Economy UP

“"One of the concerns that I have is that we'll probably end up borrowing this $150 billion from the Chinese," he [Huckabee] said. "And when we get those rebate checks, most people are going to go out and buy stuff that's been imported from China. I have to wonder whose economy is going to be stimulated the most by the package. "

http://politicalticker.blogs.cnn.com/2008/01/24/huckabee-slams-stimulus-package-proposes-major-public-works-project/”

“The economic stimulus package agreed on by Bush and the Dems ("The Splurge") is a "hair of the dog that bit me" solution that would probably give a short term fix, but aid the transfer of wealth to China in the long run. I agree with Huckabee on that.

This money give away is like putting a band aid (one of the tiny ones) on a decapitation.”

“Agreed - that is a joke.

I actually see we'll see the effects of the interest rates beginning to gradually kick in over the next few months now. What they need is a little patience now or we'll see inflation flare.

Only trouble over the longer term is that we're just inflating the bubble again.”

“You may see a test of that 'another depression', if energy consumption doesn't find a solution soon.”

“Yeah, it's a temporary fix at best. Keeping hands off the market and letting it calm down by itself is best IMHO.

I'll tell ya great tool for financial security is Dave Ramsey's Book The Total Money Make Over. He says it's "The same advice your grandmother would give but we keep our teeth in.".”

“also what they're seeing people do is shutting their blinds, ignoring their phone and not getting their mail...most banks would rather work with a borrower than foreclose but so many of them just ignore the problem”
thriftyhiker
9:15:55 AM
4/03/08

that's not really true though. Although the situation has improved as the numbers increased - many many people have struggled to see any response from their banks or the current holders of their mortgages.

Until it started to hit their bottom line in serious fashion and the political pressure built up many lenders thought it was better to forclose on a few mortages to keeep the other payers in line.

Like I've said before, individuals have responsibilty and are certainly paying the costs, but the banks and other lenders have not been friendly or co-operative to those in trouble.”

“i'm just going off a NPR report i heard were they interviewed several "industry experts" and that was what they were saying...also, many of the lenders have begun setting up town hall type meetings in different cities to try and get people to come out and discuss their mortgage problems and help find a solution”

“I maybe have come across as a little confrontational with you thrifty - and I apologize for that.

I just find it annoying the number of people who see this problem as being restricted to the reckless and feckless.

Sure a number have been irresponsible, but there's others who are being hit who were just trying to make something of their lives - to build wealth and equity and to own a home they could bring their family up in.
If we are here ready to dismiss them as somehow worthless because they were sold on a mortage then we also need to be here criticisning the ones who lent them the money.

If I lend a friend who is a decent guy but has some issues $100, looking to make a profit, and he can't pay it back, who is at fault.

For me it's both of us.
last edited: 4/03/08 9:41:12 AM”

“of course, like anything there are multiple reasons

If I lend a friend who is a decent guy but has some issues $100, looking to make a profit, and he can't pay it back, who is at fault.

For me it's both of us.”
Y2
12:37:51 PM
4/03/08

ummm, can i borrow $100?”

“If I lend a friend who is a decent guy but has some issues $100, looking to make a profit, and he can't pay it back, who is at fault.

For me it's both of us.

True but at the same time it'd be kind silly to go door to door through your whole town saying, "My buddy can't pay me back the money he owes me so everyone in town has to chip in and pay it off.".

That's where I'm coming from.”

“is that A to B?...are you selling 6 minute abs?”

“I agree Nigal, but I also think something has gone seriously wrong if our main financial instituations are on such a fragile base that two arch-capitalists like Bernanke and Paulson see it as vital to bail out the Bear.

Having said that banking and finance of all kinds has always been a confidence trick.

I like the thought of a return to the gold standard, although I don't think there's enough gold in the world to cover it now.”

“Who do you talk to about a mortgage that's in a bundle of securities held by a retirement fund in Norway. The loan you want to talk about has been sold 5 times and so obsured that who wants to talk except someone else that wants a commission. Only one solution which has always been used can solve the problem- print money as fast as you can and get it into the hands of the same people that caused the problem in the first place. Did I forget that inflation will follow and that once million dollar home will be worth $400,000 (it's real worth) but will have the newly inflated million buck tag on it again.”

