Comments on: Ballmer: 'The world borrowed too much money'
Speaking at Stanford University, the Microsoft CEO said the origins of the economic crisis are pretty straightforward.
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I blame the borrowers more than the lenders. A person making 50K/year have no business trying to buy a $500K home without any savings. And then that person goes on susie orman and asks her if he can buy that $45K car on top of the home.
Simple point is this: the consumer's who bought into loans they could not afford did so foolishly, and the banks who risked money on people who were well above reasonable margins of risk did so foolishly. The average (responsible) consumer who lost a fortune in the drop of his home price while he responsibly paid his mortgage is the victim, along with those who are out of work now who were the responsible guy paying his mortgage a year ago.
Banks did not give people loans that those people did not ASK FOR. It is that simple. The unfortunate truth is most of those bad loans are not hurting the irresponsible people who took them nearly as much as they are hurting the responsible consumer. That is not the solely the bank's fault either. You should be more angry at the irresponsible people taking loans they could never have repaid than at the banks... it is foolish to say ANY adult over 18 years of age and not handicapped shouldn't be held responsible for getting into loans they could not repay. Libraries are available to anyone who TRIES to get to them (key word is in there if you missed it). They had the opportunity to understand their finances before getting into that situation IF AND ONLY IF THEY TRIED.
Those bank Debit's in the US, where backed by other banks retirement funds, investment funds around the world. Banks in many countries lent money they did not really have. Only countries with strong controls on banks have come out a little less weathered.
What happens in the US, tends to get mimicked around the world. Many times thanks to TV, have you watched many flip this house shows lately? They where the rage a year ago.
People in many of the G8 got caught up in belief that there was no end to what you could ask for a house, and the market in many countries, has not come back down.
This drive was fueled by the banks lending easy money, extending mortgages from the traditional 25 year to 35 and 50 year mortgages.
In my home town, I listen as real estate agents continue to try and promote increased housing prices, house prices that have gone up 200% over 5 years.
I have listened to them say its population influx, yet immigration is at an even 3.2% new housing starts at 4%. Odd new houses are being built faster then immigration.
I hear them say there are less houses on the market, yet over the past year used house inventory has gone up 17%, but thats only for houses on the market less then 3 months. When you take the 3-12 month into account its closer to 20% over the past year.
One radio add that ran daily finally vanished, as this real estate agent who use to run his own news type show, bragged about buying your house if he could not sell it in 30 days. Strange he has vanished.
But, as I said its not a US thing, and yes some people should have known they could not afford it, but thats not how the banks sold it.
They sold it with the balloon payments on the premise you buy house a) at x% and sell it in 1 year at y% of increased profit, since the average property saw a double digit increase in house value. You then use the capital you made to buy house b) with more money down, increasing your equity in the house, you then flip it again, before higher interest kicks in. You repeat till you can buy a house cash.
This worked well for a long time, then the housing market crashed, and suddenly all these houses lost values, and they could not be sold, then the higher interest kicked in.
It was a gamble taken both by the banks and the mortgage holder. It was a scheme cooked up, and taught to many in investment class's echoed on TV, and boasted about by self made millionaires. Many knew it could not last. But, it was a perfect storm created by some get rich quick boy's higher up in the financial markets. Many just bought into the dream. The only ones walking away happy are the guys who started the entire scam.
But as I said to people in the US they see this upfront, but its a senario playing out around the world.
Realtors hyped real estate saying 'It's all ok" when it wasn't.
Banks loaned to people who they shouldn't have.
People borrowed more than they could afford.
Wall Street types didn't assess the risks of the "loan packages" they were hawking correctly.
Buyers of those packages didn't either.
The insuraners of those bundled mortgage packages didn't set their rates according to the risk.
If anyone had done what they were supposed to do the chain would have stopped.
Mind you, these same two people are over the top pro Apple fanboys, so it is possible that they are just trolling and not actually adding anything of value to the conversation. It's up to the reader to determine that.
I agree with some of what Ballmer says and disagree with other parts. I would like to also hear Steve Jobs' thoughts on the matter.
Just one example. Yahoo. Despite a company that was so dead in the water the flies had already come and gone he couldn't manage to take it over - Even with the massive power and money behind Microsoft.
He can't seem to do anything right, and at every turn people laugh at him. Half the time because he actually does something so absurd as to merit being laughed at. The other half? Because of the first half. I mean come on. He is a CEO. But not just of a large nameless company, but of a company with a enormous legacy.
I mean I can't think of a single good thing that has come out of Microsoft that was set into motion after Bill Gates left.
And trust me. I'm not Apple fan boy. The most I have ever done was buy a iPod... And I sold my iPod Touch when I bought my Omnia.
If that was not your intent, then some research may be in order before your next posting.
1. Congratulations on posting something other than "Balmer is an ape. Amen".
2. Can you explain how "I agree with some of what Ballmer says and disagree with other parts." is blindly defending microsoft?
3. I have been reporting your other posts (balmer=monkeyfun) as a violation of the terms of service (flaming other users). Have a nice day.
Excellent postings! Would you care to expand upon them with something like facts, evidence, or any sort of background? I would be curious to see what you have to base your comments upon. You might even sway me to change my opinion as well.
By the way, your macro key is stuck again- you're makin the same comment in all the Microsoft stories again. Please check on that, would you?
Thanks!
Reality is the reason people attack him is that they don't like MicroSoft. MicroSoft has done a lot to earn that animosity.
I like Microsoft actually. However I hate Ballmer.
But I'm sorry. I am quite uniformed - I thought Yahoo has yet to be bought out. Apparently I was wrong. Can you do me a favor though? Tell every major news company about this fact. They all seem to also be uniformed.
Another point of contention is the economic divide. We are so fixated in economic growth that the more money that's pumped into the economy the rich will get richer at the expense of the poor. It is very concerning if economic growth doesn't go in tandem with increase employment.
Ballmer is the least person respected to talk about the economy. His goal at his company is to maintain a monopoly to ensure greater profit. With $30B cash, Microsoft still opt to lay off 3,000 employees. When companies take a hold of the economy they will further increase unemployment while increasing their profit. Microsoft is still a monopoly.
It's only the magnitude of the problem that has the government doing things differently than normal practice.
One of the issuesi s that banks now make money by flipping loans. Not by carrying them. Loan fee's are the new bread and butter. The temptation is to loan more to less qualified people to make those fees. If they carried the loans they would pay a lot more attention to the ability of their borrows to pay them back.
Explaining the economic crisis that has slowed business worldwide and caused Microsoft to have its first companywide layoffs, Ballmer told the crowd at the school's packed Memorial Auditorium, "The world borrowed too much money." ...]"
Economic crisis.....!!! What economic crisis???
Show us the missing "Applications Programming Interfaces" (APIs) in Code-Base OS/2 (Windows) that should/would inform our judgment.
And, remember always - "Technology Rules The World"!
On January 20, 2009 - It was "Mission Accomplished" - Again!; and, that's why the question is - "Economic crisis".....!!! What economic crisis???
Long Lives OS/2!
:Economic crisis.....!!! What economic crisis???:
Perhaps you haven't been paying attention to the news for the last five or so years? Heck, just the last couple of months? Look at the number of layoffs, trade deficits, gas/oil prices, government overspending, etc.
I trust you must be aware of some of this?
wrong! the world spent too much money on your crooked overpriced products
"All I'd ever done is interview for jobs and market brownie bits," - said Ballmer
all you ever did was to act as a buffoon in TV commercial flogging the greatest con in the IT industry; Windows OS, that is
Time for people to start throwing bananas (instead of eggs) at this corpulent, stridently loud, sweaty monkey
If you wish to hurl insults at the man, go right ahead. I believe he's got a fairly thick skin by now and can shrug off fanboys without too much effort.
Also, considering their recent statements, they're not doing as well as you intimate.
Hand, feed, don't bite, etc.
Microsoft, Apple, Dell, Red Hat- they have nothing to do with the economy. They don't have an impact on those decisions our leaders in Washington have made. Seems like they are asking the wrong people for an opinion.
As to blaming the borrowers, sorry that doesn't scan. The banking business has always been you apply for a loan and the bank grants you one depending on whether or not they see you as a good credit risk. Yes some borrowers weren't financially savvy, but that's why they're not bankers. Banks who we expect to be financially savvy, weren't. Plain and simple, they got stupid and greedy. Blame g
It IS a bad photo choice, to be sure. :)
"Yeah, and now seaspray is reporting me for flaming. "
I don't agree that you should have your comments flagged for flaming- they are disruptive, illogical, immature and rather insulting to the readers of CNET. But the right to make yourself look like an idiot is just that- your right. I don't think you've violated the EULA for CNET at this time and should be allowed to continue to spout your nonsense as much as you wish as long as you do not cross that line and violate the EULA.
The manner in which you conduct yourself here is purely up to you. Nobody can force you to behave like a juvenile- that is your decision.
- by rpaloalto May 8, 2009 5:38 PM PDT
- Ha, I think it's very sad. That a company as large as microsoft has such a bumbling moron as CEO.
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