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Old 09-27-2008, 10:19 AM
 
Location: Montana
1,219 posts, read 2,756,810 times
Reputation: 671

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Personally I think that the bailout money would be better spent helping the actual home-debtors facing foreclosure get back on track with their payments. Not to pay the mortgages off, but to help the ones who qualify(have a job), get back on track with a payment schedule and give them the opportunity to not lose their homes.

Seems like a better idea to me than to bail out the bankers that have profited already from the way the loans were mishandled to pad someones pocket. And a reliable payment schedule would help the banks over a period of time also.
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Old 09-27-2008, 10:50 AM
 
19,183 posts, read 27,737,865 times
Reputation: 4000
Quote:
Originally Posted by aus10 View Post
I would like to know just how many of these ARM's did not have an adjustment and lifetime cap? Our first home loan (1984) was a 3-year ARM at 13.5%. But I knew that it had a 2% cap per adjustment, with a 5% lifetime cap.
I don't have and haven't seen those data. Certainly there were more, and more varied, instruments out there in 2004 than in 1984. Enough so as to make the data on anticipated resets over the next few years look bad.

Quote:
Originally Posted by aus10 View Post
Didn't most folks take the two or three minutes if would have taken to ASK what happens if this goes up???
Whom would they have been sitting across the table from? A financial counselor? A lawyer? Or would it more likely have been a broker, a processing clerk, or a settlement company paralegal? What reason would borrowers have had at the time to suspect that the near-term future would be so different from the recent past? What were the interests of the mortgage issuer? Was this all a set-up of some sort, hoping to lure the unsuspecting into eventual default and foreclosure? Or was it the case that mortgage issuers didn't have any clue as to the future either?
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Old 09-27-2008, 11:21 AM
 
862 posts, read 772,238 times
Reputation: 149
Wall St caused it, or wait, the Govt. caused it.... could they be the same thing? Nah, this is america,,,,,,,
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Old 09-27-2008, 12:08 PM
 
Location: Heartland Florida
9,324 posts, read 23,230,141 times
Reputation: 4895
Government is the cause of, or the force that enables a few to profit from the many. Because government is necessary to settle disputes, it has to exist. Yet the longer a government exists, the more corrupt and self-serving it becomes. Today we see that government is seperate from the people. This is why we cannot fix the problem of economic distress. Our ideas are unimportant to the elite and well-conencted. This is why revolutions take place from time to time as an attempt to try and restore balance.
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Old 09-27-2008, 12:23 PM
 
19,183 posts, read 27,737,865 times
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Quote:
Originally Posted by tallrick View Post
Today we see that government is seperate from the people. This is why we cannot fix the problem of economic distress. Our ideas are unimportant to the elite and well-conencted. This is why revolutions take place from time to time as an attempt to try and restore balance.
I don't know as that's the case. I think the ideas of "the people" are quite well known and understood in and around govenrment, but that knowledge and understanding at these levels are both broader and deeper than what the average man in the street is likely to be walking around with. These people (or at least their staffers) are after all at the expert level in their various areas of specialty. Sometimes people choose to do what they know is right rather than what they think might be popular. Is that an example of leadership or evidence of being out of touch?
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Old 09-27-2008, 02:35 PM
 
Location: N. Ga
3,492 posts, read 3,097,101 times
Reputation: 1833
Quote:
Originally Posted by saganista View Post
Or was it the case that mortgage issuers didn't have any clue as to the future either?
I am neither agreeing or disagreeing with your comments and questions... but.. if like the old saying goes... if you can't learn from the past. How many cycles do we have to go through before people see that the economy always, always, corrects itself through one means or another and that somewhere in the future things were going to go bad. Perhaps it's a generation thing. I remember being taught to save for the future, credit was something to be used only as a necessity, and that homeownership was something where you saved years for a down payment, worked hard to pay off, and you didn't gamble with. Seems like the younger generation has a "have to have it now" attitude. I'm wondering too, the average age of those who are losing their homes due to mortgage adjustment issues vs. those who are losing for reasons such as unemployment, etc. It would be interesting to see how the age and causes of home loss correspond....
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Old 09-27-2008, 08:51 PM
 
Location: Boise, ID
1,356 posts, read 5,324,961 times
Reputation: 889
Quote:
Originally Posted by saganista View Post
I saw it the first time. There is only so much economic credibiltiy to be placed in the blog posting of a journalist with a BA in History.
Are you disputing that the Clinton Administration did not pursue and pressure mortgage companies to pursue "creative" financing? Since you are question his "economic credibility" should I take that to mean that your training is in economics? If not, then why is your credibility any greater than his? Greenspan's training is in economics yet he has little economic credibility with some. In fact, he has done more to get us to this economic mess than any other single person. I would think it is more important to analyze the strength of the argument but maybe that's just me.

Quote:
Originally Posted by saganista View Post
You leave out the context of the redlining legacy and the housing crunch of the early 1990's. You seize on use of the words "creative measures" in order to put on them a 2008 spin that didn't exist fifteen years ago. You ignore the fact that the relatively stringent conventional terms of the era precluded conventional financing to an economic class that had profitably participated in it over earlier decades, forcing them into the clutches of various predatory lending regimes. Your objective seems to be to recast history in order to shift blame away from those whose haphazard efforts led to the current crisis and onto to those whose measured efforts in an earlier era did not lead to any crisis at all.
It may or may not be true that those who were the intended beneficiaries of "creative" financing were in an economic class that could afford homes in previous generations. That in and of itself is no reason to change qualifying rules and your assertion really proves nothing.

