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dola, look at it from another way. Would it have been better for consumer confidence to have an aggressive ground-attack from day 1 in Iraq that had 8000 casualties, but an end to the war in 2 years? Or, the 6-7 year war with slightly fewer casualties but guys still fighting it years later and seeing it on the news everyday?
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It doesn't work that with the economy. Mostly because people actually have power with the economy and a big "offensive" could cause ordinary people to start to panic and make things worse.
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Here's another analogy. Let's say you drive to work downtown and get hit with a $200 speeding ticket. You go to traffic school newxt weekend, pay the fine and move on. It sucks, but next month you are probably OK and moving on with your life. Now, instead, let's say that every working day for the next 4 weeks you get hit with a $10 parking ticket - no matter where you park downtown. Now, the damage is the same (200 vs 10*20), but you are probably much more afraid to go downtown and park next month in the second instance. You can make similar parallels with investing. If we have a one-day 400 point hit - and then back to a gain/loss situation, it's much easier on consumer confidence than if you had 40 straight days of losses. |
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Only if you think the news media is going to give 5 years of below average news the same coverage as 2 years of bad news ;). The news media doesn't like the stories that don't lend itself to alarmism, such as foreclosure spread over 5 years. They'd prefer to raise the alarm over it happening all at once. For example, how much do we really hear about the moderate growth the last few years? Most people seem to think the US was in a recession for far, far longer than it actually was (about 2 quarters in 2001/02, IIRC). |
Arles: I get what you're saying, but it would only really apply if we were near the end of the problem. We're not. Mortgage resets escalate dramatically over the next 18 to 24 months. The problems today are really only the beginning. And the problems for the big guys are worse than you think. When big banks start freezing access to accounts it's a really big deal. Also, a couple of big mortage companies are near bankruptcy already. Seeing foriegn banks write off billions is also a bad sign.
A lot of this problem can't be fixed now, prices are too inflated to expect to get a full return in the short term. However, big finance is scared to death and don't be surprised if this bailout plan is only the first of many. |
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We won't even really attempt to sell to mortgage companies anymore. Just too much of a chance they either
A. Lay off all their employees polluting their risk pool B. Go belly up instantly sticking us with their liability |
just wanted to point out that much of the fedspeak, Congressional trumpeting, and campaigning the last few weeks has said exactly what I and the other people that have proclaimed the same things have said. Boiled down, systemic fraud from top to bottom in the industry, from Brokerages to appraisals. Now I can admit when I am wrong, for example, much to my surprise, the Bush Surge in Iraq either directly or indirectly has been a success (more positives than negatives)....I look forward to when you all on the opposite side of the fence can open your minds to the empirical evidence and say, "I am (was) wrong."
Not a threadjack regarding the surge so let's stay on topic :) |
I didn't read every post...but wasn't the whole argument that everyone on both sides, including the "systemic fraud from top to bottom in the industry, from Brokerages to appraisals" as well as the homebuyer who didn't do his/her homework deserved to share blame equally? Did you expect Congress to come out and say "John Taxpayer is to blame for the mess he got himself into?"
Basically, who argued that the mortgage lenders were saints? |
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there is an insinuation, perhaps I read too much into it, i dont know, that the homebuyer's knew exactly what they were doing AND the group that didn't deserves exactly what they get. That pretty much covers the entire buyer's side as being culpable, each one in that they get the shared effect of what is going on. However, from what all of the experts, the last 2 weeks have said, is that MANY of these people WERE taken advantage of and preyed upon and DO, in fact, deserve help. The brokers, appraisers, realtors, lenders, underwriters, speculators, together share the great majority of the responsibility for what is going on and if I said otherwise I take that back. They deserve the bulk of the blame on a macro and micro level and deserve to share the bulk of the effects as opposed to the individual who was victimized. by being against helping those in need due to the current situation you are, IMO, placing ALL of the blame on the individual because they are the one's who will suffer the harshest effects. The Brokerage companies and their big wigs will be fine in the long run but the individual who got taken will not be. I think we just went full circle in this thread. :) |
Washington Mutual was just sued by Baltimore and the Mayor said that it's just the first.
The Attorney General of NY is looking into widespread fraud. And you wanna know who really really really made the most out of this? Quote:
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I've heard about this. Maybe banks like Goldman Sachs will have to par back those billions of dollars of bonuses they've paid out the last few years.
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"The loans were made to people who did not have any documents to verify their income or other verification for key requirements normally applied to mortgage borrowers," he said. "Many of the lenders made large amounts of loans, so that the exception swallowed the rule, or became the rule."
