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Why not just send 6k to every household earning under 250k and let the corporations fend for themselves?
A bottom-up bailout would be the ultimate deregulation. Let US families decide where to spend the bailout money. Some would invest in stocks- great deals to be found, others could avoid foreclosure and renegotiate their mortgages. Some could pay off a car or credit cards. Some would buy gas, food or health care. Some would increase philanthropic donations.
What's the dif whether it's trickle down or percolate up? The people know best where assistance is needed. Let the people decide and cut the oversight dollars that current legislation would require.
Bailout the backbone of this country- our households- and let us direct the funds as needed.
When you have a toothache, you need specific, targeted intervention (e.g., removing the compromised tooth). All the generalized relief in the world (e.g., take two Tylenol every four hours) is never going to get at the source of your problem.
Otherwise, this idea sounds like simple greed. As long as you GIVE ME $6K, then I'm okay with a $700 billion program that will actually cost $700 billion even though it doesn't address the source of the problem. If you don't GIVE ME $6K, then I'm against a $700 billion program that won't actually cost anywhere near $700 billion even though it does address the source of the problem.
i thought that this was a good response to the sky is falling mentality offered by one stock market analyst:
Why should ‘main street’ hand over $10,000 per household, to speculators, who then lend it to banks, who then lend ‘main street’s own moneyback to them while charging interest? You must be insane.
Credit markets will shrink, but they won’t dry up, just credit based on imaginary stuff like derivatives will. Farmer co-ops, credit unions and other institutions will be doing just fine… and so will main street. People like you however, will probably get turfed due to less greedy people paying subscriptions to pour over your ‘analysis’. By the way, I suppose you’ve never gone short of stocks or have a highly leveraged market posiiton do you? Self interest is easy to spot.
i thought that this was a good response to the sky is falling mentality offered by one stock market analyst:
Why should ‘main street’ hand over $10,000 per household, to speculators, who then lend it to banks, who then lend ‘main street’s own moneyback to them while charging interest? You must be insane.
Households aren't handing over anything but an authority to acquire assets. The reason that needs to be done is that those assets (and unfortunatley more like them) are on the verge of bringing the flow of credit to a halt. You may not like the word "credit". Maybe it has some sort of moral overtones for you. So review your own lifestyle and see how often it depends on credit. Do you think the grocery store paid cash up front for all that stuff on their shelves? How about payroll? Where does that come from? Everywhere you are and whatever you are doing, you are utilizing credit. It is what makes your world go, and if the supply of it is halted, your world will suddenly be a very different place.
Quote:
Originally Posted by floridasandy
Credit markets will shrink, but they won’t dry up, just credit based on imaginary stuff like derivatives will. Farmer co-ops, credit unions and other institutions will be doing just fine… and so will main street.
No, they won't. If the worst should come to pass, and it could, everyone will be hit and hit hard. You simply don't see the problem...just as you don't see the tree roots working their way into your drainage system until the day the toilet stops up.
Quote:
Originally Posted by floridasandy
People like you however, will probably get turfed due to less greedy people paying subscriptions to pour over your ‘analysis’. By the way, I suppose you’ve never gone short of stocks or have a highly leveraged market posiiton do you? Self interest is easy to spot.
I suspect that you have not read to Forum Sticky concerning such comments, all of which, just by the way, are leaps to false conclusions.
The problem is foreclosures. .. Stop the foreclosures, restructure loans that can be into fixed interest rates with longer terms and you stop the bleeding..
Then.. go about repairing the damage.
Otherwise your putting blood into something that's just going to keep bleeding out.
Yes, we need to stop the bleeding, but if the patient is going into cardiac arrest, we will need to deal with that first. Once an at least relatively normal sinus rhythm has been restored, we can get back to dealing with those damaged arteries...
The problem is foreclosures. .. Stop the foreclosures, restructure loans that can be into fixed interest rates with longer terms and you stop the bleeding..
The problem isn't foreclosures, it's people who have mortgages they cannot afford.
Lots of people bought into ARMs because they couldn't afford the higher rates offered by traditional mortgages.
These people are going to lose their homes, because they spent more than they could afford. The only solution that makes any sense is to let the foreclosures happen and hopefully someone else buys the property.
Restructure the loans? You're just putting off the financial crisis for another couple of years.
Give homeowners some money to pay the mortgage? Again, you're only pushing the problem into the future.
Force banks to write off part of the mortgage? Sounds good, except now you've got even more losses.
All of these proposals also ignore the responsible homeowners who saved money, read their loan documents, and understood what they were buying. Why not offer them a bailout? Why not give them a free refinance?
