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Mutz, you're a little off the trolly on that one. What is going on with Fannie, Freddie, etc... is not a bailout or hand out or any giveaway of any kind. If anything, the government is taking advantage of the mismanagement of these companies and using the monitary strength of the USA to profit from these disasters.
The cause of the failures is excess leveraging. That is, borrowing too much as part of the business model and having too little reserve capital. It is a business model that always worked for banks when real estate valuations kept going up, but wont work at all when it is going down.
The trigger was a change in the so called fair value rule concerning FAS 157 that came about as part of the internationalization of the markets. In years prior, it was the entry price of the mortgage contract that set the value of the paper. That paper, along with thousands of others were to become the underlying assets of a bank for all kinds of accounting purposes. The new rules stipulate valueing the paper on a mark to market basis. In other words, the entry price and whether or not the mortgage holder was making payments on time, didn't matter as much as what the current market value is. In a bad market, it spells disaster for banks with 30 to 1, loan to deposit ratios.
The government is getting the mortgages, most of which are still performing, all of which are backed by hard assets, for less than 20 cents on the dollar in some cases. They will hold them until the market improves and sell them at a profit for the taxpayers. It is not without risk. What if the economy never improves? How much of the toxic waste real estate is worth less than 20% of the loan value. These are unknowns. But, they will do all they can to make sure that they get their money back plus much more. As it plays out, the gov't deficit may turn into a surplus AGAIN.
The last surplus had some to do with the bailout of the S&L industry through the use of The Resolution Trust Corporation.
In short, what happens is that mortgage assets held by failed banks and others are nationalized. In the end, the taxpayer makes out like a bandit.
I can't say if it should but as an american how can he do that and then help out third world contries? Firt we need to help the ones in our own homes before we help others don't you think
Location: By the sea, by the sea, by the beautiful sea
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Quote:
Originally Posted by rusty78
I agree with abolishing subsidies to oil companies...and to farmers for not growing crops...but I also think we should charge the oil bearing countries the same price for a bushel of wheat that they charge for a barrel of wheat...let's see how they like oil for breakfast - lunch and dinner....
Not only that, I think the cost of visas for students from OPEC countries should be measured in LARGE volumes of oil, or let them stay home.
should be limited,but in order for that to happen there has to be jobs/employment..and every one cant get a job or the job they want...
idont want to make this an illegal immigration issue but they benefit from welfare too and are most likely not to receiveit in their home countries or anything remotely close to it
That would be a great idea - let's see where the country goes and what happens when you abolish any type of safety net for people.
IT ALREADY IS LIMITED TO 5 YEARS!! AND IT ALREADY IS WORKFAIR!! Since it's obvious that this thread is geared towards mothers with children, I suggest that the people posting on this thread educate themselves a little bit on the federal and state legislation that surrounds state welfare to mothers/ families with children and the persons on welfare themselves. As a person that works in Employment Services trying to help people obtain and maintain employment in order to get off welfare, in my experience there are as many working families that receive welfare as those that aren't working (and that the majority of people really want to work and get off of welfare). But how do you expect a single mom (or even married couple) with two, three, or four children to support a family on $6.50, or $8.00, or even $12.00/hr? Let's start looking at the state of our jobs economy, the wages being paid by employers in our country, and all of the jobs that have left the country to go overseas before we start pointing fingers at families that can't fully support themselves or keep up with inflation. I think we should also take a strong look at both our education systems (effectiveness in teaching people skills sufficient to get livable wage jobs) and healthcare and rehabilitation systems (rather than help people with illness/ addiction issues, we put them in jail - very expensive to the taxpayer - without offering the help that they need to become free from addiction).
