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Old 11-12-2011, 08:48 AM
 
Location: Chicago
3,097 posts, read 2,896,622 times
Reputation: 2341
Quote:
Originally Posted by chet everett View Post
That is just the most recent example of "little guys" being at the base of a pyramid of wrong doing.
amazing, chet. you're a genius and you nailed it! it isn't the 1% who is at fault. it's the 99%. you're a genius.

and isn't america a wonderful country, chet.

as you note, there is nothing wrong with a fraction of the top 1% (you know about 400 families) owning as much wealth as the as the bottom 50% of the population (you know, some 150 million folks).

what a bunch of leaches those folks who lost their homes were, paying a low, low mortgage for 5 of so years before it BALLOOOOOOOOOOOOONED in size (I wonder who thought up that great idea). But, heck, there is nothing wrong with a bad mortgage; I mean you can always chop it up and redistribute it so the bank or the other "good guys" aren't left holding the bag when it collapses..

of course, i could be wrong. maybe all these low income, under educated folks pulled their resources together, demanding the credit to buy new homes. of course they were able to read all the details on these loans or were able to hire lawyers to help them do so. the banks, of course, were reluctant to give them the loans, but these folks, through their incredible power, forced the banks hands. Then these folks demanded the banks to give them a "teaser" rate for 5 years, knowing of course, that when it ballonned size, they could still go on paying it. of course, these people may have been poor, but they received such a good public education (although slashed by funds) so they really were capable of understanding what they got themselves into.

Kep, chet, you are one compassionate guy. the merriest of christmases to you and your uncle ebenezer.

Chet, I take great pride in the fact that you would think what I have to say to say is full of s**t and that I don't know my you-know-what from a hole in the ground; indeed I would be crushed if you didn't think that of me.

what's nice for you is, chet, while a nobody like me might totally disagree with what you say, one of the real heavyweights (and I do mean heavyweight) like Rush Limbaugh would embrace every word you wrote.

Last edited by edsg25; 11-12-2011 at 10:17 AM..

 
Old 11-12-2011, 03:43 PM
 
1,882 posts, read 2,136,075 times
Reputation: 841
I do not believe that most people were lying about their ability to pay. Maybe some were. Most just wanted to be a part of the american dream of owning a house and they believed everything would work out...they would keep their jobs and the market would continue to go up. I always say when you take out a mortage you have to come up with that payment not for a year, not for six months, not even for five years, but usually for thirty years. A lot of bad can happen in that time, and many people were too optimistic that they would keep their jobs and be able to pay. When that did not happen, oops. I do not think they were crooks.
 
Old 11-12-2011, 07:04 PM
 
Location: Schaumburg, please don't hate me for it.
826 posts, read 798,526 times
Reputation: 907
Quote:
Originally Posted by chet everett View Post
The real problems of the mortgage crisis OF COURSE involved unqualified borrowers lying about their ability pay.
I think somebody needs to re-adjust their tin foil hat a little bit.
 
Old 11-12-2011, 07:25 PM
 
21,478 posts, read 35,501,299 times
Reputation: 10513
The lying was as much to themselves as anything -- folks that should have known better using reverse amortization loans, signing up for HELOCs that gave them cash to waste on every kind of electronic toy / personal water craft / motor cycles etc...

Yes, the lenders should have been a lot less eager to allow this reckless behavior. Yes the ratings agencies were extremely complicit in the charade that this was "invest grade debt". The buffoons that allowed the firms to gorge themselves of this junk largely are still employed in ridiculously well compensated roles in brain dead firms that now making stupid bets on municipals bonds and other fixed rate securities that are going go BOOM in a nasty way real soon now. BUT the folks that claim the 99% are blameless are LIARS. No defaults? No crisis. Simple.

The "extended period of unusually low interest rates" is FRBG magic potion to try and keep the bottom from really falling out. The alternative that some looney birds call for -- "let em fail" would result not in the sort of pain that one feels pulling the sticky tape off a scab but in slicing open ones femoral artery -- only the very very swift / lucky would be able get a tourniquet on and loss the limb before they'd die in a pool of red...

Most of the .001% that have evil lever pullers like GS watching their personal wealth would not even hear the scream of the mere .01% that really would take a blood bath in such a disruption to global finance...
 
