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Old 02-18-2009, 04:13 PM
 
2,197 posts, read 6,592,971 times
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Quote:
Originally Posted by DvlsAdvc8 View Post
Uhm... duh? Have you not been listening?
Blah blah blah, more money, yada yada yada, more money, eeny meeny miney moe, how much higher can we go, blah blah blah spend spend spend yada yada yada pork pork pork duh duh duh bailout bailout bailout yawn yawn yawn zzzzzzzzzzzzzz...
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Old 02-19-2009, 09:07 AM
 
50 posts, read 183,878 times
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Quote:
Originally Posted by DvlsAdvc8 View Post
Your aggressive and sarcastic tone is regrettable and unecessary to this discussion, but if that's the way you want to go so be it.

Fearmongering? Wrong. Look at history. This isn't the first recession born out of easy credit. You can look at the Great Depression, or the recession following the panic of 1873. Times change, but the economics do not. That recession lasted 5 1/2 YEARS because of Laissez Faire policies you would promote.



Keeping your eyes closed to history will doom you to repeat it. Hoover thought exactly as you... only to turn to government spending as stimulus as he was being kicked out the door.




No, apparently you don't see. This isn't about responsibility. If history shows us anything it is that people are irrational. Those irrational people buy up the price of a company's stock over the value of its fundementals every day. Then they panic and turn around and sell fundementally sound companies. This is EVERY day. People have an irrational need to own a home. However, those irrational needs don't create bubbles alone. EASY CREDIT enabled many people to buy homes who shouldn't have, and many more to buy more home than they should... again, because of irrational notions of home ownership that are encouraged in our culture (HENCE MY MENTIONING BUSH'S "OWNERSHIP SOCIETY" INITIATIVE). Human nature is what it is, its a fool's quest to think that anything is going to change it.

Regardless of the cause of the problem, the best solution is that which makes the recession as short lived as possible. Control the foolish the way they should have been controlled by restricting the supply of credit with proper lending standards and tightening the money supply in boom times.



Slight successes? Please... so something other than MASSIVE GOVERNMENT SPENDING GOT THE U.S. OUT OF THE GREAT DEPRESSION? WW2 was a MASSIVE government stimulus! http://www.princeton.edu/~pkrugman/debtwar.png At its peak, the public (government) debt reached 120% of GDP!!

I am not choosing the theory that benefits responsible people and screws over the rest. The best option is that which ends the recession soonest. Your position is tantamount to shooting yourself in the foot in order to avoid giving your foolish neighbor a bandaid. The foolish people aren't the only ones who will suffer as the economy continues its slide. That seems to be the part you don't get. Foreclosures will beget foreclosures as home prices continue to fall - continuing to unnerve the general public who will turn to saving as they always do in unsettling times. That fall in private consumption will result in layoffs. Some of those layoffs will result in additional foreclosures, and continued fall in private consumption (unemployment benefits blunt this somewhat, and you can thank Democrats for that, but the over all impact is still negative).

I don't have a crystal ball. I have a history book.

You would throw the baby out with the bathwater. You would hurt yourself so long as it doesn't help the fools. That's brilliant right there.



Do you really want to understand this or make absurdly simplisitic sarcastic comments?

Stabilizing housing prices is the first step to economic recovery. As long as foreclosures continue, prices will continue to fall prompting more foreclosures... people will (irrationally?) continue to save, private enterprise will continue to layoff workers, and beget additional foreclosures. THAT is the cycle we are in now. Anything an everything that breaks that cycle is advisable. Helping distressed homeowners is but one arrow in the quiver... and I'd argue, a lesser one. Hence the reason "cram down" is not in the current stimulus package. There are complications with it that are far more important than moralistic, self-defeating individualist ramblings on about "not helping the fools".



Is the philosophy stupid, or is stupid he who does not understand the philosophy? See, even if you just gave some unemployed guy $100 for doing absolutely nothing, that would be better than doing absolutely nothing. That unemployed guy has what is called in economics "a high propensity to consume". See, he's going to spend every dime of that $100 because he's unemployed and undergoing hardship. Meanwhile, you're sitting at home worried about your job and saving because of the uncertain times. Guess what? His spending puts the overall economy on the road to recovery while your hard earned saving only compounds the problem. His spending is demand for goods... goods supplied by private enterprise. Those enterprises don't hire until demand exists! (chicken and the egg anyone?) So his spending contributes to hiring in the private sector - which means more jobs, which means more private consumption, which means improved tax revenues. Get it now? Economic recovery. Without government to provide the spark, recessions are left to LINGER. Over inflated markets are prone to over correct. Meanwhile, a ton of resources go un-utilized... productivity that is simply lost.

