Bad lending practices rooted in greed

Mohammad Ala
by Mohammad Ala

Bad lending practices rooted in greed.

It is annoying to read the news that JPMorgan will purchase Bear Stearns for $2 a share. The stock of Bear and Stearns has fallen from the high of over 150 to low of $30 and will likely fall again to low of $2 soon.

"No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear... Don’t be Silly" Source: //

In a capitalistic system why would the government get involved in affairs of private investors? How could a company which was promoted as a symbol of stability go down so fast?

It is remarkable times we live in. Would people take their money out of financial institutions because there will be more failures in the near future? What will happen to the dollar when all the OPEC countries change this currency in favor of the Euro? The feeling is that the price of oil will double. It's important to remember that a lot of investors have been hurt by the greedy establishments. This will not be the last time.


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more from Mohammad Ala
Kaveh Nouraee

Stop Sounding Like Such a Victim

by Kaveh Nouraee on

You say "rich people" as though it's an obscene term. Rich business owners are the people who hire the rest of the people to work and support themselves and their families. They provide the jobs...the rest is up to the individual.

Gas prices are higher in the cities because of the cost of property in the cities, compared with outlying areas. But that's only in some cases. Gas prices in West L.A. or Del Mar, CA is higher than it is in other, less affluent places. The highest prices are in Maui. Hardly the ghetto.

I never said minimum wage is cyclical. A capitalist free-market economy is cyclical. Re-read what I typed.

Going back to Katrina, it was a N-A-T-U-R-A-L D-I-S-A-S-T-E-R. It is the responsibilty of then then-Governor and the Mayor of New Orleans who ignored NOAA warnings of the storm's intensity and dumped people into the Superdome against the advice of the federal government.

Enron (again): That whole debacle and the lies began in the 1990s, while Clinton was in office. (wanna blame him?) Do some research. Bush/Cheney weren't even on the radar as presidential candidates at that time.

Lebanon (dobareh): What do expect Israel to do with Hezbollah? Invite them to lunch? Hezbollah has a singular purpose. To destroy everything and everyone who don't fall in line with their ideology. They need to be cut out and removed from this world like the social malignancy they are, along with Hamas. Al-Qaeda and the IRI.

Tax cuts? I stand behind my previous statement. The rebates are a token gesture (albeit an empty one) with good intentions, nothing more. It wasn't thought out as best as it could be.

Torture/Wiretapping: You think the terrorists give a damn about the Geneva Convention? You're afflicted with utopian naivete.


Nadia that's the downside of outsourcing.

by Anonymouse on

More exploitation.  Poor people can't have any breaks anywhere.  Here in US the high gas prices affect mostly the poor and in those neighborhoods the gas prices are at the highest.  Go figure.

About minimum wage, there isn't really a cycle.  The price of goods don't start with minimum wage.  Minimum wage follows inflation which is caused by poor economic planning by the Govt.  It is a cycle none the less but it shouldn't be a reason not to raise minimum wage.

Kaveh $1 = Euro is now what about $1.45 now?  Investers (read rich people) pump up the oil prices like the dot com boom or the housing boom and then buy in euros to make more profits.  Once they make their profits they'll plunge the oil prices to take out their profits only to start it again.  High oil prices is fed up by world market demands PLUS the investors hype.  Ahmadi realized this and fueled the rhetoric because he saw the oil prices would jump at the sound of his fart and US's (read neo-cons) response.  Oil prices went down after the NIE report and he has since shut up or even when he speaks no one cares since it is the same and some have realized what their anti-ahmadi rhetoric actually does.

As far as Katrina, it was what Bush did after the Katrina.  He let people die on TV and only said something when it was evident to everyone that he does not really care and he padded the FEMA director on the back for "doing a great job".

Enron - the CEO was a big (huge) Bush contributor and Cheney met with him in person and blocked Congress' inquiry into the content of the meeting.  After that meeting Enron's CEO lied to investors and we all know what happened after that.

