i've missed ochona's comments for the last several months. it's always refreshing to see someone with whom i probably don't agree be so good at (almost?) convincing me. welcome back ochona!
I found this more appropriate to this discussion. 50 years ago these were charming midwestern neighborhoods with nice houses with a back and front yard. That was the dream. The goal. No one cared if they worked 9 hours in a factory. There was nothing "wrong" with that. They had neighborhood churches or temples were they got married and had their receptions. Not that simple for most today. Maybe our expectations are inflated and our fantasy is whats suffering.
[url=http://money.cnn.com/2007/11/12/real_estate/Cleveland_foreclosure_factors/index.htm?cnn=yes
]cleavland foreclosures[/url]
i'm actually really surprised at how little people seem to be mentioning pakistan lately. i don't mean the news, because it's on the front page of the times website, like, all the time.
but in passing, in conversation, etc.
here is a country (and i'm speaking in generalities here...about the government there, not the people...) to whom we have given over $10BILLION IN AID. that's a full 10% of their total GNP that we've given them. just handed over.
and their crazy-ass general is running the place like dick cheney wishes he could run america. rule by decree, marshall law, continual postponement of elections, flagrant jailing and abuses of the civil rights of his oppositions, denial of the right to congregate freely, etc etc etc.
china may own us economically...but pakistan and musharaff have gotten us down the ideological rabbit hole with no clear end in sight.
we are fucked there. a very high percentage of terrorist attacks around the globe have been linked to, from or through pakistan at one point. not necessarily the pakistanis, but a pervasive tolerance for guerilla camps and training sites. as well as the transfer of arms.
we want to help stop that sure, as do many other nations, so we prop up the one guy there who seems friendly to us...but this guy has got us by the balls. (and others too...considering that the aforementioned house of cards will come crashing down if the US economy falters really badly.)
CALGARY — History demonstrates that events that changed the course of human endeavours could have been forecast by a clear-minded analysis of the big picture.
Unfortunately, it's hard to focus on the big picture when we're distracted by disconnected snapshots.
Financial markets, for example, have been battered by the realization that investors couldn't trust the ratings assigned to structured debt securities. Looking back, the warning signs were clear: instant credit approvals on everything from second mortgages to cars to vacations; oversubscribed low-yield debt issues funding highly leveraged takeovers; financial engineering so extreme that investors couldn't discern who they were lending to or for what; and staggering Wall Street bonuses driving even more-extreme schemes.
But a much bigger financial earthquake is reversing the centuries-old dominance of Western-based global economic power. It's an earthquake set off by a combination of petrodollars and trade flows.
More and more of the West's oil supplies are coming from the Middle East and Russia. As oil gushes out of these countries, enormous amounts of petrodollars flow back to their national treasuries. The rise of oil prices to the $100-a-barrel range further accelerates this enormous West to East wealth transfer.
Economists will give you a long and arcane explanation, but the real answer is quite simple. Many of the dollars sent to pay for Middle Eastern oil and Chinese manufactured electronics return through purchases of Treasury bills and all kinds of assets - including the shares of U.S.-based companies and the very real estate that the country is built upon.
The Sheiks, Oligarchs and Indian entrepreneurs are certainly changing the game in global markets, but it's the unprecedented power of government-controlled wealth that is really sounding alarm bells in the U.S. and other Western countries. From Abu Dhabi to Qatar to China, governments are awash in cash. Investment Bankers estimate that the multitrillion-dollar sovereign wealth fund sector is growing by half a trillion dollars a year, while a lot of western countries sink deeper into debt. Few sovereign fund owners are democracies and some can't be considered friends of the West. This has fuelled concern that investment decisions are motivated more by geopolitical power versus normal market considerations. The continuing meltdown of the greenback means the sovereigns get even more for their money, thereby accelerating the process.
Bank of Canada Governor David Dodge recently spoke about the "insufficient transparency" of the sovereigns. U.S. officials have called for international reporting standards. Clay Lowery of the U.S Treasury points out that if the world's Sovereign funds bought all U.S. and European Treasury bond issues they would still have about a billion dollars left in the kitty.
