I heard from someone that this might affect SSI. I hope it doesn't affect it too much, because rent goes up every year and then lots of disabled people will end up living on the street.
--- On Tue, 10/7/08, ken barber <[log in to unmask]> wrote:
> From: ken barber <[log in to unmask]>
> Subject: Re: How statistics were used to kill the banking system
> To: [log in to unmask]
> Date: Tuesday, October 7, 2008, 12:46 PM
> i hope they know something that i do not klnow, becouse if
> they don't then the country is in for a long hard time.
> whoever wins the election is not going to matter except that
> the "winner" will have the blame. if obama wins
> and we are hit with a depression, the for decades to come
> then he and the dems will be associated with depression and
> if McCain wins it goes the other way.
>
> i just hope that taxes are not raised ala herbert hoover.
> it will make it worse faster.
>
>
> --- On Tue, 10/7/08, KE Cleveland
> <[log in to unmask]> wrote:
>
> > From: KE Cleveland <[log in to unmask]>
> > Subject: How statistics were used to kill the banking
> system
> > To: [log in to unmask]
> > Date: Tuesday, October 7, 2008, 2:59 PM
> > Hey all, I'm back home, safe--and eating
> home-cooked
> > meals again. Yum!
> >
> > I've been following the political winds on C-PALSY
> and
> > watching the news
> > catch-as-catch-can. Ken, I agree with you that much
> of the
> > mess we find
> > ourselves in has much to do with the greed of
> speculative
> > banks that lured
> > people into buying homes they really could not afford.
> I
> > think that they
> > knew--or thought they knew, statistically, that a
> certain
> > percentage of
> > borrowers would not be able to pay their mortgages as
> rates
> > rose, but they
> > lowballed the figures when they viewed the stats as
> they
> > wished to see
> > them. Here is an interesting essay by Nassim Nicholas
> > Taleb who posits that
> > the banks,and the Fed, viewed probability through
> > rose-colored glasses:
> >
> >
> http://www.edge.org/3rd_culture/taleb08/taleb08_index.html
> >
> > A big part of my job at the County is looking at
> > "risk" (terrorism, flood,
> > famine, etc.) and matching it against
> "impact"
> > (no one gets hurt, many get
> > hurt, everyone's dead, etc.) and coming up with an
> > analysis (Risk Impact
> > Analysis). Generally, events that are low risk,
> meaning
> > they have a low
> > probability of occurring, have greater impact than
> events
> > that are high risk
> > (high probability). If we wish to minimize risk, then
> we
> > concentrate on
> > things that are higher up on the risk scale. For
> example,
> > it's a pretty
> > high risk (high probability) that someone would bring
> a
> > weapon into a
> > courtroom to settle a dispute, avenge a death, etc.
> The
> > impact, though,
> > would be (statistically) fairly low as the offender
> would
> > likely be subdued
> > or killed before hurting more than one or two people
> in the
> > courtroom. We
> > want to minimize risk, though, so we put metal
> detectors at
> > every outside
> > entrance and at the entrance to the courtrooms.
> >
> > Now the risk of a nuclear suitcase bomb being exploded
> > inside the courthouse
> > is, statistically, quite low. The impact of such an
> event
> > would be quite
> > high (everyone's dead). Because we "manage
> for
> > risk", though, we don't put
> > too much time or money into "hardening" our
> > environment. If we did, that
> > would be "managing for impact" and leave
> > ourselves open to those events that
> > are much more likely to occur.
> >
> > It appears that the banks managed for impact, or for
> those
> > low-probablility
> > events, and allowed themselves to be more open to
> risk.
> > The impact is that
> > they would make oodles of money from the up-tick in
> > adjustable-rate
> > mortgages and figured the risk of loan defaults to be
> > statistically
> > manageable. They figured wrong.
> >
> > The $700B grew to $800B as money for pet projects was
> added
> > to the bill.
> > It's just like going into a car dealership and
> picking
> > out a car you can't
> > afford to begin with, and then you upgrade to leather
> seats
> > and a bigger
> > engine.
> >
> > Where is the $700B going to come from? Well, the
> Treasury
> > simply doesn't
> > have that kind of money. So what are they going to
> do?
> > They are going to
> > print it. Simple as that. The idea is to
> > "infuse" the system with dollars
> > to make banks more comfortable with the idea of
> lending
> > even more money--to
> > me, you and each other. The trouble in this scenario
> is
> > that Risk and Impact
> > are both high. The risk is that inflation will get
> out of
> > hand, and the
> > impact of higher prices in a receding economy is,
> well,
> > depression.
> >
> > So why was Congress, both House and Senate, Republican
> and
> > Democrat, so
> > eager to push this bill when the vast majority of the
> > electorate said,
> > "No!"? I have no idea--unless Congress
> knows
> > something we don't.
> >
> > -----------------------
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>
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