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Old 07-28-2008, 04:18 PM
 
16,092 posts, read 37,222,760 times
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I believe lying on your application is a federal crime.
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Old 07-28-2008, 05:04 PM
 
2,197 posts, read 6,812,297 times
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But they'll never enforce it.

I wish they would deny any sort of bailout for anybody who lied on any of their mortgage applications. All they'd have to do is check tax returns for the years the mortgage and/or refis were originated. Borrowers generally have to sign a form giving lenders and their assignees that right. That would be a lot more palatable-- denying assistance to those who committed fraud.
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Old 07-28-2008, 11:41 PM
 
Location: Seattle, WA
209 posts, read 548,861 times
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Quote:
Originally Posted by Humanoid View Post
Increase in credit and the money supply generally cause inflation, government spending may or may not cause inflation. It depends on the nature of the spending.
Yes, the increase in money supply (usually through some sort of government spending or fractional reserve banking) causes inflation. The more money you have competing for a finite set of goods will cause prices to increase unless production has been increased or the population growths to take up needs of the additional money supply.
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Old 07-29-2008, 02:03 AM
 
40 posts, read 197,838 times
Reputation: 29
The government is simply taking the bag from the banks et al and handing it to all of us to hold. Make no mistake about it - the bag will not magically disappear.
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Old 07-29-2008, 10:50 AM
 
76 posts, read 210,675 times
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I wonder if people on Extreme Home Makeover will qualify like these people that are losing there once in a lifetime start at a new life and squander it away.

Stupid is as stupid does (broken link)
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Old 07-30-2008, 09:23 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,297,745 times
Reputation: 958
Quote:
Originally Posted by Humanoid View Post
Right thats your prediction. But what does that have to do with my post?

The OP seems to misunderstand the housing bill. Firstly the bill predicts to help around 400k households with an aggregate loan amount of $68k. The $300 billion figure is the max. Furthermore, the government is not forking out $300 billion it is merely guaranteeing loans with an aggregate of at most $300 billion. The government is only on the hook for any loses which should be relatively minor as the bill requires that the lender write down the mortgage to 90% of the appraised value. The bill also requires the borrowers to pay fees which will help offset any costs. It is estimated to cost taxpayers $1.7 billion over 5 years. Of course this estimate is overly rosy, but the cost will be no where near $300 billion.

Anyhow, the housing bill is not going to fuel inflation.
Out of curiosity, have you read all 694 pages of H.R. 3221? I haven't either, but have been trying to get through it as well as educating myself on other's interpretations of certain aspects (as some of the verbiage is somewhat vague and does not address details of said aspects).

I do know this, the bill creates a Fed backstop for FNMA / FHLMC in the amount of $800b, and raises the national debt ceiling to $10.615 trillion dollars. How does this not devalue the dollar? Keep in mind I am no econ major so if there is a legitimate explanation as to how we can increase national debt while maintaing dollar valuation I'm all ears.

The mortgage modification provisions are a VERY small part of this bill. This bill also addresses the GSE backstop, a first time home buyer tax credit equal to $7500 or 10% of the sales price, whichever is less, the elimination of seller funded down payment assistance effectively taking 400,000 buyers a year out of the market, there is a provision for all credit card transactions to be reported to the IRS, this bill promotes the socialization of real estate by not only urging but subsidizing local and state governments to purchase REO properties to rehab and manage as investments, this bill permanently raises the GSE conforming loan amount and FHA max loan amount to 115% of the area median price with a max loan amount of $625,000 in high cost areas, this bill institutes a new FHA max floor of $271,000, and this bill raises the FHA down payment requirements from 3% to 3.5%.

Keep in mind that H.R. 3221 is almost identical to the Dodd-Shelby bill, which of course was basically written by BofA execs. So that being said, who do you think that this bill really benefits? No matter how you look at it, it is corporate bailout. Not only that but look further into China's central bank involvement with FNMA and FHLMC, and how they are demanding par payback on the MBS' they hold even though they have been earning interest based on risk over the last few years.

Please keep in mind that I am not saying that letting the entire system collapse is the answer either. I personally don't think that this bill was the answer though. Too many provisions buried deep in those pages that do not have any relevance to the matter of saving homes.
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Old 07-31-2008, 01:49 AM
 
Location: Los Angeles Area
3,306 posts, read 3,552,147 times
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Quote:
Out of curiosity, have you read all 694 pages of H.R. 3221?
No, of course not.

Quote:
How does this not devalue the dollar?
When people talk about "devaluing the dollar" its usually unclear what they mean. Either you are talking about inflation or how the dollar is trading against other currencies. The bill isn't inflationary because everything is going to replace credit/money that has been destroyed. The dollar could very well weaken against some other currencies if our national debt goes up, but that assumes all things are equal on the other end. In reality things are going to get worse in Europe etc too, so the increased debt may have no effect on the dollar.

