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Old 10-06-2008, 01:01 PM   #141
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raise your hand if you know someone who walked away from a mortgage they couldn't afford (for whatever reason).



in any market, if you have a widget that loses its fad status and nobody wants it, there will be a glut of said widget. lots of cheap widgets and no buyers means the value of the widget goes down.

so say I lent you $20 and you gave me your $25 widget to hold on to.

time goes by and the widget is worth more like $15 now. and nobody wants widgets anymore.

you're going to keep your money instead of buying a widget worth less than the cash.

except that 50 of your friends have given me widgets to loan them 20 bucks and I can't even sell the widgets back at $10 because nobody wants them anymore. (who would pay $20 for a $10 widget? they'd rather risk me hating them)

so while I originally spent $1000 for 1250 worth of widgets, now I own 50 widgets that are maybe worth $10 each.

And I can't sell them.

so now I own all these widgets with low price tags and NO money. and nobody's buyin.

...


or rather I have worthless collateral and I'm out a thousand bucks.

or rather I have all these foreclosed properties and I'm out a few hundred million bucks.
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Old 10-06-2008, 01:04 PM   #142
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and this is why I'm voting Green Party.
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Old 10-06-2008, 01:11 PM   #143
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Originally Posted by tvalenziano View Post
I dunno about the 6% figure, but also most of these problems are in high cost markets (FL, CA, etc)...

They said it right in the 60 minutes vid.
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Old 10-06-2008, 01:19 PM   #144
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Originally Posted by levnubhin View Post
How the hell can just 6% have such a huge impact?
A foreclosure costs them a lot more than they make on a good mortgage. And when the foreclosures are in CA (or etc) and the good mortgages are in Indiana (or etc) with 5.25% rates the losses quickly add up to more than your profits.

What I don't get are all the people who're "hit hard" by this who are either renters, or aren't going through foreclosure, or who have no real reason to be "hit hard" by the crisis. I mean I'm still living how I have been living for years. Sure, my equity is in the toilet, which makes me stuck for awhile but I'm stuck with a low interest mortgage that has a low payment. Oh noes! I suspect that every ******* who lived their life on credit for years now has a half dozen maxed out cards that had their rates jacked up to 29.98% and because of the credit lockdown they can't get new cards to pay the old ones. I have no sympathy for these people.
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Old 10-06-2008, 01:19 PM   #145
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Quote:
Originally Posted by levnubhin View Post
All Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008

Name Office State Party Grand Total Total from
PACs Total from
Individuals
Dodd, Christopher J S CT D $165,400 $48,500 $116,900
Obama, Barack S IL D $126,349 $6,000 $120,349
Kerry, John S MA D $111,000 $2,000 $109,000
Bennett, Robert F S UT R $107,999 $71,499 $36,500
Bachus, Spencer H AL R $103,300 $70,500 $32,800
Blunt, Roy H MO R $96,950 $78,500 $18,450
Kanjorski, Paul E H PA D $96,000 $57,500 $38,500
Bond, Christopher S ‘Kit’ S MO R $95,400 $64,000 $31,400
Shelby, Richard C S AL R $80,000 $23,000 $57,000
Reed, Jack S RI D $78,250 $43,500 $34,750
Reid, Harry S NV D $77,000 $60,500 $16,500
Clinton, Hillary S NY D $76,050 $8,000 $68,050
Davis, Tom H VA R $75,499 $13,999 $61,500
Boehner, John H OH R $67,750 $60,500 $7,250
Conrad, Kent S ND D $64,491 $22,000 $42,491
Reynolds, Tom H NY R $62,200 $53,000 $9,200
Johnson, Tim S SD D $61,000 $20,000 $41,000
Pelosi, Nancy H CA D $56,250 $47,000 $9,250


http://goodtimepolitics.com/2008/09/...vest-in-obama/
You understand that (for Obama) 95% of that was from individuals, right? Like if I gave him $500. And I have to report who my employer is when giving over $200.

So that leaves $6000 in PAC dollars over the years he's been in office.

Compare to Bennet, Bachus, and Blunt right below him who all raked in over 70,000 in PAC dollars each.
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Old 10-06-2008, 01:21 PM   #146
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You understand that (for Obama) 95% of that was from individuals, right? Like if I gave him $500. And I have to report who my employer is when giving over $200.