The difference is that money flowing into America or "the west" is usualy bounced around and exits a little bit more valuable because of it's hich volume of transactions - added value theory, different than intrest. In some places in the east, not all by any means, a dollar in goes to building a giant toilet house and Vegas vacations for a sheik and his concubines to buy prada shoes. How much of this Abu Dahbi $ is going to multiply and benefit the "middle class" in those countries? Or China?
that article is so, so sad... what kind of unsympathetic, holier than thou, arrogant, ignorant and bitter bitch makes statements like "So, no. No bail-out, no assistance with my tax dollars. Not one red cent." saying in effect that shes happier having her tax dollars spent on blowing up iraqi's and bombing villages than helping the family down the street keep their house... unbelievable and pathetic
lletdown and gin, i guess you guys don't see how those greedy, uneducated, and now unaccountable borrowers are costing people like me and mdler thousands of dollars.
setting a precedence for bailing people out over the long run is not a good thing because it doesn't encourage intelligent investing, or personal responsibility. that said, it is important to be careful of the possibility of so many people going under that the entire ship sinks. i feel sorry for people who were duped into the whole subprime loan thing. it was bad decision making on their part, but i would wonder how much the lenders emphasized the up front advantages to subprime lending without going into the fine print. i think these are mostly working class people, judging from the little subprime loan advertisement on the net of the fat woman (and the green alien) dancing around, possibly easily taken advantage of in an area where they are in way over their heads. if they were an airline, they'd be getting aid. principle tells me they shouldn't be bailed out, but i'd be curious what is going to effect our economy more negatively, bailing these people out or not bailing them out. it is a difficult decision that should be judged impartially, not solely on how we "feel." personally i think the lenders deserve as much of the blame as the borrowers themselves. you shouldn't sell people on a loan that isn't sustainable. that's every bit as stupid as borrowing one.
Interest rates are lower on my savings. This costs me in interest I could have earned.
Inflation (by cheapening money) lowers the value of my money and decreses the value of "their" debt. Could be in the thousands, over time.
If bailouts are tax money, add some in for that.
Housing prices have been bid up. A house I want to buy has been bid up, say, 50-100 grand from where it should be from people with funny money buying houses.
Unresponsible borrowers are now getting pre-payment penalty-free fixed rate resets at lower rates than a less risky borrower's fixed rates. If I could get one of these 5% rates instead of a 6.375 or whatever, I'd save a couple of hundred dollars a month.
So the lady in the article had a 7% fixed-rate loan when she signed the papers. She has a 7% fixed-rate loan today, and she'll have a 7% fixed-rate loan tomorrow, regardless of what happens to anybody else's mortgage. Tell me again how she's being ripped off?
She reminds me of the people who paid $600 for an iPhone back in June, only to scream bloody murder because people were able to buy them for $200 cheaper in September. So somebody else ended up with a better deal than she did. Boo-fucking-hoo. Life isn't fair. Eat it, swallow it, deal with it.
She may be indirectly subsidizing the bailout (along with the rest of us), but much more of her tax money is directly subsidizing things that are far more evil and destructive. She apparently has no qualms about that.
From the article:
One of the biggest groups Countrywide targeted - 52,000 subprime hybrid ARM borrowers that it will offer refinanced loans - have good payment histories and low-risk profiles, according to the company.
They typically had credit problems in the past but, according to Doug Duncan, chief economist for the Mortgage Bakers Association, hybrid ARMs have traditionally been the right remedy.
ARMs work as credit-repair vehicles, enabling borrowers to rebuild credit by paying off loans for a couple of years at affordable rates. Many then qualify for prime, fixed-rate loans.
Despite the recent collapse of the subprime lending market, Bailey said, 70 percent of hybrid ARM borrowers still paid off their loans. "These loans take a beating as predatory but they saved [borrowers] millions."
So, these are the greedy, uneducated, irresponsible borrowers who are now supposedly getting a free ride?
About that supposed free ride:
Bailey said he understands their anger but said, "That's a situation where the greater sin is letting their homes go into foreclosure. You have a vacant home in the community and drive down the property values of neighbors."
According to Bailey, before these loans are approved, the lender's, the investor's and the community's interests must all be considered. If all those are advanced, then concessions will be made.
And, the program's not designed to be easy, according to Bruce Marks, chief executive of NACA. "It's an arduous process, a sacrifice," he said. "Borrowers have to change their lifestyles, tear up credit cards, lower car payments. We're putting people through hoops. Then, they have to document their spending and make payments on time for six months before the restructurings become permanent."
I agree with le bossman. While the bailouts may go against some people's ill-informed "just-pull-yerself-up-by-yer-bootstraps" ideology, the far greater evil would be allowing thousands of homes to go into foreclosure, thus sending the national economy into even more of a tailspin than it is now. And I agree that the loan sharks who conned some people into these loans need to be held accountable as well.
But of course, none of that really matters. Lesson #1 of being a conservative: It's all about me.
strawbeary, there's not a direct relationship between any of the things you cited and you losing money; there are countless other factors at play; so to specifically blame high risk borrowers for any money you personally "lost" is a bit of stretch (which isn't to say there might not be a bit of truth to what you are saying; it's just in a very roundabout way).
As a homeowner, I'm more in the unsympathetic and angry camp, I guess, although I do see that preventing thousands of foreclosures is overall better for the economy than the opposite.