Old 11-12-2011, 08:25 PM
 
Location: Chicago - Logan Square
2,898 posts, read 3,338,475 times
Reputation: 2529
Quote:
Originally Posted by chet everett View Post
No defaults? No crisis. Simple.
Not quite. The biggest problems was the leveraging of MBSs, CDOs and banks defaulting to each other. If they had kept capital on hand to match the risk they had assumed there would have been no crisis. Assessing that risk was their job, it is a BASIC function of what their job is. They failed miserably. A homeowner's responsibility is not to assess the risk, it is to fulfill the contract the bank offers them.

Ultimately all of the people who lost their homes to foreclosures lived up to their end of the contract (which was that they paid or they lost their house). Either paying or losing your house is an honest fulfillment of that contract. It is the job of banks to assess the risk of giving someone a loan, and to price it accordingly. If banks had done due diligence in valuing properties, valuing the MBSs they bought, and pricing interest rates to match the risk of the loans they would have been fine. Again, THIS IS THE BASIC FUNCTION OF THEIR JOB. When any business utterly fails to do a competent job they go under - unless it is finance related, where your failures threaten the value of the dollar and the ability of other (competent and responsible) businesses to keep operating.

The banks had a similar responsibility to make sure they had the needed capital on hand, and if they didn't, they'd go under. When they didn't have the capital they got bailed out, and then gave themselves more crazy bonuses to reward themselves for lobbying for the bailout.

**** the banks and bankers, any insolvent bank should have been nationalized and management prosecuted where appropriate.

Last edited by Attrill; 11-12-2011 at 08:39 PM..
 
Old 11-13-2011, 04:02 AM
 
Location: Chicago, IL SouthWest Suburbs
3,528 posts, read 2,816,735 times
Reputation: 6078
Quote:
Originally Posted by chet everett View Post
The lying was as much to themselves as anything -- folks that should have known better using reverse amortization loans, signing up for HELOCs that gave them cash to waste on every kind of electronic toy / personal water craft / motor cycles etc...

Yes, the lenders should have been a lot less eager to allow this reckless behavior. Yes the ratings agencies were extremely complicit in the charade that this was "invest grade debt". The buffoons that allowed the firms to gorge themselves of this junk largely are still employed in ridiculously well compensated roles in brain dead firms that now making stupid bets on municipals bonds and other fixed rate securities that are going go BOOM in a nasty way real soon now. BUT the folks that claim the 99% are blameless are LIARS. No defaults? No crisis. Simple.

The "extended period of unusually low interest rates" is FRBG magic potion to try and keep the bottom from really falling out. The alternative that some looney birds call for -- "let em fail" would result not in the sort of pain that one feels pulling the sticky tape off a scab but in slicing open ones femoral artery -- only the very very swift / lucky would be able get a tourniquet on and loss the limb before they'd die in a pool of red...

Most of the .001% that have evil lever pullers like GS watching their personal wealth would not even hear the scream of the mere .01% that really would take a blood bath in such a disruption to global finance...
Negative Am Loans- AKA the pay option ARM.
This type of loan is or was nothing new and was abused both by the borrowers and by the lenders.

This type of loan is perfect for a person who is extremely responsible with finances.
and a person who may not stay in a property for a long time.

The problem you had with the pay option arms were the companies and LO's were selling the lowest payment possible, which was surely a death trap and time bomb waiting to happen. The payments would sky rocket due to the loan turning into a full amortization loan.

It was literally a Shock to your own financial budget.
These type of loans should clearly never be marketed.
As A. Greenspan used to call them Exotic and toxic.


Very very few people realize what happens when a loan will recast.

If you remember back in 2005 -2007 you would see or hear loans advertised at 1% on TV I believe it was quicken loans advertising a 300k or 400k house at a ridiculous low payment. IMO this was THE most toxic loan out there because of the way it was presented.

The standard ARM with a subprime lender 2-28 or a3-27 was much easier for even a novice homeowner to understand the terms. I can agree with you sometimes it was abused but you also had LO's who made it sound like it was a sure thing to get out of the loan. Not always the case , as we have all learned.

Problem was a LO would tell them to literally flip the loan in a few years.
When the bubble went bust they could not do that anymore...
 