So yeah, in a manner of speaking, just stupidly throwing government money (deficit spending) to the masses in anyway is actually better than doing nothing at all. But we're not stupid, so we target those most likely to spend it or otherwise help the recovery begin... the unemployed, those about to lose their homes, etc etc. Anyone who will do something other than hunker down and save. Prudent people, and governments, do their saving in times of plenty when savings rates are high and debt expensive. Then they rely on that saving to secure them through hard times - taking advantage of the sweet deals available (not to mention savings rates start to suck), and low cost of debt... and to boot, they are contributing to economic revival.



Are you four years old?

The stimulus money is my money my friend. I pay my taxes thanks.



Well, being that "ownership society" is Bush's name for HIS initiative... yeah, Clinton had nothing to do with it. Did you think I plucked the term out of thin air?

"We're creating... an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property." - President George W. Bush, October 2004. [2]




lol, but you're going to learn me right? Considering you've added absolutely nothing of economic relevance to this discussion.

Yes, I know what laissez faire means. It is a hands off approach to economic matters and markets. Most people learn it in either civics or history class. Hoover was a staunch believer in the "invisible hand" and that markets left alone are most efficient.

I've yet to hear what would do, so I can only assume that you're in the "nothing" crowd rubbing elbows with Herbert Hoover.



Did you not read my post? I was even citing past credit-driven bubbles. Republicans are the current "do nothing" party, and we're coming off 8 years of Republican rule that could have prevented this non-sense by tightening the money supply.



That is a plainly ignorant comment. Lower income subprime borrows probably favor democrats, but in case you haven't noticed, bright red republicans who tried to buy too much house are also foreclosing left and right... or did you think those 500K+ McMansions in foreclosure were really the ghetto welfare democrats? (Perhaps that's part of the problem with the modern republican party - their members are mostly homogenous - so they assume the same of democrats; just an FYI - the democratic party is much more diverse).

As for the money supply, EVERYONE has a problem when money is to readily available! Uh, dur, that's kinda how we got where we are today in case you haven't noticed. Easy credit IS an expansion of the money supply. Low rates expands the money supply. Economics isn't really your thing is it? See here's the deal: when everyone can borrow money cheap, it is incentive to borrow. That's completely besides the borrowers ability to repay... they may all be perfectly qualified. The problem lies in the fact that all those borrowers who decided to buy because of the incentive of cheap debt means higher demand for whatever good they are buying - in our case - homes. If builders can't supply homes at the rate they are demanded, that means home prices rise. Now see, people in low incomes figure "hey, I can afford a house" and got suckered into dumb loans. See, they have a low income - so its fairly safe to assume we're not talking about Rocket Scientists and Financial Planners who are going to understand the ins and out of mortgage lending. And hey, you've got a realtor sitting there with you telling you how home prices haven't fallen since the great depression... and last year, prices rose by 20%. Do you really blame that person for buying? Honestly? Perhaps they reasonably thought they'd be able to refinance as their house appreciates - as so many others had done before them.

Meanwhile, Danny Republican saw his house appreciating and decides to refinance - most likely putting a little in his pocket to boot so he can buy a new BMW.

In both cases, people took the amazing gains they saw in real estate, and tried to use it to boost their lifestyle. People are people... but it was a wealky regulated banking industry and cheap money that let them do it. The resulting overheated real estate market was inevitable... after all, who doesn't want a house when houses are appreciating at 20% per year?




You didn't burst anything. Clinton didn't start anything. Clinton's contribution to this mess was in his support of revisions to the Community Reinvestment Act which provided incentives for Banks to do business in underserved low income areas. Prior to the act, many lower income areas were completely unserved due to high rates of foreclosure without regard to individual credit worthiness. Research on the subject confirmed that denials of credit were based in greater part on geography than an individuals credit history. Thus, banks were encouraged to enter these markets and allowed to loosen lending standards for them. Subsequent studies during the Bush administration found an insignificantly higher incidence of default among these buyers, though it still remained a marginally profitable market) and even Alan Greenspan (R) came out in support of continued expansion of this market. This was begain Bush's push for the "ownership society" in which home lending was viewed as a win win situation for all.