If that didn't give a borrower a red flag, I don't know what to say. People with bad financial sense deserve bad credit. That the way the system works. They'll lose their house, be back in an apartment they should have been in all along, and future lenders will have warnings about their lack of credit-worthiness. All is right with the world. |
The way I read that, they're more concerned with the next stage after the initial loan: the packaging of the loans into securities to diffuse the risk. The concern is whether the risk of default on these specific loans was properly disclosed in the packaged investment vehicle.
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....all the way to the top.
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So the post before shows that the fraudulent thoughts went all the way to the top....now you see it went all the way to the bottom too.
The tip of the iceberg http://money.cnn.com/2008/06/19/real...ex.htm?cnn=yes |
Today's WSJ has a front page article on the trial of some Bear Stearns honchos and their emails which show them telling each other that the investments were junk but that they were recommending them to their clients anyway. Good stuff.
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It takes a while but sometimes, if it's not to do with equities, I end up being right.
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I hope the criminals are prosecuted, and that restitution is ordered. Though this wouldn't change my position on any government bail-out.
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There should be no government bail-out. Buying a house is just like any other investment.
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I guess instead of redebating the same thing to this point you can just go back to page 1.
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Your back must be sore from all the self patting. :devil: |
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Nobody disagreed with you about the lenders/brokers being crooked. So we're all right. Hire a lawyer before you enter into a major financial transaction. If you can't afford the lawyer, you can't afford the house. |
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It's a good thing these guys turn out to be incredibly stupid. |
unfortunately it wont help the people who've lived in their homes for 50 years only to be swindled into a crappy Heloc and now have lost just about everything.
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not everyone is as smart as everyone else, unfortunately Wall Street preyed on Main Street and, as Ive stated in this thread, I think the Government should keep that from happening. |
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Seriously. Between this and Enron it really boggles the mind sometimes. |
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Do you feel this away about other "criminal losses", like theft caused by the victim's negligence? I'd think there would be $$ available in criminal restitution as well as potential civil lawsuits from entities that have the resources to pay up. |
To: [email protected]
From: ITAdmin Subject: Job Security I love my job. -----Original Message----- To: Exec 1 From : Exec 2 Subject: RE: RE: Should we screw people? Sounds good, I won't say a word. No one will know. We are genius!! -----Original Message----- To: Exec 2 From: Exec 1 Subject: RE: Should we screw people? Yes. As much and often as possible. Keep it on the down low. -----Original Message----- To: Exec 1 From : Exec 2 Subject: Should we screw people? So? Should we? |
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I had a long night and am exhausted but I'm confused by the first question. |
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I won't be offended if you nap instead of answering the question..... What's novel to me is this idea that because some third party is at fault for your financial loss, the government should help out. Clearly borrowers made mistake. But it seems like you're saying that IF someone else (the lender/broker) acted criminally, than the government should help out the borrower. I'm wonder if you feel this way just about mortgages, or if the government should pay back others who are criminally deprived somehow. Like if I leave my door unlocked, and someone comes in and takes my stuff. |
Well, I think that when a federally regulated group breaks the regulations or it is admitted that the regulations failed or weren't enforced it changes the dynamic. This especially goes when it becomes racketeering wherein the lender is in kahoots with the appraiser whose in kahoots with the underwriter, etc.
I am absolutely not saying to help the speculators but those that were honestly duped, which it is actually quite easy to find out by looking at their paperwork, underwriting standards, appraisals that we're done, etc. should be helped. what help means, I dont know, but they deserve to be helped. Im sure there have been other events similar to this in our past and will likely happen in our future but when the Government is shouldering the blame and admitting it and asking for more regulation during a Republican admin (where generally theyre for less gov't.) I'd say that theyre likely right and should help. |
I lost $80 on Amway. Damn illegal pyramid scheme. The government needs to pay me back!
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They promised me I wouldn't have to work after I got 200 people underneath me!