Old 11-13-2011, 04:06 AM
 
Location: Chicago
3,097 posts, read 2,896,622 times
Reputation: 2341
Quote:
Originally Posted by chet everett View Post
BUT the folks that claim the 99% are blameless are LIARS. No defaults? No crisis. Simple.
that group of 99% is no group at all. it is made up of individuals who on their own, one at a time, decided to try to get a mortgage.

many of them were terribly uneducated, chet, and purposely so. do you realize what a hand the 1%ers had in making sure they stayed dumb, compliant, and good worker bees by making sure that public education was not only underfunded, but incredibly dumbed down.

they were also people who had no breaks in this society from the jobs that were taken away from them to tax rates for their low incomes that were many fold the percentage paid by those were banksters with the loop holes and their ability to game the system.

for over 30 years, every decision this nation has made has been to enrich those who are already very rich, while all others...very much all these poor shmucks trying to get a mortgage.....saw their incomes freeze or, more likely, go down.

the financial sector was deregulated because it had the clout to make it so. It is the culprit. Nobody stood at its head to force it to create these balloning mortgages and to give people who couldn't afford it a mortgage. It did so because it saw it could make a killing in do so and it did so by chopping up all these (worthless) mortgages and bundling them in such a way that the risk to themselves was minimalized or eliminated.

Chet, you must live in some dream world. You talk about corruption being an ill to cities which is a laughable notion when you have a national government that is corrupt down to the level of all three of its branches.

You have a system that is broke. And it is one that will come toppling down on each and every one of us, including most of those guys making their fortunes on Wall Street who still are, way, way, way below the income of the 1%ers.

Why do you think OWS scares the crap out of these guys? Because it is an organic system that has grown because there no longer is a choice that it won't. Again: the system is broke and more and more people know it. The emperor wears no clothes.

Chet, reality is in the process of biting you in the ass, like it is to the rest of us; it's a crashing system of a nation that put itself on self-destruct. It isn't even a case of liberal vs. conservative; it's about total dysfunction. wake up, man. and start by realizing that these poor and uneducated masses (often minorities who face endless American injustice) are victims, not perpetrators.
 
Old 11-13-2011, 07:01 AM
 
Location: Chicago
3,097 posts, read 2,896,622 times
Reputation: 2341
Quote:
Originally Posted by chet everett View Post
When firms look to build auto plants or high quality appliance factories they avoid states with a history of entrenched unions. Wages are based on worker productivity NOT how much some diamond cufflink wearing union boss can extract for himself...
i want to go back to chet's observations here because they are too important and too disturbing to ignore.

all aspects of any society are subject to corruption, so corruption cannot be the yard sticks we use to measure their worth. what is the norm in any society is that the degree of corruption is spread fairly evenly across all its institutions. the flaw is in how we carry things out.

do chet's "diamond cufflink wearing union bosses" exist. Probably. but in many unions, you won't find them. And even if you do, they are making a pitenance of what the other side, management is making. Those are the guys who really live like kings. But if you want straw men, union bosses are there, just like those illegal Mexican immigrants (who work their asses off for jobs Americans won't take and who are encouraged by the very right wing forces of regression that seek their back breaking/low pay labor.)

Chet seems to forget that the very businesses that left heavily unionized northern states for the "right to work" paradises of the Sun Belt only made a temporary encampment in those states. When the masters-of-the-universe (American style) realized that labor was even cheaper in Mexico than in the US, it was good bye to Dixie. And soon, good bye to Mexico as there were far more third world conditions overseas. What a sick, sick, predatory mess.

you suggest that labor unions are bad for business. I disagree. About 180 removed from you. Labor unions raising the pay of laborers is a case of a rising tide raising all ships. The US economy was never as strong as in the 1950s when the real benefits of the New Deal kicked in so well with high wages and money in the pocket to spend. This was the period when the US thrived like no other.

Low taxes and union busting is good for business only in the sense that it hurts everything else around it. Low taxes produces a society without good education, working infrastructure, police and fire protection that works, health benefits that keep a society functioning well.

remove those and keep labor costs low you have a hell-on-earth and the corporations lose on the basis that the public has no money to spend. As in 2011 when this should be so obvious.

The economy does not exist for the richest among us. The economy is all of ours. If we want to slash wages to the degree that Chet suggests, than we will be living with a standard of living that our competitors have...the China's and India's of the world, the very economic structure our oligarchs wish for us.