But come on, what am I supposed to feel? I'm at 6.5% for 30 years and my own mortgage company, Countrywide, is giving people who "didn't understand" the paperwork a lower rate than they'll give me? I didn't understand how to buy a house either, so I bought some books and talked to a lot of people and figured it out. The constantly broke and exhausted me's attidute is: taxes are completely out of control, bring on fiscal conservatism, I've been living it since I was 14.
But again, the logical me's attitude is: I understand in the big picture the economy is better off not seeing an enormous, as opposed to huge, crash.
What pisses me off the most is that we're not seeing (IMO) a significant effort to seek punishment for subprime lenders, whose approach to getting people to sign on for a loan are among the most unethical, greed-driven stories I've ever heard.
Re the Daily Show et al: it's comforting to know somebody's got his eye on the ball and calls the goons in DC on their bads -- but it's wrong to think that this equates to "sombody's going to make this stop." I know -- I cheered every time ol' Molly Ivins would write another take-no-prisoners column -- but she died. Al Franken ? Cynthia Tucker ? Arriana Huffungton ? Mark Mumford ? Sure -- but they're just as vunerable as you and I are. Johnny Carson (my new Shrub look-alike) and Lon Chaney are still on the throne. . .
The cost of the present war of folly is slated to rise to $46,000 per typical household of 4 by 2017. One is reminded that the typical annual income of a family of 4 will be $68,000 by 2017. The economy'll will be fine. We just need to all enlist. The US will only have one industry... war.
I'm with you Strawbeary....and yes, i don't give a damn about the greater good of the economy.
Sure, there were con-artist mortgage brokers, but ultimately someone had to sign on the ARM, subprime, zero down, negative ammortization, voodo loans. It's their own damn fault for not informing themselves, as a responsible person should.
What would everyone say if their bank gave free money to customers that went to Vegas and spent a little beyond their means? Everyone would rase hell, because that was a stupid waste of money and shouldn't be everyone elses responsibility to bail them out. Countrywide is essentially doing that same thing...but since it's a mortage, and not the blackjack table, it's ok?!?!? C'mon.
I have a sneaking suspicion that those sympathetic of people in mortgage trouble are they themselves not mortgage holders.
i am a sympathetic mortgage holder. beary/aqua, i think you both are overestimating the reach of your tax dollars. any government sponsered bailout of the mortgage industry is a miniscule percentage of your overall tax burden. you could just as easily be complaining about spending on the war which is a real and substantial percentage.
subprime mortagages *may* have resulted in inflated real estate prices (it's too complex to attribute to one or two factors), but to have been hurt by that, that assumes you bought in the last three to five years, and you forget that there were an awful lot of people that profited greatly off of higher real estate values.
i would argue that the actions of the credit industry itself and the federal reserve were more to blame for a rise in inflation. generally though i think the assumptions you are making about subprime lending are far too simplistic to explain general trends in the markets and how they may have affected you personally.
I'm not here to complain about the use of my tax dollars. That's a different issue all together.
My beef is that nobody takes personal responsibility anymore. If mortgage brokers did something illegal, by all means prosecute. But if someone took out a stupid loan and ends up losing their house, well, that's what I call a stupid tax. Instead everyone is going on tv cying their woe is me line, and I'm supposed to feel sorry for them?
And don't think any kind of gov't bailout is for the poor homeowner whose ARM just reset. It's a giant massive corporate bailout to keep the banks from losing their asses. They could care less about the little guy. I hate corporate bail outs of any kind, be it Chrysler in the 80's, the airlines after 9/11, or the banks today.
As for inflation, I think my previous posts clearly state that I place the blame on the Federal Reserve. They are wholly at fault in my book.
i think we're largely on the same page, aquapura. i just consider the woes of subprime borrowers a moral issue rather than an economic one. we bleeding-heart, tax-and-spend liberals tend to be a bit more sympathetic towards the individual and less towards the industry.
i'm not taking either side here. i don't have the answer. on principle, i don't think they be bailed out, if you read my above post. but i think a strong economy needs to be founded on a strong tradition of business ethics. therein lies the premise of "the invisible hand" if it is going to be anything other than a retroactive phenomenon. the fact that the lenders, the ones who do the number crunching and understand the professional jargon, couldn't figure out that they were producing loan packages their borrowers could never pay off is just silly. the architectural drawings i have right here are covered in language which exempts me from liability if i do something wrong; that doesn't mean i don't have an obligation to my clients to deliver a quality product, or i don't take responsibility for my mistakes. good business is about building solid relationships with people, regardless of what the fine print says. the subprime market should've never existed in the first place, and it was invented by the lenders. if you aren't responsible enough to have solid credit, you shouldn't be owning a house.
i tried for 10 min to type a response to this thread that wouldn't be inflammatory and im unable to do it. some of you here need to get a heart and think outside you're four walls.
shoot i failed even at that
Okay, so the sub-prime borrowers don't get their bailout, and one or two banks "lose their asses" and close their doors. All of a sudden, your Citibank ATM card is nothing more than a worthless hunk of plastic in your wallet, and the money you thought you had in your checking account has evaporated into thin air. (Yeah, it's supposedly FDIC-insured... Just like how all those homes in Louisiana were insured.)