Quote:
in those pages that do not have any relevance to the matter of saving homes.
Because the bill isn't really about saving homes its about saving the credit/bond markets. This isn't about saving peoples houses, who cares? The vast majority of foreclosures are deserved.

Quote:
Yes, the increase in money supply (usually through some sort of government spending or fractional reserve banking) causes inflation.
Here is the problem, the money supply has not been increasing more than normal. In fact it has been weakening lately. So much for that.
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Old 07-31-2008, 06:47 AM
 
2,197 posts, read 6,812,297 times
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It's going to reward egregious behavior, it's going to raise the taxpayer's burden and it's going to get the government deeper in our pockets and give it the power to meddle and interfere even more with free market processess and personal privacy. That's three strikes-- and I only needed one.

But I'd be willing to bet there's a lot more objectionable powers buried in there.
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Old 07-31-2008, 09:00 PM
 
Location: Seattle, WA
209 posts, read 548,861 times
Reputation: 87
Quote:
Originally Posted by Humanoid View Post
No, of course not.

When people talk about "devaluing the dollar" its usually unclear what they mean. Either you are talking about inflation or how the dollar is trading against other currencies. The bill isn't inflationary because everything is going to replace credit/money that has been destroyed. The dollar could very well weaken against some other currencies if our national debt goes up, but that assumes all things are equal on the other end. In reality things are going to get worse in Europe etc too, so the increased debt may have no effect on the dollar.
This is addressing your comment "The bill isn't inflationary because everything is going to replace credit/money that has been destroyed."

First off you don't destroy credit or money. But what this is doing is keeping that excessive credit in the market which will prop up overvalued assets and by effect it will prop up our over-valued dollar. This is because we have lived off of other peoples savings for the last 37 years. We seem to confuse real money that is made off of making real things compared to interest earned in the form of a double-book entry on a bank ledger. Interest and Real Money are not the same thing but we treat them as such so that we are in a position where we keep spending beyond our means and borrowing to pay our bills. This is inflationary and what this bill is doing is giving our government the power to monetize (read: socialize) the risk/debt at the same time when we privatize the profits.

Quote:
Originally Posted by Humanoid View Post
Here is the problem, the money supply has not been increasing more than normal. In fact it has been weakening lately. So much for that.
Well being that we don't publish M3 I believe you know just as much as I do as a fact. But if you look at other numbers that used to correlate with the M3 figure (I will have a definition of M0-M3 so you know what this means) you can see that we are growing the money supply at a rate that we have never seen in this country. Estimates are 12-18% per annum. And in case you didn't know how we create money it is through our treasuries that are basically a bond that we also pay interest on so they will hold our paper.


M0-3 Definition (Wiki):


  • M0: Physical currency. A measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. M0 is the most liquid measure of the money supply. It only includes cash or assets that could quickly be converted into currency.[6]
  • M1: M0 + demand deposits, which are checking accounts. This is used as a measurement for economists trying to quantify the amount of money in circulation. The M1 is a very liquid measure of the money supply, as it contains cash and assets that can quickly be converted to currency.[7]
  • M2: M1 + time deposits, savings deposits, and non-institutional money-market funds. M2 is a broader classification of money than M1. Economists use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions.[8] M2 is a key economic indicator used to forecast inflation.[9]
  • M3: M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets. This is the broadest measure of money and is used by economists to estimate the entire supply of money within an economy.[10]

Closing Note: Humanoid, I actually like debating with you on this so hopefully you do as well but I do believe you might be confused a bit on some of the workings of our complex system and I am still getting a grasp and trying to not listen to the noise and separate the wheat from the chaff in a sense. Please, if you feel I am mistaking, please take some time to correct me and point me in the right direction for reading material that I can check out that supports your position. Thanks
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Old 08-01-2008, 12:52 AM
 
Location: Los Angeles Area
3,306 posts, read 3,552,147 times
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Quote:
First off you don't destroy credit or money.
Why not? What exactly happens for example to the uninsured deposits of a failed bank? If the money is not destroyed then what? What do you call it when lenders across the country pull back their HELOCS? Okay don't call it "destroyed" call it something else, but the effect is the same.


Quote:
Humanoid, I actually like debating with you on this so hopefully you do as well but I do believe you might be confused a bit on some of the workings of our complex system
Blah blah. I will repeat, the money supply is weakening. All measures (and even estimates of M3) show weakening in the money supply over the last few months. This is not what you'd expect if the environment was becoming highly inflationary. Copying and pasting form wikipedia is all keen and all, but the recent data can be found at the fed:

FRB: H.6 Release--Money Stock and Debt Measures--July 31, 2008
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