Lebanon - US Air Force encouraged Israel to launch a full attack in response to Hezbollah's next tit for tat with Israel.  Launch massive air strikes on Hezbollah's positions to test the "mid strength nuke bombs" and if successful it would be used in Iran.  Again the war was a test case for Iran.  Who would go to a full scale war over one soldier, not to mention he is still there and Israel didn't win the war.  Read Seymour Hersch's piece.

Tax cuts/rebates - BS for masses.

Wire tapping and torture - ok to do it while at war? says who? George Bush? What about US's own laws? not to mention the Geneva convention which he and his cronies tried legal mumbo jumbo to get out of.

They all add up.  But who is going to listen? No one apparently did and he was re-elected with 51% of the vote? now he is at 28%. It doesn't matter now.

Aslan you know what? You dorost migee.

Kaveh Nouraee


by Kaveh Nouraee on

They're not really tax incentives as much as they are dis-incentives to remain in the U.S.

They get a few tax breaks to offset the expenditures overseas, but it's the exceeedingly high price of doing business here that ultimately makes them pack up and move.

Unions are a HUGE culprit. Look at the auto industry for example. GM, Ford, and Chrysler are losing their shirts and the United Auto Workers Union control them.

Toyota and Honda however, have huge factories here making the majority of Camrys, Accords, Avalons, and Civics you see on the roads. They have told the UAW to jump in a lake. If the UAW were to get into these factories, you would see Toyota and Honda close up and move it all to India.




by Anonymouk (not verified) on



Kaveh Nouraee


by Kaveh Nouraee on

If $1.00 were equal to 1 Euro, then $103 per barrel equals 103 Euros per barrel. It won't be "like $63 a barrel." Like, duh.

Tax cuts are required to keep more money in OUR pockets. That allows more money to circulate through the market. This (or any) government can do a lot more with a lot less. A government is only supposed to maintain infrastucture and public safety. The rest is waste. The private sector can do a better job for a fraction of the cost if allowed to do so.

Now, Bush is to blame for ENRON? No, Enron pre-dates Bush.

KATRINA? Again, no. Bush cannot be blamed for the weather. The levees failed, but not because of Bush. They were old and weak (much like your argument). I feel terrible for those who lost everything, but it was a hurricane. Blame Mother Nature.

LEBANON?  Once again, no. Hezbollah and Hamas (Arabs)

WIRETAPPING & TORTURE? We are in a state of war, with an enemy that thinks nothing of blowing themselves up and taking men women and children with them. (Arabs, again.)

On the other hand, the US prosecutors, the NIE, and mission accomplished? You're on the money there.




by Nadias on

I have heard that the US government provides tax incentives for companies that outsource overseas. Is it true? Have you heard or read anything on it?

I think the US government should give companies incentives if they keep the jobs in the US. I think it would be a better way to improve the economy.

I also, think the minimum wage issue is a mess. Every time they increase the minimum wage to so call improve the life of people, businesses simply have to pass that cost to the consumers. The cost of living therefore increases for all which makes the increase in minimum wage useless. It is a vicious and useless cycle. There has to be a better way.

Solh va Doosti (paz a vosotros)


Kaveh Nouraee


by Kaveh Nouraee on

You bring up a great point. Outsourcing is the result of business finding it increasingly difficult to remain competitive and profitable because everyone has their hands in the till.

Between endless taxes, tariffs, labor unions, the backbreaking cost of paying for healthcare for workers who don't take care of themselves to begin with, outsourcing became inevitable. The U.S. used to be the land of opportunity for people from other countries, but it has become very inhospitable for businesses to thrive.

That's all due to the Democrats and their policies that stifle economic growth and stand in the way of people becoming economically and financially self-sufficient and independent. They don't want people to be financially successful, because they will lose their political base and power. That's why they want to tax wealthier people at a higher rate than others, when a flat tax would be a better solution.