Once the news breaks that a major bank has collapsed, a full-scale financial panic erupts as people make a run on their own banks. More banks collapse, and thanks to all the banking mergers over the past decade or so, it only takes the failure of one or two huge banks to create a fiscal crisis that makes 1929 look like a minor correction.
But at least the neocons will be secure in the knowledge that those lazy, stupid, irresponsible sub-prime borrowers didn't get a helping hand.
I'd like to say there is no fiscal crisis. These defaults have taken no one by surprise, and the defaults are calculated in. The risk has been tranched and sold around the world for the last 5 or 6 years. There will be no run on banks because thats actually impossible today. The world will, to the bewilderment of architects, keep turning. Is the subprime dancing alien crisis bigger than bay of pigs, cuban missle, JFK assassination, Nixon impeachment, oil embargo, gas crisis, 1976-1980 stagflation, Savings and Loan implosion, Black Monday, Tech Wreck, 911 - see my point?
no doubt theres a realignment occuring - baby boomers exiting the workforce ( or are they?) yung families virtualy stagnent, adjusted wages down, weakening dollar - but these are shifts that happen every 30 years or so. Its more about census data than anything - i wouldnt get too worried. it will be rough but hardly a depression. Prob more like the late 70's with ultra high inflation, stagnent economy and high intrest rates again. Although I doubt they'll ever go to 15%-20% like then.
...right, combined with the new global market, the web, the wars. Never-ending wars means Pakistan, Iran, India and whoever else we decide to "change".
It's not a matter of heart, lletdown. I have things to protect. It's just business and common sense.
Please know that I too was "approved" for a mortgage for a $560,000 or something crazy, this based off my modest middle class salary. This is not subprime either - so you can take that word out of your arguments. It is so beyond the subprime market. Fortunately I was paying attention in 6th grade math and knew the offer was too good to be true. Like LB I didn't know how to buy a house either, so I took an economics class, studied finance and risk management, I researched A LOT and asked my life mentors questions. Maybe I should have just gave it the good ol' american try, "bought" the mcmansion, and now I could be crying help too. I put "bought" in quotes because I didn't put a down payment down.
Did you know the average american spends $1.22 for every dollar they make? I told this to someone the other day, and she nodded, smiled in agreement, said "that sounds like me", and appeared to be proud of it. Where is the accountabilty? The government doesn't set a very good example either.
I personally think it is a matter of 'heart' strawbeary... no offense intended but if you believe you're the only one with things to protect, or that your things to protect are any more important than anyone else's, then you are proving my point exactly.
As far as accountability goes... where is the accountability of a nation of 300million people to look after itself? Why are people so un willling to take any accountability for the state of the country we live in?
tens of millions of wreckless idiots went out and signed stupid mortgages, but its not my responsibility to help them? Is it your responsibility to help starving kids? the homeless? veterans?
i personally think its all part of the same line of thought... this is a self obsessed nation... everyone has problems, everyone has needs, everyone makes mistakes... leaving those that do to die is about as unproductive a solution as is possible. 'Social conscience' is not some dirty liberal term to make conservatives feel guilty... its a necessary part of any functioning society... i think our society owes much of its dysfunction to the painful lack of it.
A Perfect Storm
i've missed ochona's comments for the last several months. it's always refreshing to see someone with whom i probably don't agree be so good at (almost?) convincing me. welcome back ochona!
if my wife ate a lot of hummus i'd be concerned, not because of the LAPD, but ....
but because what?
i've posted enough pics of the terminator for you to know you don't need to be afraid
pizza! pizza!
that was inappropriate. also sameolddoctor, i am sorry about the retarded exchange we had last week. it was bad form.
I found this more appropriate to this discussion. 50 years ago these were charming midwestern neighborhoods with nice houses with a back and front yard. That was the dream. The goal. No one cared if they worked 9 hours in a factory. There was nothing "wrong" with that. They had neighborhood churches or temples were they got married and had their receptions. Not that simple for most today. Maybe our expectations are inflated and our fantasy is whats suffering.
