions were busted and China & India -- plus a dozen other low standard of living economies like Mexico, Philippines, Vietnam, Bangladesh -- became accessible to capitalist enterprise.

And how are [corporations] doing this?

paying less and less in wages of the value of what their employees are producing, obviously.

Now why do we have to borrow? I know why, do you? Give me your explanation please.

Consumers borrow because most people are grasshoppers not ants. If you wave $10,000 in front of them at 18% pa or $100,000 at 8%, they will take it.

http://research.stlouisfed.org/fred2/graph/?g=sDZ

real (2009 dollars) per-capita consumer credit expansion

as more money collects at the top, it looks for yields, and consumer credit is an excellent avenue for yields.

during the height of the late bubble Wall Street couldn't make enough CDOs to meet the demand for them. That's how villages in Norway lost millions of dollars in the US housing market, the rise of Big Finance, which only started rolling in the 1980s.

When I started college in the mid-80s, credit cards were scarce. 10 years later, common.

Consumer borrow for housing because historically, paying the bank a fixed (and declining interest payment each month) has beat having to pay the landlord an ever-rising rent payment.

Consumers borrow for cars since paying the finance co $50 or $100 mo in interest beats taking the bus or walking to work.

Housing prices are increasing due to the increasing money supply going into the housing

Government was NOT responsible for the late housing bubble. That was mostly private money, since the GSEs were actually in limbo and restricted from growing their portfolios as prices rose.

The home price rise of 2002-2006 was ENTIRELY engineered by the BUSH TAX CUTS, and dramatic rise of suicide lending -- qualifying borrowers on the introductory teaser rate, allowing borrowers to outright lie on their loan applications, allowing widespread appraiser fraud and broker fraud, and allowing the ratings agencies to rate total shit B-piece tranches AAA investments.

GSEs were complicit in some of this, but fractional reserve lending is orthogonal to government funding and loan guarantees. This is why the 19th century was full of credit panics even though we didn't have a central bank.

But once again all those problems stem from the government because the rich certainly don't have access to increase the money supply now do they?

The boost in the money supply since 2008 has been an attempt to stabilize an over-extended system, once that got seriously out of balance 1995-2005.

I suspect the boost in money supply 1995-2000 was engineered to ease China and its colossal productivity into the dollar bloc. The world needed more dollars in the 1990s, and the Greenspan Fed supplied them.

http://research.stlouisfed.org/fred2/series/MZM

"I don't have any solution, but I certainly admire the problem"

tatupu70 says

Look at company profits. That should tell you everything you need to know.

http://research.stlouisfed.org/fred2/series/CP