“True but at least we won't completely collapse when everyone dumps the US dollar as the standard and goes to Euros or something else.”

“http://bigpicture.typepad.com/comments/2008/04/the-advantages.html

This was interesting.”

““Do you honestly think the banks want to do business with folks who are risky investments?"

Yeah. Lots of people will take on big risks if they think the potential return justifies the risks. I was disabled, without any income and was being hounded by a couple companies that wanted to lend me money (on crazy terms) with my home as collateral. The interest rates they were talking about were huge. I think they felt the increased interest covered the increased risk (what wouldn't have been covered by foreclosing on my home).
last edited: 4/03/08 10:07:50 AM”

“Remember, the home mortgage holding taxpayer doesn't receive the mortgage interest tax exemption when his income is gone-- that pours gasoline on the fire.

Nigal , the US can't compete without being able to change the rules as the game goes on.
If we can't make up the rules , we would have been thrown out the front door of the casino on to the strip out side.
last edited: 4/03/08 10:14:38 AM”

“I was disabled, without any income and was being hounded by a couple companies that wanted to lend me money (on crazy terms) with my home as collateral.

Anyone willing to bet the home on a loan probably deserves what they get. Sounds cold but this is the type of irresponsibility I'm talking about.”

“Yeah, somebody told me I could afford this mortgage, so I guess I can!!!!!!!!!”

“Duh ... where do I sign George?

”

“Socialize risk-privateer profits. Yo, ho, yo, ho it's a pirates wife for me.

Jamie Dimon is on. Yo ho, Japan had Something to do with this mess? hoho
last edited: 4/03/08 10:59:10 AM”

““Yeah, somebody told me I could afford this mortgage, so I guess I can!!!!!!!!!”
Creek Dancer
10:37:15 AM
4/03/08

How do the collapse of Bear Stearns and Countrywide fit into all this?
last edited: 4/03/08 11:13:10 AM”

“They weren't careful who they gave loans to.”

“Well, they made the loans obviously. The lender is just as responsible as the irreponsible borrower.”

“What about the real estate brokers and agents and all the escrow processors and don't forget the appraisers and the sellers. Do you really think any ethics exist in this business? You didn't know that GM have made Cadillac pirate ships for years.”

“about the stimulus package and supporting China's economy ....

We plan on using our money to go on a family trip to Williamsburg, Va. Perhaps the motel we stay in will be owned by China, but the hotel workers, the restaurant workers, the gift shop owners, Anheuser Bush (owners of Bush gardens), and other businesses in the area will appreciate the money.”

“Bear Stearns was lending money to people to buy homes?”

“What happened to Countrywide? Woops!”

“I saw your thread, sarge. We plan to do our hiking around the various amusement parks, tourist traps and colonial williamsburg :).

We'll be there in June.”

“Ok, Bear Sterns didn't make the loans, but Countrywide did. Bear Sterns wasn't the lender; they were one of the largest underwriters of mortgage bonds, many of which were hedged against the sub-prime loans which were are now in the toilet.

Y2, how do you think Bear Sterns fits into this mess?”

“Maybe The Bear can sink or swim on it's own.

But with all the polar ice melt there is nowhere to go.”

“It's symptomatic of how a lack of regulation from top to bottom has allowed Wall Street and big financial institutions to get out of control.

The hand-off approach advocated by this administration has led to a situation where these companies have been betting the whole economy on the housing market to make billions and billions of dollars for shareholders and traders.

Lack of regulation has allowed them to make bets so big that at a basic level, no-one can let them lose.

It's ok for people to call for free markets, and to an extent I agree with them, but we need to at least keep an eye on what's at stake if they're playing the game with all our futures.

We need some reform, and it needs to come from the bottom up and the top down - and not Paulson's recommendations either. When you see shares rise after he gave his planned regulation speech, then you know nothing is going to change.”

“They also need to take a good look at the credit rating agencies.”

“"Business Friendly" should not mean "Let the Idiots Run Wild".”

““We judged that a sudden, disorderly failure of Bear would have brought with it unpredictable but severe consequences for the functioning of the broader financial system and the broader economy,” Mr. Geithner said in his remarks, adding that stock markets and home prices could have fallen significantly in the event of a collapse.