I say let the market sort itself out. Holding companies who bought bad securities without due diligence can go belly up. Homeowners who took the risk of a huge mortgage by betting that the housing market would continue to grow can suffer foreclosure and bad credit.
Risk is a required part of any benefit. I don't see any reason to give money to people who gambled and lost.
The problem isn't foreclosures, it's people who have mortgages they cannot afford.
Lots of people bought into ARMs because they couldn't afford the higher rates offered by traditional mortgages.
And there are lots of people who bought a house that COULD afford a house at a "normal" or market level interest rate.
I am one of those ARM holders.. for me, my ordeal is over.. I am waiting to close on my short sale and am movign on. I've already lost the money I put in and down on the house. But I had a 6.95% starting interest rate, which was WELL above what the best rates offered were at the time. What I couldn't affrod was the 3% adjustment... I won't get into it all again about why I had an ARM etc. etc.. it's old news by now..
BUt the point is.. if they would have just fixed it at the 6.95% and maybe expanded the 30 years beyond 30 to make up some of the difference, it would have worked, I would still be paying my mortgage.
I'm sure there are a lot of people out there that the same thing could have happened for them, but just didn't because the lenders were being stubborn.
These people are going to lose their homes, because they spent more than they could afford. The only solution that makes any sense is to let the foreclosures happen and hopefully someone else buys the property.
Again..I didn't spend more than I could afford (my mortage, btw was $3300/month for astarter home on LI NY in a modest neighborhood). The product I purchased with was a bad product. It became unaffordable when the interest on it spiked
Restructure the loans? You're just putting off the financial crisis for another couple of years.
How is restructuring into a payment that IS affordable putting off the ineveitable. If they have been paying it for the past 2 or 3 years, then they could make payments.. Probably at a little higher than the initial interest. Extend beyond a 30 year period to make up the difference etc. It won't work for all, but it would work for many.
Give homeowners some money to pay the mortgage? Again, you're only pushing the problem into the future.
Homeowners NEVER asked for this. They only asked for restructuring. Wall street is the one asking for a handout of money from the feds.
Force banks to write off part of the mortgage? Sounds good, except now you've got even more losses.
MOre losses ? Not really. They stand to loose more if they foreclose. They'll have losses with write downs, no doubt.. but the write downs will not be as severe as having a house sitting there with taxes the bank is responsible for paying, maintenance of the houses.. etc.. not to mention continually pulling down the market. Write downs are not ideal , but it's far better than the alternative.
All of these proposals also ignore the responsible homeowners who saved money, read their loan documents, and understood what they were buying. Why not offer them a bailout? Why not give them a free refinance?
First.. the assumption that those in this mess are Irresponsible is just plain ridiculous and wrong. I happen to be a very responsible person who pays all their debts on times etc. As a matter of fact, before I had my home I didn't have ANY open lines of credit after paying off all my cards from my late teens early 20's that I went nuts on.. when I was NOT irresponsible. I did the responsible thing and took care of it and swore off credit cards.. only to have it bit me in the ass!
Secondly.. because if foreclosures are not dealt with, YOU the "responsible" homeowner will feel the pain regardless. .. so do you really want to bite off your nose to spite your face. What are the homeowners getting anyway.. they still have a mortgage payment to make.. yeah.. probably at good rates .. the same rates YOU got, but they will also be paying that for say 10 mmore years than you if it's extended! So really.. would those homeowners really be better off than you? NO..
This isn't about what someone else is getting that you're not.. this is about preventing a diasaster...this is about stemming foreclosures so that YOU the "responsible" homeowner doesn't loose their job when the market tanks.
I say let the market sort itself out. Holding companies who bought bad securities without due diligence can go belly up. Homeowners who took the risk of a huge mortgage by betting that the housing market would continue to grow can suffer foreclosure and bad credit.
Risk is a required part of any benefit. I don't see any reason to give money to people who gambled and lost.
When the risk spreads beyond the individual homeowner and the lender they made the agreement with then you have a problem that needs to be fixed.
And in my opinion .. Wall street is the biggest blame holder in this mess. Why? Because the individual may have been gambling with their own financial health or making a decision that would and should affect only themselves, .. but Wall Street was gambling with the economy as a whole.. Homeowners weren't getting "Rich" they were buying a place to live.. Wall Street was all about greed and glutony! If they would have started working out their own problems before it reached this point, we all wouldn't be in this mess.
The problem is foreclosures. .. Stop the foreclosures,
As a percentage - there are not that many foreclosures.
The media tries to paint a picture that all home loans are in default. Simply not true.
Somewhere around 95% of home loans are current -
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