The CRA had specific underserved areas in which it applied (mostly inner cities). Thus, blaming CRA and Clinton is really a red herrring - probably something you heard on Savage Nation, Rush Limbaugh or Bill O'Reilly... each of whome only rile you up for ratings and tell you what you want to hear. Its nonsense to blame Clinton and CRA for the lax lending among moderate to high income borrowers - that's all greedy bankers, borrowers blinded by home appreciation, and an attitude of lax regulation on the part of the Bush Administration (who was focusing his attention on wasting money in Iraq).

I'm eagerly awaiting your next O'Reilly sound byte. But I'll offer an olive branch if you'd actually like to discuss alternatives to the Keynesian approach I've laid out. Because, right now, all you've laid out is "do nothing" - and though you probably didn't read it, I showed what history thinks of nothing.


you sonned that guy, WOW!

great post
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Old 02-19-2009, 09:22 AM
 
48,519 posts, read 81,030,761 times
Reputation: 17978
What do you want to bet that housing orices contiue to fall regaurdlesss. I also would bet that the rate will continue to climb in the next year as this progrma only effects a limited number and it willtake that l0ng for the underwriters to actually rewrite thwese loans. Even then many ;just as in thew refis that where done 9in the last two quarters ;will agin fall niot foreclusure.+Wish it would but this is not going to solved housing as it will go to its bottom regaudlesss.In the end it may turn out to be more cherry picling who to discount than anyhting else.
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Old 02-19-2009, 09:23 PM
 
1,134 posts, read 2,469,695 times
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Quote:
Originally Posted by texdav View Post
What do you want to bet that housing orices contiue to fall regaurdlesss. I also would bet that the rate will continue to climb in the next year as this progrma only effects a limited number and it willtake that l0ng for the underwriters to actually rewrite thwese loans. Even then many ;just as in thew refis that where done 9in the last two quarters ;will agin fall niot foreclusure.+Wish it would but this is not going to solved housing as it will go to its bottom regaudlesss.In the end it may turn out to be more cherry picling who to discount than anyhting else.
Excellent response, and that may very well be true.

On the stimulus side of things - the bill is too small (I'm betting next year we'll be talking about stimulus round 2).

On the housing side of things, it may very well be true that the initiative is not large enough to put the brakes on home value declines; it could even be that *nothing* can - and if that is indeed the case, then all it will do is slow the fall in comparison to allowing prices to free fall on their own, which will prolong the recession. I'm 100% behind the stimulus; I'm not as confident about the housing plan, but at least they're doing something, they're up front about their plan and its a varied approach that helps more than just the wealthy turds on Wall Street that couldn't see past their bonuses.

There is no silver bullet. I'm just happy as a pig in sh*t we have a President with the intellect to consult with experts on all sides, understand and weigh options - versus the vegetable that goes with his gut on such matters that we used to have. I'm very upset that Republicans would use this mess as an opportunity for political grandstanding after presiding over the second largest expansion of the debt in American history. Shut up and fix the problem.

Obama might be wrong, but he's not out misleading the public to get achieve his aims like the previous admin did in Iraq (Terrorists? WMD? Nah, Saddam is just an "evil doer"). You can also bet that we won't see any premature "mission accomplished" photo ops of Obama on Wall Street either.

Sorry for the rant... I just watched O'Reilly. lol
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Old 02-20-2009, 11:12 AM
 
Location: Houston, TX
2,374 posts, read 5,238,930 times
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I'm guessing that this housing bill will be exactly like the last one passed. We are told it'll help millions of homeowners, but when push comes to shove only a couple hundred will actually qualify. I think the government is just prolonging the recession with all this bailout money.

Think of it like a child, the kid is constantly getting into trouble, going broke and such, but there is mommy and daddy with their checkbook and connections in hand to "help" their child. Not once does the child actually learn from their mistakes, but they keep making the same ones over and over because their have never been any consequences.

