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DON'T PANIC! This blog is authored by Seniors at Aragon High School, San Mateo, CA.
Don Roll
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In Defense of Mistakes1 week ago
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April 23, 20248 hours ago
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Blog Archive
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2009
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February
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- Obama pulling troops out of Iraq in 2010
- What job would you take to survive?
- "The Simpsons" sets a world record
- Fun Fact
- Possible Republican Nominees for 2012
- Just for Max...
- Obama's State of the Union Adress
- California to legalize marijuana?
- A bit of the expected GOP pessimism towards Obama'...
- Obama's optimism towards the economy
- What an awful cartoon
- The Economics of Health
- American ist
- GOP Governors to Reject Stimulus Money
- Facebook Scare
- UC Funding Cuts
- Obama Wants To Halve Budget Deficit
- The Mortgage Crisis Explained...
- Tax the Gas, Not the Mileage
- Those Swiss
- Trade and War in Canada
- Signs That Things Are Getting Better
- Jobs That'll Come Looking for You
- Questionable Politlcal Cartoon
- Economists Agree!?!
- An Even Bleaker Future
- Fortess of Melted Brick
- Let's Stimulate!
- Oil's Cheap, but Gas Isn't
- President's Day
- The Stimulus has been signed
- New Military Program: Fast Pass to U.S. Citizenship
- Stimulus Plan Revised, Awaits Obama's Signature
- A Congressional Vote for Washington DC?
- A-Rod and Steroids
- Obama's Speech on Economic Stimulus Plan
- Who Gave Them Money?
- Pirates
- Senators Reach Agreement on $$
- US must rethink policies for reconciliation
- The Path to Energy Efficiency
- Obama Demands Immediate Action
- Mistake Saying Mistake?
- Child Health-Care Bill Signed
- Affirmative Action... WWOD (what will obama do)
- Hamas Steal UN Food aid from Gaza Warehouse
- Obama Hope Poster Causes Controversy
- The scoop on the economic stimulus package
- Hypocrisy of the Highest Order
- Economic Stimulus Debate
- Obama Interviews
- Tax Break for New Car Buyers
- Obama in Action
- Holder is Confirmed Attorney General
- Welfare Aid Not Growing as Economy Drops Off
- A State With a Wish List for Stimulus Spending
- E-mail to Obama is symbol of elite access
- Democrats Indicate Areas of Compromise on Stimulus
- Iraqis Step Forward as U.S. Pulls Back
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February
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3 comments:
Not a bad movie... notice how the federal reserve holding interest rates too low starts the crisis as tons of people wind up borrowing tons of cheap money and looking for places to invest it. This causes the temporary boom until the bills come home and people realize that their investments weren't as good as they thought, which is the bust.
So yeah, the federal reserve holding interest rates low is not a good thing for the economy.
That clip was extremely well made. Simple, yet informative.
@ballin: I feel like the credit crisis isn't falling on the heads of the federal reseve because of their low interest rates, I feel it's the banks, brokers, and investers problems because they were the greedy ones desperate for money the invested in sub-prime morgages ("like a playing hot potato with a time bomb) which in the end, just blew up in their faces.
But how did the investing frenzy start? The low interest rates
Also, in a free market, all these people that took ridiculous risk on leverage would have failed...but wait the government steps in and rewards them for their ridiculous risk taking.
Greed isn't really a bad thing, and these investors would have to take into account risk (ie losing money, the opposite of what a greedy person wants) when they make investments.
In the end, the continual slashing of interest rates causes these bad investments as they can't make any money just by saving or buying bonds so they have to find other ways to invest their money, plus the fact that they are getting super cheap loans. Then during the boom where there is tons of investment it looks like prices will go up forever and everyone thinks they have a lot more money than they do.
At the least, if the federal reserve didn't hold interest rates at 1% or lower this wouldn't have happened (at least not nearly as badly).
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