Anonymouse interesting take on..

by Nadias on

outsourcing. :o) Actually, the war on terrorism is being partially outsourced too. The US has contracted with certain companies to work overseas for them.

I do realize that some people in poorer countries do benefit but you also have to be aware that a lot of US companies move part of their operation to third world countries to avoid a lot of the safety laws for disposing of certain chemicals. They do a lot of illegal dumping of toxic waste. Several years ago, there were reports of large number of birth defects on the Mexican border because toxic waste was being diposed of improperly. Many of the twin plant employees where developing illnesses because of their exposure to certain chemicals. The companies and government simply did not care for the safety of the workers.

How about the scandal with all the sweat shops in China and other countries in which US companies had outsourced their operations, I think Nike was one of them.

So, yes outsourcing can be a blessing for many people but depending on the companies operation standards it can also be a curse for the workers.


Solh va Doosti (paz a vosotros)



Kaveh we pay $4 for gas because $ is at all time low.

by Anonymouse on

$ is an all time low because of all the mess Bush has caused in the world without being able to correct them or have even a desire, or show a desire.  $104 a barrel is like $63 a barrel if $1 = 1 euro.

The economy is HIS making because of all the spending and tax cutting he has done on several occasions.  Remember for his first 4 years he had a republican congress rubber stamping all his proposals.

Only in his 5th year he had to deal with a democractic but useless Congress.  So all his policies put together brought us here.

What I meant by Clinton's scandals means the kind of problems we had then and the kind of problems we have now.

Bush's scandals include, Enron, post 911 violations like illegal wiretapping, torture (which he recently vetoed a ban), firing US prosecutors for political reasons, Katrina, Lebanon war and doing nothing about it (actually ordering it through Air Force brass), cherry picking the NIE report which blew in his face later, mission accomplished, to name a few.  More can be added but it doesn't matter if you don't consider anything a problem.

Normally you won't give a President all the blame, but in his case because he forced his policies on everything using every ILLEGAL and questionable practice available and given obvious failings of his policies, the blame goes straight to him.  Just as if they had worked the praises would have gone to him.

That should be it on the topic of Bush for me.  Criticizing him is like criticisizing mullahs, it's so easy and kind of boring after a while.  We need new scandals to make believers out of non-believers.

Kaveh Nouraee


by Kaveh Nouraee on

What did Whitewater and that nickel and dime oral sex you talk about have to do with the economy? It only proved that Bill and Hillary are both sleazeballs in business and that Bill liked blowjobs from a fat chick who worked as a government clerk.

Bush's scandals? What? That he used to snort coke? People claim that Bush is so stupid and unintelligent and so on, yet make him out to be some mad scientist when it comes to the economy, that he and he alone is the cause of the current economy. So which one is he?

I, for one, never gave him that much credit. I never gave credit to any president for the economy.

I know the minimum wage sucks. It was orgininally designed to protect non-union working people from working without any compensation in return, but also to stimulate workers into taking the initiative so that they won't make chump change for the rest of their lives. The whole concept is a failure.

Are you going to blame Bush for that? The minimum wage laws were enacted 8 years before he was born! But, it's all Bush's fault to you. That's the first time I heard of a spermatazoa being held liable for the economy 70 years later.

The media IS biased! Don't be naive. FOX and many talk radio shows are biased one way, and MSNBC, CNBC, and CNN, are biased in the opposite direction, for example. That's obvious to anyone with basic cable. Newspapers even more so, and usually to the left. But they are successful at hiding it because they package it in way to capture the viewer's/reader's/listener's attention.

Gas is $4 per gallon because of OPEC. And who are the OPEC countries? A bunch of backward nations who are strongarming the market. We pay $4 a gallon here so that the Saudis can pay 45 cents, the Nigerians pay 38 cents and the Venezuelans pay 17 cents. It was like that before Bush came along and will be like that after he's gone, unless OPEC is dismantled. Also, no new refineries have been built in the U.S. since 1976. Who do we blame for that?