And of the persons that aren't working, there are strict and severe time limits/ sanctions for persons (they basically get 'cut off' in the next month) that do not turn in documentation of daily job search, volunteering, going to school (basic education - welfare doesn't look fondly on postsecondary education), or work activities - and if they aren't able to do this daily, then they have to turn in documentation that they (or the children they care for) are ill/ incapacitated and how long this will last, and this information has to be verified/ confirmed by medical professionals. And if people on welfare are doing everything they need to be doing and turning in all of their documentation of activities geared to help them get livable wage jobs - they still face very strict and short time limits on how long they can do this within certain frames of time without actually becoming employed in some form. The welfare system is extremely punitive to persons that aren't working, even if they are doing productive "core activities". And it should be pretty common knowledge that people are completely cut off after reaching 5 years on family welfare (during the course of their lifetimes) unless they qualify for a working extension (meaning they are working but aren't making enough to afford to live) or have some really serious/ documented issues (mental illness, disability, basic skills deficient, etc.).
The only thing able-bodied persons without kids are eligible to get is 3 months of food stamps (usually around $100 - 150/mo. in MN), then it cuts off and they aren't eligible to receive it for another 3 years.
And to whomever said that 50% of state budgets go to welfare, I would really like to see which state you are talking about and some actual sources to confirm that, the welfare systems in this country are usually the leanest of the budgets - there is much more WASTE in other areas of state and federal funding (although none come even close to questionable spending in the War on Iraq), than you'll find in any social welfare program. And to the persons talking about undocumented immigrants capitalizing on the welfare system - my experience has been that most are too paranoid to even try to do so.
maybe I am, but, according to george's news conference yesterday, the government is going to basically own these institutions and manage them until they get back on their feet, or, until the U.S, economy does. I agree about the borrowing too much, but it seems like there's a great deal of bad paper floating around, in other words, lending institutions handed out money to make people homeowners and such, who really, honestly couldn't afford it. as an insurance company, I don't understand AIG's pre-bankruptcy claim, or their losses. what losses? from claimants, or, bad investments?
Quote:
Originally Posted by Bull Winkus
Mutz, you're a little off the trolly on that one. What is going on with Fannie, Freddie, etc... is not a bailout or hand out or any giveaway of any kind. If anything, the government is taking advantage of the mismanagement of these companies and using the monitary strength of the USA to profit from these disasters.
The cause of the failures is excess leveraging. That is, borrowing too much as part of the business model and having too little reserve capital. It is a business model that always worked for banks when real estate valuations kept going up, but wont work at all when it is going down.
The trigger was a change in the so called fair value rule concerning FAS 157 that came about as part of the internationalization of the markets. In years prior, it was the entry price of the mortgage contract that set the value of the paper. That paper, along with thousands of others were to become the underlying assets of a bank for all kinds of accounting purposes. The new rules stipulate valueing the paper on a mark to market basis. In other words, the entry price and whether or not the mortgage holder was making payments on time, didn't matter as much as what the current market value is. In a bad market, it spells disaster for banks with 30 to 1, loan to deposit ratios.
The government is getting the mortgages, most of which are still performing, all of which are backed by hard assets, for less than 20 cents on the dollar in some cases. They will hold them until the market improves and sell them at a profit for the taxpayers. It is not without risk. What if the economy never improves? How much of the toxic waste real estate is worth less than 20% of the loan value. These are unknowns. But, they will do all they can to make sure that they get their money back plus much more. As it plays out, the gov't deficit may turn into a surplus AGAIN.
The last surplus had some to do with the bailout of the S&L industry through the use of The Resolution Trust Corporation.
In short, what happens is that mortgage assets held by failed banks and others are nationalized. In the end, the taxpayer makes out like a bandit.
I don't think it should be abolished but I do think it should be a requirement that at the very least, you should be seeking/interviewing for jobs. If you sit on your bootie all day collecting welfare then you shouldn't get it. If you are working and need welfare to subsidize your cost of living, i can see how that's "fair"
People automatically associate Blacks and Lationos with welfare, I'm not sure why.
But look it up, the majority of people that use it isn't what you think!
Check it out, Investigate..
Poor People.
I don't know who you are responding to but it looks like it's about par:
White 38.8%
Black 37.2
Hispanic 17.8
Asian 2.8
Other 3.4
I have no idea how reputable the numbers are or from what year but here is my reference: Welfare Stat
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