[url=http://money.cnn.com/2007/11/12/real_estate/Cleveland_foreclosure_factors/index.htm?cnn=yes
]cleavland foreclosures[/url]
ep being normal is sooooooooo out of fashion.
i'm actually really surprised at how little people seem to be mentioning pakistan lately. i don't mean the news, because it's on the front page of the times website, like, all the time.
but in passing, in conversation, etc.
here is a country (and i'm speaking in generalities here...about the government there, not the people...) to whom we have given over $10BILLION IN AID. that's a full 10% of their total GNP that we've given them. just handed over.
and their crazy-ass general is running the place like dick cheney wishes he could run america. rule by decree, marshall law, continual postponement of elections, flagrant jailing and abuses of the civil rights of his oppositions, denial of the right to congregate freely, etc etc etc.
china may own us economically...but pakistan and musharaff have gotten us down the ideological rabbit hole with no clear end in sight.
we are fucked there. a very high percentage of terrorist attacks around the globe have been linked to, from or through pakistan at one point. not necessarily the pakistanis, but a pervasive tolerance for guerilla camps and training sites. as well as the transfer of arms.
we want to help stop that sure, as do many other nations, so we prop up the one guy there who seems friendly to us...but this guy has got us by the balls. (and others too...considering that the aforementioned house of cards will come crashing down if the US economy falters really badly.)
am i wrong here? am i taking crazy pillz?
aw shucks, i've missed this place...
the phrase "lie down with dogs, wake up with fleas" comes to mind
naww...i sleep with my dog all the time, and i don't have fleas. ;-)
CALGARY — History demonstrates that events that changed the course of human endeavours could have been forecast by a clear-minded analysis of the big picture.
Unfortunately, it's hard to focus on the big picture when we're distracted by disconnected snapshots.
Financial markets, for example, have been battered by the realization that investors couldn't trust the ratings assigned to structured debt securities. Looking back, the warning signs were clear: instant credit approvals on everything from second mortgages to cars to vacations; oversubscribed low-yield debt issues funding highly leveraged takeovers; financial engineering so extreme that investors couldn't discern who they were lending to or for what; and staggering Wall Street bonuses driving even more-extreme schemes.
But a much bigger financial earthquake is reversing the centuries-old dominance of Western-based global economic power. It's an earthquake set off by a combination of petrodollars and trade flows.
More and more of the West's oil supplies are coming from the Middle East and Russia. As oil gushes out of these countries, enormous amounts of petrodollars flow back to their national treasuries. The rise of oil prices to the $100-a-barrel range further accelerates this enormous West to East wealth transfer.
Economists will give you a long and arcane explanation, but the real answer is quite simple. Many of the dollars sent to pay for Middle Eastern oil and Chinese manufactured electronics return through purchases of Treasury bills and all kinds of assets - including the shares of U.S.-based companies and the very real estate that the country is built upon.
The Sheiks, Oligarchs and Indian entrepreneurs are certainly changing the game in global markets, but it's the unprecedented power of government-controlled wealth that is really sounding alarm bells in the U.S. and other Western countries. From Abu Dhabi to Qatar to China, governments are awash in cash. Investment Bankers estimate that the multitrillion-dollar sovereign wealth fund sector is growing by half a trillion dollars a year, while a lot of western countries sink deeper into debt. Few sovereign fund owners are democracies and some can't be considered friends of the West. This has fuelled concern that investment decisions are motivated more by geopolitical power versus normal market considerations. The continuing meltdown of the greenback means the sovereigns get even more for their money, thereby accelerating the process.
Bank of Canada Governor David Dodge recently spoke about the "insufficient transparency" of the sovereigns. U.S. officials have called for international reporting standards. Clay Lowery of the U.S Treasury points out that if the world's Sovereign funds bought all U.S. and European Treasury bond issues they would still have about a billion dollars left in the kitty.
The difference is that money flowing into America or "the west" is usualy bounced around and exits a little bit more valuable because of it's hich volume of transactions - added value theory, different than intrest. In some places in the east, not all by any means, a dollar in goes to building a giant toilet house and Vegas vacations for a sheik and his concubines to buy prada shoes. How much of this Abu Dahbi $ is going to multiply and benefit the "middle class" in those countries? Or China?
and people wonder why conservatism just won't die
"fiscal conservatism" - the old republican party before newt and the goon squad - big difference.
that article is so, so sad... what kind of unsympathetic, holier than thou, arrogant, ignorant and bitter bitch makes statements like "So, no. No bail-out, no assistance with my tax dollars. Not one red cent." saying in effect that shes happier having her tax dollars spent on blowing up iraqi's and bombing villages than helping the family down the street keep their house... unbelievable and pathetic
Agreed..... Cry me a fucking river, woman.
lletdownl
i agree with her 100%. Why should she foot the bill for someones stupidity?