Quote:
Originally Posted by saganista View Post
Actually, it seems those dangerous liberals Paulson and Bernanke are in that role. Congress, now in a bit of disarray after McCain's insistence on "helping out", is a relative latecomer to the matter.
The Bush administration shares plenty of blame for this mess, as I pointed out in my first post. Equality of opportunity is a conservative principle. Equality of result is a liberal principle. To the extent that the Bush administration has pursued the equality of result policies of the Clinton administration they were following liberal principles.

Quote:
Originally Posted by saganista View Post
Right. What's the Sarah Palin Plan? What's your plan? The shame here is that none of the principal actors were bold enough to insist a year or more ago that as free-flowing credit is an on-going essential to the performance of every modern economy, getting assets that could not be marked to market off the books of major credit market players was the primary objective. Oh, we could maybe buy some of them. Well, we could perhaps issue some guarantees. What if we swapped some of them for Treasury securities? Too much talk and not enough show. And every day since, the problem has gotten worse and worse. Ready to talk about CDS's yet? That was all that took AIG down...part of the price for having waited around too long. But at least The Surge is working, I guess...
How do you know I was not referring to Obama when I said experience in politics is overrated? Congress has a history of identifying problems that may or may not exist and then proposing "fixes" that don't really fix anything (or made matters worse) and then coming back and saying that the problem is we didn't spend enough on the fix. I am not alone in being cynical when politicians come out and say that doing nothing will be catastrophic. Sometimes they might be right and maybe they are this time but they really have very little credibility with many of us. Going back to your first comment, how many of them have training in economics and thus the credibility with you about the direction we should head?

Quote:
Originally Posted by saganista View Post
We already had one mild recession that wasn't necessary, and we currently have a second more than mild one that has led us all to wonder what the odds of global economic collapse by the end of next month might be. Market correction? Markets are perfectly capable of settling into equilibria that impose disastrous social consequences, destroying the lives and life's work of hundreds of millions. Markets just don't care. From recent press reports, apparently some Republicans don't either.

How wise was the "invisible hand" in 1797, 1807, 1819, 1837, 1857, 1873, 1893, 1907, 1918, or 1929? The hand has no intelligence, and it has no morality. It is up to actual people to provide those.

Smith advocated neither a nightwatchman nor a laissez-faire economy. He deeply distrusted the business class. Whom do you suppose he would intend to stand guard against their various machinations today?
You are taking my comments out-of-context. I recognize that there are problems with a pure free market economy. There are also huge problems with a centralized economy. I pointed out that Smith believed in some government regulation. He believed that government had a role in ensuring competition.

The beauty of the invisible hand is that it sets prices and directs production much more efficiently than a group of people ever could. I would say that the goal of moderating recessions might be attainable. The goal of eliminating them is not. The economy is just too complex. But then my formal training is in history so what do I know?

The American economy, historically speaking, is the greatest economy that the world has ever seen. It has done more to reduce poverty and suffering worldwide than any economy ever. What has been the key to it success? The free market coupled with modest government oversight. Centralized economies like those in Eastern Europe, Cuba, and China have shown that the American-style free market is vastly superior. In fact, the recent growth of the middle-class in China is attributable to the adoption of some limited free market principles.

Quote:
Originally Posted by saganista View Post
Reckless as in borrowing money when interest rates are low? As in purchasing rated securities that come with an implied government guaranty? And how much shielding is really too much when it is all that stands between you and losing your job, your home, your medical care, and all your retirement assets? Except for Social Security of course...you'd still have that.
Yes, reckless as in borrowing money when interest rates are low. Too many people borrowed money they could not afford to pay back. Yes, the guaranty from the government of loans that people could not afford. (Now we are back to the "creative" financing of the Clinton era.) As I mentioned the Federal Government, the Federal Reserve, the mortgagees, and the banks share plenty of blame in this.

I can't give you an firm answer about how much shielding is too much. I would never expect government to bail me out or set policy based on poor decisions that I make.

Last edited by Niners fan; 09-27-2008 at 09:09 PM.. Reason: clarification
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Old 09-27-2008, 09:28 PM
 
Location: The Netherlands
8,567 posts, read 14,516,394 times
Reputation: 1573
Originally Posted by aus10
Quote:
How many cycles do we have to go through before people see that the economy always, always, corrects itself through one means or another and that somewhere in the future things were going to go bad.
I disagree.
People correct themselves and not the economy.
Believing that the economy will correct humanity is saying that humans are reasonable beings who are never affected by irrational fear (or any other emotion).
Unfortunately this is not the case.
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Old 09-27-2008, 09:39 PM
 
Location: Here and there, you decide.
11,576 posts, read 22,673,604 times
Reputation: 3882
i still don't understand the bailout.. the govt is going to give 700billion to mismanaged companies and they will still be mismanaged. its all about the greed.

take the money, help those who are being foreclosed upon, however, you cant leave the current good payers in the dark.. write down the loans to what the house is now worth... and lock all of the arms at their current rate... however, if you earn 30k a year, and are in a 300k house, this has to change... look at the loans and credit again!

just my 2 cents!
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Old 09-27-2008, 09:46 PM
 
Location: The Netherlands
8,567 posts, read 14,516,394 times
Reputation: 1573
Originally Posted by airics
Quote:
i still don't understand the bailout.. the govt is going to give 700billion to mismanaged companies and they will still be mismanaged. its all about the greed.
I don't think it is about greed, it is more about being convinced that there is no other alternative.
The exact same way that junkies believe that they can't live without their drug-induced high; that if they can't get high life has become valueless.
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