“Absent a forceful policy response, the consequences would be lower incomes for working families, higher borrowing costs for housing, education, and the expenses of everyday life, lower value of retirement savings, and rising unemployment,” Mr. Geithner said.
last edited: 4/03/08 12:47:17 PM”

“.
last edited: 4/03/08 12:44:32 PM”

“Don't need airliners when a threat to our 'glass jaw' capitalism will do. Terrorist, if any has ever existed, off to GITMO with them all, don't forget the dogs and cameras.”

“Wow, this has been a good disscussion.

The collapse of the housing credit market is no surpise when you lend money with no-down payment and no documentation for 125% of the collateral value. It actually paid to abandon the property at the first chance...

2 years ago we looked at 170 k farmette and inspite of 5 lenders begging to loaqn us the money we decided the monthly payment would leave us with no room for emergencies and we abandoned the idea.Not long ago we looked at a peice of land and could not get a loan inspite of having a 20% down payment...

I heard today that even car buyers are having a tough time getting loans. Without access to easy money many people simply cant afford to live.In a way it is a good thing as many were living way beyond thier incomes literally borrowing against realestate gains that didnt exist. Now we are being forced to act more responsibly.

A few other points, Our economy is largly based on cheap oil. Every time oil has increased in price there has been an overall downturn in the economy. Oil has doubled in the last two years and yet there has hardly been any real inflation which simply does not add up. Many other factors simply have not added up either. There have been several major disruptions in our economy which should have triggered far more problems but the fed has been pumping so much money into the economy that the effects went alomst unnoticed... and still no sign of any real inflation.

I noticed the anti-union guys didnt mention that if it was not for the unions they would be making 5.00 an hour too. Non-union wages have long been bolstered by higher paying Union wages.....

Even the Fed is using the R word now so it almost official.... I am expecting things to slide into a depression myself...Gasoline will double in price to 6.00 during the next administration and this will break the bank for many people.”

“The hand-off approach advocated by this administration


Waaaaaaaaaaaaaa?

LOLOLOL !

You're kidding, right?”

“LOLOL - good point well made Sargie.

Paulson comes out with a plan for increased regulation, then you can assume it's been missing for some time.

Lumberjack - that's a good point. One of the reasons the US has flourished as such a large market is that transportation costs have been minimal.

On a positive side the free market can be very swift to respond to these problems.”

“Sarge - you don't get it do you.

You don't get how close the #&%!$ was to the fan when they scrambled to save Bear Stearns. These people are not commies and socialists looking to give your money to poor people - these are frontline free-marketeers who could see that the US economy was about to take a major fall.

When they say it was an unprecedented move - it was!”

“Did BSC have WMD or yellow cake to force a quick decision on everyone before the Tokyo Market opened. Maybe a few thirteen wind neckties around some white collars may help keep this from becomming a Wall Street extortion weekend pastime.

These are the same suits that couldn't use an eight digit calculator to figure their bonus just months ago- Yo Ho.
last edited: 4/03/08 7:04:23 PM”

“LZ, union members make up only 15.7 % of the US workforce. I doubt that it is them keeping me from only making $5 an hour.”

“So you cant understand why companies will hire a 5.00 illegal in place of the 20.00 union guy either?”

“When we speak of freedoms, one that stands out in our civilization(even today) is taking advantage of the ones that haven't the education and basic ability to protect themselves from agressive users that constantly cast over the top into the lower elevations down the left side of the bell curve. Today , we get more details about how the JP Morgan guys practiced the above on the helpless Government and lesser competition in their business. In many times past, the physical amongst us would have practiced their strength on these shysters, as they should.”

“never said anything about illegals. Just that I don't need to thank unions for what my salary is.”

“Its ok Hyway, We didnt do it for you....”

“Sarge - you don't get it do you.

What YOU don't get is that we're in this mess BECAUSE The Bush administration got too involved - they 'had' to get their hands in the mix - with the loan companies. When things went wrong, they then had to undo their mess. Be clear, it's Bush's liberal methods they causes trouble.

Leave business to BUSINESS.”

“LZ, I live in a right to work state. Unions have little power here to extort business owners and/or deprive customers of their goods. A few years back the main office of a union involved with the movie industry forced the local branch to strike. The production company fired all the workers and hired brand new crews and were back to work within a day or two.

Lesson - don't refuse to work when there is a long line of people wishing they had your job.”