Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Wells Fargo CEO Invokes Specter Of Great Depression

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU
 
Liberal_in_LA Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 12:26 AM
Original message
Wells Fargo CEO Invokes Specter Of Great Depression
http://www.consumeraffairs.com/news04/2007/11/wf_ceo.ht...

Wells Fargo CEO Invokes Specter Of Great Depression
Many more foreclosures lie ahead as higher interest rates kick in

By Mark Huffman
ConsumerAffairs.Com

November 16, 2007

Add the voice of Well Fargo CEO John Stumpf to those who are warning the mortgage crisis will get worse before it gets better. Stumpf says he believes the U.S. housing collapse, brought on by massive defaults of subprime mortgages, is the worst since the Great Depression.

Though Wells Fargo has so far managed to avoid most of the turmoil that has gripped other lenders, Stumpf says hes concerned that the frightening downward spiral in housing has not played itself out.

"We have not seen a nationwide decline in housing like this since the Great Depression," the banker told a Merrill Lynch banking conference in New York.


Printer Friendly | Permalink |  | Top
kurth Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 12:45 AM
Response to Original message
1. i.e. You MUST bail us out because we let people who had no business buying a home borrow our money
Printer Friendly | Permalink |  | Top
 
madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 12:51 AM
Response to Original message
2. i`m guessing at least a third or more of the foreclosures
around here are wells fargo bank`s. he`s crying because they can`t raise phony money anymore
Printer Friendly | Permalink |  | Top
 
nightrider767 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 12:53 AM
Response to Original message
3. He's Telling the truth
It's not only the banks that are at risk, it's our entire monetary system.

Read up on how money is made in this country and it's real value.

It will shock you.
Printer Friendly | Permalink |  | Top
 
truedelphi Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 02:01 AM
Response to Reply #3
5. Could you offer us a bit more of the details?
They sound ofinterest, at least to me.
Printer Friendly | Permalink |  | Top
 
nightrider767 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 03:12 AM
Response to Reply #5
6. Well since you ask,,
Edited on Sat Nov-17-07 03:17 AM by nightrider767
I'll just say it's something I've been looking into. I could never figure out why our economy kept chugging along so well, even after we sent all those manufacturing jobs overseas. We have a horrible trade deficit, we mostly only produce services for each other.

So why are economic numbers so good?

I'll take a stab at it, but do your own homework, don't go on my word.

After 9-11,,, who knows, maybe before,,, the Fed "injected" tons of money into our economy to keep things moving. I don't know how they do it exactly, but it's creating new money. This new money goes to banks to be lent it to anyone and everyone for houses. They didn't care if you could pay the loan back, because they would sell the loan. Someone else's problem.

This money had a huge affect on prosperity. People bought new homes who never dreamt it possible. More money created more buyers, and more buyers created higher home prices. And higher home prices created wealth. People could take this new money out of their houses and spend it on upgrades, cars, boats, colleges, whatever the need was. Even if you decided not to touch your equity, since you now had your retirement "covered", via the appreciation on your house, you wouldn't need to save as much and could spend more of your take home pay.

Realtors loved this set up. Builders loved this set up. Granite tile sellers loved this set up. And why not? Everyone was making money and it seemed we didn't need an economy that produced good jobs, because smart people knew how to make money in real estate. They even had actual shows on tv about flipping houses.

But an economy not built on solid ground can falter. This turned out to be a pyramiding scheme. Lot's to say about those, but one thing that it does need is continuing growth. When growth slows, in this case the real estate market, the whole system becomes unstable and wants to fall over.

The hole in our armor this time was greedy mortgage lenders,,,, remember the guys who gave mortgage's to anyone? Yepper, they didn't care, because they sold the loan later. So they sold off lots of this stuff to buyers all over the world. These foreign interests figured that with the American economy as strong as it was, it was a rock solid investment.

Nothing could be further from the truth. It was a ponzi scheme and they got hit hard.

I don't know what long term affect that will have on our international monetary relationships, but I guess it won't be good.

So now things are going in reverse. There is less money available to buy homes, so buyers buy less. Real estate value falls. Realtors, builders, home supply companies all getting hit.

This is the part I'm trying to get a handle on. I think many of the "troubled" banks are actually bankrupt. I think that it's not the money they lost that is so important to them. I think since the system has slowed down, the entire American banking system, as well as the Dollar are at risk of collapsing. No oil in the motor and it seizes.

This will have a dramatic affect on the dollar.

What happens when a society only "uses' and doesn't produce?

My guess is you're going to see foreign money come in a big way and start buying up land....

They want something real for the phony money we've been selling. They need to dump dollars as quickly and quietly as possible. Real estate is a good way to do that.

Just my very disorganized, scattered thoughts. Still a work in progress. I'm open to ideas.

Here's a link. There's plenty of other info available..

http://video.google.com/videoplay?docid=830002752824828...



Printer Friendly | Permalink |  | Top
 
truedelphi Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 01:44 PM
Response to Reply #6
8. Back in the day, Jimmy Carter had a buddy
Edited on Sat Nov-17-07 01:46 PM by truedelphi
Vance, Lance?? Anyway the man was under investigation. I forget his name, but my boss would listen to the radio and pay attention to the hearings.

According to those hearings, banks could lend up to 95% of their monies out to THEMSELVES!!

And since there isn't much oversight, I imagine the remaining 5% could be lent out to the Bank President's brother-in-law or some such other confederate.

And of course over the years, 5% has become a down payment - so you cansee that the bankers can have lots of property - probably not in the guise of individual homes, but things like shopping malls etc. They might create a "shell" company with a different name for each enterprise.

For a while, the real estate economy was working. And don't forget, there was a real element to it as well as the Ponzi scheme element.

If I buy a house to flip but the bathroom needs upgrading and you are good at laying tile, well, you have yourself a job. One that may pay well to boot.

Of course, once the Ponzi scheme goes awry, you may be out of work. And as a house flipper, I am suddenly stuck with a house that I may not be able to sell, and that will now need to be paid for with the equity on my other homes. (Can I point out that this is the "hypothetical" I. And not the real me.)

I live in an area where even today, San Francisco Bay area millionaires are building second and third resort location homes.

So a lot of the better construction people still have jobs.

But in the last month, the friendly neighborhood grocery posted a sign: "No loans. Cash, checks or ATM only. Absolutely NO loans."

There was something ominous about it. That and the fact that the "Sticker " price on the tract homes near my house have steadily deflating prices on the handout sheets for the Buyer.



Printer Friendly | Permalink |  | Top
 
Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 01:11 AM
Response to Original message
4. Those sub-prime loans should never have been given in the first place.
Edited on Sat Nov-17-07 01:11 AM by Selatius
They only gave them out to generate short-term revenue, but they weren't looking ahead to a time when higher rates kick in and the people who had no business taking those loans find they had to default when their monthly payment increased beyond what they could support.

They were preying on the poor and the ignorant for money.
Printer Friendly | Permalink |  | Top
 
nightrider767 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 03:18 AM
Response to Reply #4
7. They Preyed on all of us
and the chickens are gonna come home to roost.
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Wed Apr 16th 2014, 09:35 PM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC