Before grilling Sandy about her charitable acts, what about you? What do you do to help people?
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Buffalo, you are more intelligent than this. For example, Morgan Stanely is not some dumb little people but they put together packages of sub prime (and some other high interest rate income sources) and sold them (at high leverage) and just today announced 3.6 billion in loses - the first time ever in 74 yearss that MS has had a net loss. (China just picked up 9.9% of MS for 5 billion. About the same share of City and USB that got sold for the same "stupidity" of some very sophisticated mangers. At least the CEO of MS has enough sense of honor to renounce his annual bonus, but some are still getting billions for their dumb performances.)
I seldom agree with GWB, (Or secetary Paulson) but the mortgage rescue plan is sound economically from the US's POV. Only people not more than two months behind in their mortage payments, who have a chance to pay will not have their house foreclosed but rates frozen instead. (Already many more homes each month are being piut on the market, depressing ALL home prices. Total of this lose,alone, to US economy is much more than the taxes to float this plan.) These "losers" as Sandy calls them, will have their mortage rates frozen, instead of increased. (The plan is an attempt to keep the nation's loses as small as possible. The cost of more foreclosures, more than a year of unsold house on the market, now "only' 11 months, would cost you much more than the taxes to pay for this plan. You are not so stupid as to want that are you? I.e try to make greater "losers" of ALL home owners (and apartment building /complexes also, and merchants who see their sales drop, etc. etc.)
Actually as GWB has destroyed the US economically, I might like that as then the collapse of the dollar might come while George is still in office and assure he gets the credit for it he deserves.
There are always two parties to each mortgage. One, the borrower, may not be very financially sophisticated, but it is the other parter, very financially sophisticated, who invented the "nothing down," the "balloon mortage", the ARMs, the "teaser rates" etc. Why did they do this? That too is clear:
Greenspan kept interest rates at a historic low of 1%, less than inflation so actually a negantive real rate. (This was to give financial aid to the already well off, so of course GWB liked that also. - I do not recall either you or Sandy complaining about this "aid to the wealthy" that helped keep their losses caused by equal foolishness, low. -Perhaps I missed that post?
) While rate were effectively negative, the banks could not profit with regular loans, so these very sophisticated "smart guys" invented ways to get high interest rates from those who really could not pay them long term. High rates alway go with high risk, but here again the "smart guys" running the banks were inventive. They packaged, and repackaged these loans (to diversify or reduce the risk) and resold high incomes with lower "risk" so they claimed. Big investor all over the world, more sophisticated people, like the managment of Northern Rock bought up these packages as if they were apple pie, made in USA, and hot from the oven.Now, you and Sandy, want to place all the blame on the little, financially ignorant, guys, who were misslead by the sophisticated guys. I would say "incredable" or LOL, IF YOUR pov WERE ONLY REDICULUS.
SUMMARY The root cause of the current problems is the aid to the wealthy granted via low interest rates by Greenspan so that the already wealthy would not "suffer" too much when the dot.com bubble burst. The current aid to the poor, in contrast, makes good economic sense for the US as a whole. Also as someone else noted, if the US education system were not so bad, perhaps it would not have been possible for these "sophisticated smart guys" to sell their stupid inventions of new loan mechanism to the "lossers" as Sandy would put it.
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Why not make any kind of gambling, prostitution, and drugs legal? If you suffer as a result of indulging in these things, it's your fault alone, right?
Buffalo Roam
Registered Senior Member
In most States these are illegal, except for tightly controlled legal operations controlled by the State.
And you are responsible for all losses from indulging in the activities, but there are even people who want us to take care of those who indulge these activities, and make good their losses.
Oh God... I've practically dedicated my entire life to help people. My wife herself is living proof of my dedication.
So why not make certain kinds of mortgages illegal? Why not make lenders financially responsible for the loans they make?
What do you mean? Especially the my wife is living proof part.
Buffalo Roam
Registered Senior Member
They have which is why we have this mess.
kmguru
Staff member
Yesterday, I was talking to my bank manager. I wanted to hear from the horse's mouth. He said that people lost jobs. So without income, it is hard to pay mortgage. He also said, the bank business is down. The average deposits are down. The savings have gone down considerably. He hopes this Christmas is good, so that companies are going to hire come January, but has doubts when I brought up the China factor. He said, in the past, we did not have the China factor - now no one knows what to do. In the past we were only dealing with 30 Billion trade deficit, now it is 20 times that. People do not realize it is not a pot hole, it is crater....you can not drive through it....
Buffalo Roam
Registered Senior Member
The unemployment rate has remained steady at about 4.5%, that is statistical full employment, and it still is your responsibility to buy a house that you can afford the payments for, under all circumstances, the problem is from mistakes by congress in making laws that forced lending institution to make loans to people who couldn't qualify, a ARM is suppose to be a short term Loan, and converted to a fixed before the rates rise, they were never meant to be a long term mortgage, but congress has more than a small part to play in it, and the only thing happening now is we are delaying the final crunch, sorry for those people who got them selves in such a fix, but they have to take the medicine, and get this over, to waste taxpayer money on this isn't fair to those of us who handle our finances responsibly, and just deepens the debt.
the problem right no is not unemployment but rather under employment
They will likely go bankrupt. I don't see how that's beneficial to the economy...
Whatever happened to keynesian ecomics actually being good for the economy....
Like most people, he probably doesn't even understand what goes into the 4.5% figure and what's left outside....
That is not very realistic if you really mean the part I made bold. For example of a possible "circumstance" is being hit by drunk driver and becoming a paraplegic. Obviously no one can meet this requirement you state.
I do not think this is true. Please tell what law congress passed that compelled loans to the unqualified.
In general you are ignoring the true casue of the current sub-prime related mess that I explained in post 522. Namely that lending institution could not make conventional loans or profits when the FED reduced rates to 1% as effort to controll the losses (mainly of the wealthy) in the stock market when the "dot.com" bubble burst. Lending institutions had no choice but to also offer low cost loans. I am not alone in placing the main component of the blame for the current mess directly on Greenspan's FED and it bail out the rich in a battle against the spill over from the dot.com foolishness of the rich. i.e. Back then, internet related companies with no profits and growing debts (most of whom have now gone bankrupt) often had 100 times their assets as their "market capitalization." Very few of the "foolish poor" had mortgages 100 times their assets.
Thus, why are you only blaming the ill-educated poor who accepted the novel new mortgage loan types from the very very much more sophisticated leanders? You do know that there are two parties to each loan do you not? Why blame the poor who unwisely borrowed when the lending institution were the creators, and promoters of these new loan vehicles? I do not even blame these institutions as with the FED pushing rate down to 1% (actually negative in real terms) these institution could not make conventional loans to most people.
SUMMARY: The basis of the problem is the FED's bailout of the wealthy who would have lost much more in the dot.com bubble bursting if the FED had not come to the rescue of the stock market. Please support your claim that Congress is also to blame. (That may be true, but you have wrongly and unfairly placed the blame on the ill educated instead of the sophisticated who created these new loan types and "sold" them to the financially ill-educated. IMHO.) You ignore the greater detail in post 522, showing this.
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kmguru
Staff member
Wasting taxpayers money is definitely a bad thing. But we waste it anyway...like war in Iraq, buying billion dollar systems or giving Kenya $500 million in the name of AIDs (or was that for Obama?) or whatever the government spends 3 Trillion dollars on....
kmguru
Staff member
Iraq did not terrorize us...so why I am paying? If you want to pay, that is your business...get all the money from your modeling or running or pimping....and send them to Interpol.
"... Dec. 20 (Bloomberg) -- Bear Stearns Cos., the securities firm that helped trigger the collapse of the subprime market, reported its first-ever loss after writedowns for mortgage holdings and declines in trading and investment banking. ..."
From;
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6U7WHd5UafI&refer=home
"... Dec. 20 (Bloomberg) -- MBIA Inc. fell the most since 1987 in New York trading after the world's biggest bond insurer disclosed that it guarantees $8.1 billion of collateralized debt obligations that investors say have a greater chance of losses. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTE8pcSvpVXc&refer=home
"... Dec. 20 (Bloomberg) -- SunTrust Banks Inc. injected $1.4 billion into two of its money-market funds, becoming at least the seventh company to bail out customers from an investment traditionally billed as one of the safest.
...Losses caused by a collapse in global credit markets spurred companies including Bank of America Corp. and Wachovia Corp. to bolster money funds so they don't ``break the buck,'' which can shake confidence and spur withdrawals by clients. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSFPRpT9zWIg&refer=home
"... Dec. 20 (Bloomberg) -- The U.S. economy is at greater risk of faltering next year, according to an index of leading indicators, and a gauge of manufacturing in the Philadelphia region fell the most since the last recession. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYqB7xEgkiBw&refer=home
"...Dec. 20 (Bloomberg) -- United Parcel Service Inc.'s long- term credit rating was cut from the highest level by Moody's Investors Service because of added debt to leave a Teamsters' pension fund and ['b]weakening demand for freight shipments.[/b] The company's senior unsecured rating falls two steps to Aa2 from Aaa, affecting $2.5 billion in debt ...UPS had been among eight companies to hold the top rating from both Moody's and Standard & Poor's. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aPmuD57XviJc&refer=home
Will this day's "good news" never end?
PS to Sandy: Please pray harder tonight than you did last night. US can not take many more days like today.
From;
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6U7WHd5UafI&refer=home
"... Dec. 20 (Bloomberg) -- MBIA Inc. fell the most since 1987 in New York trading after the world's biggest bond insurer disclosed that it guarantees $8.1 billion of collateralized debt obligations that investors say have a greater chance of losses. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTE8pcSvpVXc&refer=home
"... Dec. 20 (Bloomberg) -- SunTrust Banks Inc. injected $1.4 billion into two of its money-market funds, becoming at least the seventh company to bail out customers from an investment traditionally billed as one of the safest.
...Losses caused by a collapse in global credit markets spurred companies including Bank of America Corp. and Wachovia Corp. to bolster money funds so they don't ``break the buck,'' which can shake confidence and spur withdrawals by clients. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSFPRpT9zWIg&refer=home
"... Dec. 20 (Bloomberg) -- The U.S. economy is at greater risk of faltering next year, according to an index of leading indicators, and a gauge of manufacturing in the Philadelphia region fell the most since the last recession. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYqB7xEgkiBw&refer=home
"...Dec. 20 (Bloomberg) -- United Parcel Service Inc.'s long- term credit rating was cut from the highest level by Moody's Investors Service because of added debt to leave a Teamsters' pension fund and ['b]weakening demand for freight shipments.[/b] The company's senior unsecured rating falls two steps to Aa2 from Aaa, affecting $2.5 billion in debt ...UPS had been among eight companies to hold the top rating from both Moody's and Standard & Poor's. ..."
From:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aPmuD57XviJc&refer=home
Will this day's "good news" never end?
PS to Sandy: Please pray harder tonight than you did last night. US can not take many more days like today.
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