lletdown and gin, i guess you guys don't see how those greedy, uneducated, and now unaccountable borrowers are costing people like me and mdler thousands of dollars.
a lot of you kids are beginning to sound like kunstler. & his "clusterfuck nation" blog...you just need a dollap of new urbanism.
personally, as i get older, i'm finding that my biggest concern is nosehair...damn, that stuff is relentless
setting a precedence for bailing people out over the long run is not a good thing because it doesn't encourage intelligent investing, or personal responsibility. that said, it is important to be careful of the possibility of so many people going under that the entire ship sinks. i feel sorry for people who were duped into the whole subprime loan thing. it was bad decision making on their part, but i would wonder how much the lenders emphasized the up front advantages to subprime lending without going into the fine print. i think these are mostly working class people, judging from the little subprime loan advertisement on the net of the fat woman (and the green alien) dancing around, possibly easily taken advantage of in an area where they are in way over their heads. if they were an airline, they'd be getting aid. principle tells me they shouldn't be bailed out, but i'd be curious what is going to effect our economy more negatively, bailing these people out or not bailing them out. it is a difficult decision that should be judged impartially, not solely on how we "feel." personally i think the lenders deserve as much of the blame as the borrowers themselves. you shouldn't sell people on a loan that isn't sustainable. that's every bit as stupid as borrowing one.
how are those people costing you and mdler thousands of dollars?
that should read "every bit as unsound..."
ja. I was hoping someone would ask.
Interest rates are lower on my savings. This costs me in interest I could have earned.
Inflation (by cheapening money) lowers the value of my money and decreses the value of "their" debt. Could be in the thousands, over time.
If bailouts are tax money, add some in for that.
Housing prices have been bid up. A house I want to buy has been bid up, say, 50-100 grand from where it should be from people with funny money buying houses.
Unresponsible borrowers are now getting pre-payment penalty-free fixed rate resets at lower rates than a less risky borrower's fixed rates. If I could get one of these 5% rates instead of a 6.375 or whatever, I'd save a couple of hundred dollars a month.
I'll add to the list as I think of more.
it's a bit of a stretch, but okay.
how is that a stretch?
So the lady in the article had a 7% fixed-rate loan when she signed the papers. She has a 7% fixed-rate loan today, and she'll have a 7% fixed-rate loan tomorrow, regardless of what happens to anybody else's mortgage. Tell me again how she's being ripped off?
She reminds me of the people who paid $600 for an iPhone back in June, only to scream bloody murder because people were able to buy them for $200 cheaper in September. So somebody else ended up with a better deal than she did. Boo-fucking-hoo. Life isn't fair. Eat it, swallow it, deal with it.
She may be indirectly subsidizing the bailout (along with the rest of us), but much more of her tax money is directly subsidizing things that are far more evil and destructive. She apparently has no qualms about that.
From the article:
One of the biggest groups Countrywide targeted - 52,000 subprime hybrid ARM borrowers that it will offer refinanced loans - have good payment histories and low-risk profiles, according to the company.
They typically had credit problems in the past but, according to Doug Duncan, chief economist for the Mortgage Bakers Association, hybrid ARMs have traditionally been the right remedy.
ARMs work as credit-repair vehicles, enabling borrowers to rebuild credit by paying off loans for a couple of years at affordable rates. Many then qualify for prime, fixed-rate loans.
Despite the recent collapse of the subprime lending market, Bailey said, 70 percent of hybrid ARM borrowers still paid off their loans. "These loans take a beating as predatory but they saved [borrowers] millions."
So, these are the greedy, uneducated, irresponsible borrowers who are now supposedly getting a free ride?
About that supposed free ride:
Bailey said he understands their anger but said, "That's a situation where the greater sin is letting their homes go into foreclosure. You have a vacant home in the community and drive down the property values of neighbors."
According to Bailey, before these loans are approved, the lender's, the investor's and the community's interests must all be considered. If all those are advanced, then concessions will be made.
And, the program's not designed to be easy, according to Bruce Marks, chief executive of NACA. "It's an arduous process, a sacrifice," he said. "Borrowers have to change their lifestyles, tear up credit cards, lower car payments. We're putting people through hoops. Then, they have to document their spending and make payments on time for six months before the restructurings become permanent."
I agree with le bossman. While the bailouts may go against some people's ill-informed "just-pull-yerself-up-by-yer-bootstraps" ideology, the far greater evil would be allowing thousands of homes to go into foreclosure, thus sending the national economy into even more of a tailspin than it is now. And I agree that the loan sharks who conned some people into these loans need to be held accountable as well.