The war? You have a point. I'd say the intentions were good, but the planning and the execution leave everything to be desired.

But I do say to invest in real estate because it will go up in value. History has proven it repeatedly.


Nadias I'm ok with outsourcing jobs.

by Anonymouse on

I know outsourcing jobs is not a pleasant topic and kind of touchy for many, but I look at it from the point of view of someone in a far corner of the world in a poor country with poor conditions is getting a job.  America is the richest country in the world and there are many solutions to many of the problems if someone is willing to take on people's interest instead of the big business' interests.

Outsourcing jobs can also be a remedy to illegal immigration.  You give them jobs there so they don't come here.  Sort of like Bush's policy of fighting terrorists over there so they don't come here :-)


Did anyone mention........

by Nadias on

out sourcing of jobs overseas as a cause of the loss of many jobs in the US?

I think it is also relevant to this discussion. I am sure JPMorgan will be cutting costs where they can by downsizing many jobs and out sourcing where they can. Perhaps even eliminating and combining several positions. So, JPMorgan employees and their families will also be affected.


Solh va Doosti (paz a vosotros)



Baz MasoudA...

by AnonymousChicken (not verified) on

Please address the issue. This is an important issue which is serious because 14,000 employees will lose their jobs, with more to come.


Kaveh look at Bush's scandals from the beginning.

by Anonymouse on

Clinton had whitewater and Monica.  Nickel and dime and oral sex.

Now look at Bush's scandals.  You know what they are and I'm not going to go through them.  If you think his policies is nothing and media is biased, or if you think buying real estate is good now where prices have been going down steady in the past 1.5 years, then you should post Bush's poster "Mission Accomplished" as your slogan.

This is not free market economy, or it may be, but it is definately Bushonmics.  It is all him.  People are suffering and are worried.  Minimum wage is what $6 an hour? gas is $4 a gallon.  I should stop now, don't want to get into it with someone who thinks Bush is mesiah and God's gift to mankind.  This may not be what you mean, but Bush is the reason for all this.  It is ALL him.  ALL him.  From wars to economy.


Very Much in Tune !!

by masoudA on

Our Good old Dr. Ala seems to be very much in Tune with the rest of anti-United Stetes entities !!! diverting the public attention to an "Upcoming Economic Disaster".  

My point is not at all on wether this depression is real or when it will actualy hit America.    My point is about timing.  How come all of a sudden a whole slew of Newspapers writers, TV and Radio Personalities and even internet bloggers such our own Dr. Ala here - decide to all cover ONE CERTAIN issue - virtualy hours apart ?   This is called mass opinion manipulation, and as it appears certain anti-American groups have learned enough about American Capitalism spending $millions on the private and even public mediums (via donations), to disseminate their anti-American messages. 


It is not on Bush . . .

by Anonymous01 (not verified) on

All these were done under Bush's watch. He commanded the Federal Reserve for helping the bail out. What a joke.

Kaveh Nouraee

It's not about Bush...

by Kaveh Nouraee on

It's about free market capitalism. An economy that is cyclical in nature. Supply and demand. And let's not forget, media hype.

No doubt, there has been a degree of greed involved. CEOs with obscene severance packages or golden parachutes (example: Angelo Mozilo of Countrywide). There are currently 240 lenders that I am aware of that have ceased operations entirely and dozens more that are literally operating day by day.

Subprime mortgages were and still are a fantastic tool to help people secure their future financial health. Someone may have all of their bills paid on time but because of too many credit inquiries, their credit scores aren't high enough for a conventional loan. They'll qualify for a subprime loan, and after one or two years, their scores will be at a level where they refinance into a conventional loan. Subprime mortgages are like toothpaste, or diapers or any medicine. Very effective when used properly.