It's the same when we keep giving money to people who made bad decisions. They will always expect the government aka mommy to step in and save them. Now my husband and I made the wrong decision when we were told to buy our house or get out (belonged to my step-father). If we had been smart we would have moved out, but we didn't have the money for the 1st last and deposit on an apartment, so we bought the stupid house. We are making our payments on time and I don't expect the government to come to my aid at all.
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Old 02-20-2009, 09:29 PM
 
212 posts, read 739,781 times
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Foolish people who took mortgages they could not afford should not be bailed, let them go into foreclosure and move back into an apt. For years I paid my mortgage on time, so I deserve to be rewarded .
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Old 02-21-2009, 09:47 AM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,098,079 times
Reputation: 952
Quote:
Originally Posted by molochai2580 View Post
I'm guessing that this housing bill will be exactly like the last one passed. We are told it'll help millions of homeowners, but when push comes to shove only a couple hundred will actually qualify. I think the government is just prolonging the recession with all this bailout money.

Think of it like a child, the kid is constantly getting into trouble, going broke and such, but there is mommy and daddy with their checkbook and connections in hand to "help" their child. Not once does the child actually learn from their mistakes, but they keep making the same ones over and over because their have never been any consequences.

It's the same when we keep giving money to people who made bad decisions. They will always expect the government aka mommy to step in and save them. Now my husband and I made the wrong decision when we were told to buy our house or get out (belonged to my step-father). If we had been smart we would have moved out, but we didn't have the money for the 1st last and deposit on an apartment, so we bought the stupid house. We are making our payments on time and I don't expect the government to come to my aid at all.
Wow. Excellent analogy. + rep for you.

And you are correct. The details are starting to come out regarding the new housing rescue plan (max 105% loan to value). It will help out about as many people that Hope for Homeowners and FHASecure helped out. I believe H4H has actually helped 25 people of the 400,000 it was supposed to help. I don't have the numbers on FHASecure, but I know that it fell far short of the mark.

And to those that keep posting about the greater good and whatnot, the fact remains that modded loans have a 50%+ re-default rate. That is not help, it is a band aid on a bullet hole. It does nothing but prolong the pain, both for the homeowner and the investors that see their holdings lose value based on the uncertainty that we currently face. Not to mention the turmoil in the markets, particularly in the bond markets, that we would see once BK judges have the ability to write down principal on these mortgages.

If you truly want to pay for this bailout twice with not only your tax dollars, but higher mortgage rates down the line then be my guest. I would rather see those that had no business owning a home go back to renting. I would rather see those on Wall Street that are responsible for creating the programs that allowed these renters to become "buyers" out of a job at least, if not in jail for fraud on a massive scale (this goes not only for the investment banks but also for those at the SEC that didn't bother to do their job, and for those at Moody's and S&P that chose not to do their job either).
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Old 02-21-2009, 11:28 AM
 
48,519 posts, read 81,030,761 times
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Listening to Obama and then his administrtion spokesmen what this will involve changes from speech to speech. I think just like the treasury plan they have no plan but just speak off the cuff.First they are not going to save people who were irresponsible now they will some. I suspect they will manage this the same way that congress did Fannie Mae and Mac. The democrats did not want to manage that at all and barney frank said they could just bail Fannie out if they failed which is what has happened. This administration reminds me of the new orleans evacuation plan in Katrina; they had one but they never actually made any arrangements to carry it out and now they can't even manage the federal dollars they got after all this time.Its call incompetence and i have to say that Biden and hillary Clinton warned people in the nomination campaign.
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Old 02-21-2009, 11:39 AM
 
Location: Cedar City, Utah
4,285 posts, read 8,058,669 times
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Quote:
Originally Posted by captnemo View Post
Foolish people who took mortgages they could not afford should not be bailed, let them go into foreclosure and move back into an apt. For years I paid my mortgage on time, so I deserve to be rewarded .
Simply put....but so true. Never have been late on a house payment. Didn't live beyond means. Could afford a larger house payment, but chose to buy way under what we qualified for. Where is the reward in that.
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Old 02-23-2009, 08:32 AM
 
1,134 posts, read 2,469,695 times
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A lot of people who are in trouble now lived within their means... a lot didn't.

Still, the most efficient solution to get the economy returned to growth is that which stabilizes housing prices.

Quote:
Originally Posted by http://today.msnbc.msn.com/id/29306760/
“If you live in a home that’s near one that’s been foreclosed, your home value likely has dropped by about 9 percent, which for the average home is about $20,000,” Gibbs told reporters Friday.

According to the U.S. census, there were about 75 million owner-occupied homes at the end of 2008. By our math, that means that the $75 billion being spent to prevent foreclosures works out to about $1,000 per owner occupied home. Which means you’re spending $1,000 in taxes to head of the loss of $20,000 on the value of your house. These days, that doesn’t seem like such a bad investment.
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