But of course, none of that really matters. Lesson #1 of being a conservative: It's all about me.
strawbeary, there's not a direct relationship between any of the things you cited and you losing money; there are countless other factors at play; so to specifically blame high risk borrowers for any money you personally "lost" is a bit of stretch (which isn't to say there might not be a bit of truth to what you are saying; it's just in a very roundabout way).
As a homeowner, I'm more in the unsympathetic and angry camp, I guess, although I do see that preventing thousands of foreclosures is overall better for the economy than the opposite.
But come on, what am I supposed to feel? I'm at 6.5% for 30 years and my own mortgage company, Countrywide, is giving people who "didn't understand" the paperwork a lower rate than they'll give me? I didn't understand how to buy a house either, so I bought some books and talked to a lot of people and figured it out. The constantly broke and exhausted me's attidute is: taxes are completely out of control, bring on fiscal conservatism, I've been living it since I was 14.
But again, the logical me's attitude is: I understand in the big picture the economy is better off not seeing an enormous, as opposed to huge, crash.
What pisses me off the most is that we're not seeing (IMO) a significant effort to seek punishment for subprime lenders, whose approach to getting people to sign on for a loan are among the most unethical, greed-driven stories I've ever heard.
I don't agree that the best thing for the economy is to sustain the madness.
madness has always ruled in america....why the hell do you think we
wrestled our way from the British....stubborn bunch of blokes we be!
Re the Daily Show et al: it's comforting to know somebody's got his eye on the ball and calls the goons in DC on their bads -- but it's wrong to think that this equates to "sombody's going to make this stop." I know -- I cheered every time ol' Molly Ivins would write another take-no-prisoners column -- but she died. Al Franken ? Cynthia Tucker ? Arriana Huffungton ? Mark Mumford ? Sure -- but they're just as vunerable as you and I are. Johnny Carson (my new Shrub look-alike) and Lon Chaney are still on the throne. . .
[that's Arianna Huffington. . .]
nothing to worry about...
http://www.cnn.com/2007/POLITICS/11/13/hidden.war.costs/index.html
The cost of the present war of folly is slated to rise to $46,000 per typical household of 4 by 2017. One is reminded that the typical annual income of a family of 4 will be $68,000 by 2017. The economy'll will be fine. We just need to all enlist. The US will only have one industry... war.
I'm with you Strawbeary....and yes, i don't give a damn about the greater good of the economy.
Sure, there were con-artist mortgage brokers, but ultimately someone had to sign on the ARM, subprime, zero down, negative ammortization, voodo loans. It's their own damn fault for not informing themselves, as a responsible person should.
What would everyone say if their bank gave free money to customers that went to Vegas and spent a little beyond their means? Everyone would rase hell, because that was a stupid waste of money and shouldn't be everyone elses responsibility to bail them out. Countrywide is essentially doing that same thing...but since it's a mortage, and not the blackjack table, it's ok?!?!? C'mon.
I have a sneaking suspicion that those sympathetic of people in mortgage trouble are they themselves not mortgage holders.
i am a sympathetic mortgage holder. beary/aqua, i think you both are overestimating the reach of your tax dollars. any government sponsered bailout of the mortgage industry is a miniscule percentage of your overall tax burden. you could just as easily be complaining about spending on the war which is a real and substantial percentage.
subprime mortagages *may* have resulted in inflated real estate prices (it's too complex to attribute to one or two factors), but to have been hurt by that, that assumes you bought in the last three to five years, and you forget that there were an awful lot of people that profited greatly off of higher real estate values.
i would argue that the actions of the credit industry itself and the federal reserve were more to blame for a rise in inflation. generally though i think the assumptions you are making about subprime lending are far too simplistic to explain general trends in the markets and how they may have affected you personally.
I'm not here to complain about the use of my tax dollars. That's a different issue all together.
My beef is that nobody takes personal responsibility anymore. If mortgage brokers did something illegal, by all means prosecute. But if someone took out a stupid loan and ends up losing their house, well, that's what I call a stupid tax. Instead everyone is going on tv cying their woe is me line, and I'm supposed to feel sorry for them?
And don't think any kind of gov't bailout is for the poor homeowner whose ARM just reset. It's a giant massive corporate bailout to keep the banks from losing their asses. They could care less about the little guy. I hate corporate bail outs of any kind, be it Chrysler in the 80's, the airlines after 9/11, or the banks today.