Many problems arose when homeowners began looking at their houses as an ATM machine with 3 bedrooms, 2 baths, and a 2 car garage. These people didn't manage their money properly. And it's not just subprime homeowners. Many so-called "A-paper" borrowers tapped into the equity of their property until the tap ran dry. It's like a keg party. And if you have ever been to a college fraternity party with beer kegs, you know when those taps run dry, everybody starts looking at each other with a blank look on their faces, not knowing what the hell to do. That's not the lender's fault, the fault of the mortgage broker or the realtor, nor is it the fault of the government. That's consumer ignorance and stupidity, plain and simple. It's called taking responsibility for your action

The news media added several cans of gasoline to this powder keg with people like Suze Orman, Jim Cramer and all of these self-proclaimed real estate "gurus" who have absolutely have no business talking about these matters in public. They have only managed to instill fear and uncertainty in gullible people. They think they are "teaching" people how to be financially successful and honestly believe that from CNBC's headquarters they can somehow telepathically determine a solution to the mortgage related problems of someone with Podunk, South Dakota.

As the saying goes, "Those who can do, and those who can't.....teach."

What people fail to realize is that JP Morgan bought Bear for $2 a share, but will also be paying several billion more to offset the myriad liabilities that Bear has on the books. Few people know this because the liberal media wants the public to think that the current administration has a role in this. Curiously, while the members of the news media are inciting panic on Wall Street with their doomsday reports, each and every one of those empty talking heads are still raking in a nice fat paycheck every Friday. They make several million a year to do what? Read?!?!?!

This, in fact, may be a good thing. In order to recover from any affliction, one must "hit bottom". Dropping from $31 to $2 a share on a Sunday afternoon looks like hitting bottom.

If you want real advice from someone who knows what they're talking about, then buy property now. Renters are everywhere. This market will recover, sooner than you think. This has always been a market driven economy. But too many people are letting the biased media and their fear mongering do the driving.


Rebate checks should be given in Euro's

by Anonymous00 (not verified) on


Rebate checks should be given in Euro's.


Its is all Bush baby!

by Anonymouse on

All Bush.  Let's go down the list:

1. He selects Halliburton's CEO (Cheney) as his VP.

2. Cheney wheels and deals the energy situation with Enron.

3. Enron starts the downfall of a lot of things in Wall Street.

4. Many CEOs make a lot of money and then they are brought down once the downfall with one of them starts.

5. Bush says Iraq war is good for the economy.

6. Bush says price of oil will go down when we get hold of Iraq's oil.

7. Bush said Iraq's oil will pay for Iraq's reconstruction.

8. Iraq didn't pay for it's own reconstruction.  Bush is paying $19Billion a MONTH to destroy Iraq further.  Not reconstruct.  Destroy.

9. The whold world looses confidence in US because Bush as th leader of US supposedly the strongest nation and economy on earth is Ambivalent, clueless about world's situation.

10. Bush is clueless about what is going on in his own country.

11. Bush and company allow oil prices to rise because his family and Cheney's family is heavily invested in oil industry.  Wink wink.  Higher oil prices bigger returns on their "blind" trust funds.

12. In order to scam people they allow sub-prime mortgages.

13. They sign into law the credit card industry friendly new law banning bankruptcy laws without any changes in credit card companys policies and procedures.

14. They claim economy is good because housing market is strong (risky loans mind you).

15. Economy is near total collapse and he calls it "interesting".

16. Add more bullets yourselves, you get the picture.

We are in a big mess and he is not the one to take us out of it.  This economy is 100% his.  He lead the (wrong) way for 8 years and brough us here.  It high time he and his goons step up and claim responsibility.  They made their (huge) profits.  Now admit how you got it.


US Savings and Loans Crisis

by Nadias on

in the 1980's and 1990's is what this blog reminds me of.



Solh va Doosti (paz a vosotros)



Interesting subject.

by AnonymousMe (not verified) on

How about government's stimulus program? Too late or too little?