Is Chet or are you worried about "being competitive" with those serfs that will work for less money than even our American serfs do? Fine. Get out of trade agreements like NAFTA. And protect our industries. Put the type of tarriffs on incoming products from China and the rest of the far east, the same type that they put on ours. Those tariffs in place means that our products would be as competitive as the ones from overseas, benefiting everybody since the fruit of the labor will circulate in the US economy, not one overseas. And tax the wealthiest among us; with those taxes, so many of the problems we face could be solved. No nation can expect to thrive with the income disparity of the United States, arguably the worse of any developed nation (short of Britain which sadly seems to mirror us today).

You can't build an economy on service jobs and that's where we are at today. We've exported our manufacturing jobs overseas because we can't compete with the tragic little that overseas' workers get for their labor. In some case, virtually slave labor. Truthfully you can't shop at WalMart and say you are against slavery. One service field, finance, went from around 7% of our economy to close to 40%. Finanace became the field of choice for those who wanted to get rich (and do it quick). Even our universities emphasised their b schools over all other fields, fields that enrich our economy and quality of life in a way that finanace does not. Finance does not produce a thing, it only shifts resources. When that shift is done rationally, money is in the right place for development. But that isn't what is happening today. Today finanace is little more than a casino.

We are living today off the remnants of society that once took bettering itself very seriously and took an adult approach to taxation. It built a magnificent infrastructure (which today falls apart) and an educational system that fueled the growth of American ingenuity. We took its benefits and failed to pass it on to the next generations.

any society that fails to invest in the commons, the things that we share is doomed. We are all in this together and those on top are crashing the system, a system that took great effort from so many people over the centuries to create.

We are all in this together. And without practical, pragmatic solutions that avoid the doctrinaire nature of all the -isms....capitalism, communism, socialism, etc......we cause our doom.

with the issues facing us, we no longer have the "luxury" of not being on the "same side".
 
Old 11-13-2011, 08:24 AM
 
Location: Chicago area
1,798 posts, read 1,858,295 times
Reputation: 1186
+1,000,000
 
Old 11-13-2011, 09:25 AM
 
Location: Chicago, IL SouthWest Suburbs
3,528 posts, read 2,816,735 times
Reputation: 6078
Quote:
Originally Posted by edsg25 View Post
that group of 99% is no group at all. it is made up of individuals who on their own, one at a time, decided to try to get a mortgage.

many of them were terribly uneducated, chet, and purposely so. do you realize what a hand the 1%ers had in making sure they stayed dumb, compliant, and good worker bees by making sure that public education was not only underfunded, but incredibly dumbed down.

they were also people who had no breaks in this society from the jobs that were taken away from them to tax rates for their low incomes that were many fold the percentage paid by those were banksters with the loop holes and their ability to game the system.

for over 30 years, every decision this nation has made has been to enrich those who are already very rich, while all others...very much all these poor shmucks trying to get a mortgage.....saw their incomes freeze or, more likely, go down.

the financial sector was deregulated because it had the clout to make it so. It is the culprit. Nobody stood at its head to force it to create these balloning mortgages and to give people who couldn't afford it a mortgage. It did so because it saw it could make a killing in do so and it did so by chopping up all these (worthless) mortgages and bundling them in such a way that the risk to themselves was minimalized or eliminated.

Chet, you must live in some dream world. You talk about corruption being an ill to cities which is a laughable notion when you have a national government that is corrupt down to the level of all three of its branches.

You have a system that is broke. And it is one that will come toppling down on each and every one of us, including most of those guys making their fortunes on Wall Street who still are, way, way, way below the income of the 1%ers.

Why do you think OWS scares the crap out of these guys? Because it is an organic system that has grown because there no longer is a choice that it won't. Again: the system is broke and more and more people know it. The emperor wears no clothes.

Chet, reality is in the process of biting you in the ass, like it is to the rest of us; it's a crashing system of a nation that put itself on self-destruct. It isn't even a case of liberal vs. conservative; it's about total dysfunction. wake up, man. and start by realizing that these poor and uneducated masses (often minorities who face endless American injustice) are victims, not perpetrators.

When I purchased my home the Realtor tried to push me into an interest only loan.

Point being not only did the lender push the loans but so did the real estate agents as a means to afford more home for your dollar.

Some real estate agents were as guilty pushing the home loans onto naive buyers to ..
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