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We are so far on opposite sides of this we'll never agree, but I'm curious about the regulations aspect. There is no regulation that says I cant lend money to someone with a 400 Beacon, nor is there a regulation that governs values and appraisals. Furthermore judging the validity of an appraisal in a purely speculative market retro-spectively, is damn near impossible. No matter soon Obama will save us all by taxing the big bad businesses, thus sparking the worst inflation since the Reaganomics days.... And we'll keeep hand outs alive to all the poor uneducated PHDs....and mean while old men will sit around hardwaree stores and wonder why China is kicking our collective asses. We ALL need to man up, grow up, and get a fucking clue.... |
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That's what happens when you take LOTS of equity out of your home and don't understand the terms you are signing up to. No market is safe, you take risk anytime you make an investment or if you take money out of your house. |
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KIM, Obama has said to be leaning towards cutting the corporate taxes while increasing the income tax on those making over $250K/yr. So Im not sure if you didnt hear that or not. |
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Yes, and it will be all Obama's fault. Even if he doesn't win the election. Particularly since we aren't already experiencing a lot of inflation and signs of more :rolleyes: SI |
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:D SI |
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No then it will be bush's fault for making Obama lose.....Gee whiz dont you know anything about politics :p |
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Taxing success is not the answer. Remember, Obama wants to tax you in other ways (that McCain should pounce on, I think). They key word Obama uses is "Income". However, he wants to: -Increase SS taxes. -Increase Capital Gains tax to an insane rate (I think that CGT is a very important tax system for creating businesses, spurring investments, and creating jobs). This impacts everyone. From retirement accounts, houses, investments, savings, ect. -His spending plans are out-of-control. He blasts the GOP on spending, but he's doing the same thing (his health care proposal scares me in what the cost will be in 10-15 years) I just don't see how you can raise taxes (and ones that are geared towards investments) in this economy. We need to cut spending, not increase spending and taxes. I'm no fan of either, but I can't behind Obama for a lot of reasons. |
The right has not been able to curb spending and has done nothing but push though tax cut after tax cut pushing our deficit to incredible levels that even Buffet and Greenspan think is the biggest threat to our country. Voting for the status quo is not an option, IMO. Someone who can go back to fiscal responsibility is a good thing AND support of "Pay go" and understand that the health care system, as it is now, is broken. Too many people are one sickness away from destitute....but that's not the point of this thread, there's another one for that.
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I can agree with you on the first part. However, the Democrats aren't going to tackle the deficit either. Both parties are both full of themselves, creating class/social/political divisions as usual. Just frustrating to watch. |
Well the last Democrat in office did a fairly good job with the budget so Im not sure where the historical assumption is, but again, probably for another thread.
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Quoting Obama's website for specifics: Quote:
Seems reasonable. I have no idea why SS payroll taxes were capped at $102,000 in the first place anyways. Speaking as someone who will be directly affected by this, I support it. Quote:
Hey look! A tax cut. :D Quote:
If by "insane" you mean "roughly in line with where they were from 1986 to 2000". Specifically: Quote:
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You probably wouldn't be able to get behind McCain either, except that he's hardly spoken of any specifics on finance and/or economics, so it's hard to tell, quantitatively, how bad he'd be for the economy. |
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I'm on board, as long as that logic is applied to every business as well. I'm not signing onto the idea that banks can be bailed out because they entangle themselves together to the point that they would fall down like dominoes if allowed to experience real market forces. Let's not have one rule for big business and another for individuals. One rule for all. Either bailouts are provided to all, or to no entity. How will these banks learn to keep themselves free and clear of dependence on each other if they know they will be bailed out? It just encourages them to continue the bad behavior that created this situation. They don't extend that same protection to people in a subdivision, where they will all lose equity in their homes if other homes are foreclosed. That's a domino effect as well. |
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No one is talking bailout. The terms of the Housing Rescue and Foreclosure Preventing Act would only cover primary residences, so speculators and investors are on their own. To take advantage of the foreclosure prevention measures, you're going to have to be willing to split the profit with the government. To my mind, this is exactly the type of assistance government should provide -- in the S&L debacle, we simply took the hit and charged the government. Now, the government is getting an equity stake so if you keep your house and sell it for a profit later, the taxpayers get their money back. You can't beat that. |
We've already bailed out the banks, but it was done on the sly. The Treasury now holds billions of dollars of crap mortgages as collateral for loans to the banking industry. Not only did we bail them out, we did it through fiat of the Federal Reserve.
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http://www.washingtonpost.com/wp-dyn...062401389.html
Credit Suisse, a large investment bank heavily invested in mortgage-backed securities, proposed allowing hundreds of thousands of homeowners to refinance their mortgages with lower-cost government-insured loans, relieving financial institutions of the troubled debt. After the bank proposed this to Congress in January, it became known as the "Credit Suisse plan" among congressional staffers and lobbyists. It later formed the basis of housing provisions in both the House and Senate. Bank of America, which is acquiring Countrywide Financial, the country's largest mortgage lender, followed with a similar and more detailed proposal, principal negotiators on the legislation said. In approaching congressional aides, the lobbyists suggested that banks take less than full payment for the distressed loans on their books. But the measures would allow financial institutions to get cash out of foreclosed properties that would otherwise sit on their books as dead weight. Since the new loans would be guaranteed by the Federal Housing Administration (FHA), taxpayers would ultimately pay for defaults. The Congressional Budget Office projected that this could cost $1.7 billon over five years. So, even when a bill is marketed as helping the little guy, the individual, it is really only out there because big business wants it to be? Nice system we have here. |
Gah, what f***ing bullshit!
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So I am guessing this is not a good thing.
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