As for inflation, I think my previous posts clearly state that I place the blame on the Federal Reserve. They are wholly at fault in my book.
i think we're largely on the same page, aquapura. i just consider the woes of subprime borrowers a moral issue rather than an economic one. we bleeding-heart, tax-and-spend liberals tend to be a bit more sympathetic towards the individual and less towards the industry.
i'm not taking either side here. i don't have the answer. on principle, i don't think they be bailed out, if you read my above post. but i think a strong economy needs to be founded on a strong tradition of business ethics. therein lies the premise of "the invisible hand" if it is going to be anything other than a retroactive phenomenon. the fact that the lenders, the ones who do the number crunching and understand the professional jargon, couldn't figure out that they were producing loan packages their borrowers could never pay off is just silly. the architectural drawings i have right here are covered in language which exempts me from liability if i do something wrong; that doesn't mean i don't have an obligation to my clients to deliver a quality product, or i don't take responsibility for my mistakes. good business is about building solid relationships with people, regardless of what the fine print says. the subprime market should've never existed in the first place, and it was invented by the lenders. if you aren't responsible enough to have solid credit, you shouldn't be owning a house.
how about any form of ethics. or integrity.
it's unfortunate prescott's mom didn't swallow.
i tried for 10 min to type a response to this thread that wouldn't be inflammatory and im unable to do it. some of you here need to get a heart and think outside you're four walls.
shoot i failed even at that
Okay, so the sub-prime borrowers don't get their bailout, and one or two banks "lose their asses" and close their doors. All of a sudden, your Citibank ATM card is nothing more than a worthless hunk of plastic in your wallet, and the money you thought you had in your checking account has evaporated into thin air. (Yeah, it's supposedly FDIC-insured... Just like how all those homes in Louisiana were insured.)
Once the news breaks that a major bank has collapsed, a full-scale financial panic erupts as people make a run on their own banks. More banks collapse, and thanks to all the banking mergers over the past decade or so, it only takes the failure of one or two huge banks to create a fiscal crisis that makes 1929 look like a minor correction.
But at least the neocons will be secure in the knowledge that those lazy, stupid, irresponsible sub-prime borrowers didn't get a helping hand.
I'd like to say there is no fiscal crisis. These defaults have taken no one by surprise, and the defaults are calculated in. The risk has been tranched and sold around the world for the last 5 or 6 years. There will be no run on banks because thats actually impossible today. The world will, to the bewilderment of architects, keep turning. Is the subprime dancing alien crisis bigger than bay of pigs, cuban missle, JFK assassination, Nixon impeachment, oil embargo, gas crisis, 1976-1980 stagflation, Savings and Loan implosion, Black Monday, Tech Wreck, 911 - see my point?
ep - I AM saying it is bigger than that.
ja says "i would argue that the actions of the credit industry itself and the federal reserve were more to blame for a rise in inflation."
I agree.
no doubt theres a realignment occuring - baby boomers exiting the workforce ( or are they?) yung families virtualy stagnent, adjusted wages down, weakening dollar - but these are shifts that happen every 30 years or so. Its more about census data than anything - i wouldnt get too worried. it will be rough but hardly a depression. Prob more like the late 70's with ultra high inflation, stagnent economy and high intrest rates again. Although I doubt they'll ever go to 15%-20% like then.
...right, combined with the new global market, the web, the wars. Never-ending wars means Pakistan, Iran, India and whoever else we decide to "change".
It's not a matter of heart, lletdown. I have things to protect. It's just business and common sense.
Please know that I too was "approved" for a mortgage for a $560,000 or something crazy, this based off my modest middle class salary. This is not subprime either - so you can take that word out of your arguments. It is so beyond the subprime market. Fortunately I was paying attention in 6th grade math and knew the offer was too good to be true. Like LB I didn't know how to buy a house either, so I took an economics class, studied finance and risk management, I researched A LOT and asked my life mentors questions. Maybe I should have just gave it the good ol' american try, "bought" the mcmansion, and now I could be crying help too. I put "bought" in quotes because I didn't put a down payment down.
Did you know the average american spends $1.22 for every dollar they make? I told this to someone the other day, and she nodded, smiled in agreement, said "that sounds like me", and appeared to be proud of it. Where is the accountabilty? The government doesn't set a very good example either.
I personally think it is a matter of 'heart' strawbeary... no offense intended but if you believe you're the only one with things to protect, or that your things to protect are any more important than anyone else's, then you are proving my point exactly.
As far as accountability goes... where is the accountability of a nation of 300million people to look after itself? Why are people so un willling to take any accountability for the state of the country we live in?
tens of millions of wreckless idiots went out and signed stupid mortgages, but its not my responsibility to help them? Is it your responsibility to help starving kids? the homeless? veterans?
i personally think its all part of the same line of thought... this is a self obsessed nation... everyone has problems, everyone has needs, everyone makes mistakes... leaving those that do to die is about as unproductive a solution as is possible. 'Social conscience' is not some dirty liberal term to make conservatives feel guilty... its a necessary part of any functioning society... i think our society owes much of its dysfunction to the painful lack of it.
here's a term for you, "natural selection"...
hahahaha touche... thats really sad to me, but i respect your opinion
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