So that leaves $6000 in PAC dollars over the years he's been in office.

Compare to Bennet, Bachus, and Blunt right below him who all raked in over 70,000 in PAC dollars each.

Yes, I understand that, that's what we are told. Take it with a grain of salt either way.
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Old 10-06-2008, 01:46 PM   #147
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or rather I have all these foreclosed properties and I'm out a few hundred million bucks.
disclaimer: I know nothing about economics

uninformed question: So when did it become the government's job to take the risk out of investing and business in general?
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Old 10-06-2008, 01:53 PM   #148
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The point is not the 6% of mortgages in foreclosure. The point is that someone took those mortgages (btw, not only that 6% but also those from homeowners who have not and will not default) and parted them out creating a financial ponzi scheme whereby many of those financial institutions would keep a piece of them and resell the rest to the next institution and so on. To avoid regulations, they called them "swaps" instead of insurance.

And btw, they have their own lobbying arm: something called the "Derivatives and Swaps Association" or something like that who's object is to prevent regulation.

Where I come from that's fraud. They multiplied the real value of those mortgages many times over.

One other point I want to make: in 2001, the financial sector represented around 10% of all Wall Street total profits which btw, is around the amount that sector usually accounted for. In 2007, that amount had reached 40% of all Wall Street profits. Someone was asleep at the wheel.

I only hope your next government has the ***** to call something similar to the 911 Commission to investigate what happened and sends some people to jail.
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Old 10-06-2008, 01:54 PM   #149
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Quote:
Originally Posted by hustler View Post
disclaimer: I know nothing about economics

uninformed question: So when did it become the government's job to take the risk out of investing and business in general?

Because they did such a great job with health care and social security. Why not take over the housing market.
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Old 10-06-2008, 01:56 PM   #150
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Old 10-06-2008, 01:56 PM   #151
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Quote:
Originally Posted by hustler View Post
disclaimer: I know nothing about economics

uninformed question: So when did it become the government's job to take the risk out of investing and business in general?
I like your disclaimer.

The government's job should always be to regulate investing and business in general; not take the risk out of it. If not, you see the results. Greed is a very powerful motive. Someone has to control it.
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Old 10-06-2008, 02:04 PM   #152
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Originally Posted by Rafa View Post
I like your disclaimer.

The government's job should always be to regulate investing and business in general; not take the risk out of it. If not, you see the results. Greed is a very powerful motive. Someone has to control it.

On the other hand you could argue that regulating takes away the risk. This "Bail out plan" does nothing but eliminate all the risk involved. As it looks now, everyone responsible for this problem is off the hook with very fat wallets.
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Old 10-06-2008, 02:44 PM   #153
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Originally Posted by levnubhin View Post
On the other hand you could argue that regulating takes away the risk. This "Bail out plan" does nothing but eliminate all the risk involved. As it looks now, everyone responsible for this problem is off the hook with very fat wallets.
Yes Phil but; a bailout plan is not regulating!

BTW, risk is inherent to any business practice. I've been involved in business for more than 30 years and I've suffered the ups and downs. I'm a free market advocate but that doesn't mean a "free for all".

By regulating I mean providing a level playing field for participants. I want someone to assume responsibility when they sell me something which doesn't live up to their advertisement. Let me give you an example: Do you recall what happened with some Chinese toothpaste that was sold not many months ago? More than 100 people died after using it in Latin America alone. That could have been avoided with regulations.

Regulations don't always come from the government; let me give you an example: ebay has regulations they set themselves and they're the key to their success.

****, I'm sorry I'm ranting so much!
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Old 10-06-2008, 02:56 PM   #154
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lol, I understand what your saying and meant. IMO the only thing the government should be doing is making sure there isnt anything illegal going on, not get involved in protecting people from risk.


With all this talk about Freddie Mac, fannie Mae and other companies and all their illegal practices we are forgetting one thing.

Personal responsibility. "Main street" is being forgiven for their stupid decisions. If you bit off more than you could chew then you should be allowed to choke on it. It isnt fare to the majority who can and are paying their mortgage.
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Old 10-06-2008, 02:58 PM   #155
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Quote:
Originally Posted by hustler View Post
disclaimer: I know nothing about economics

uninformed question: So when did it become the government's job to take the risk out of investing and business in general?
1. because I dont trust you to do it yourself. (this is part of the mortgage crisis)

2. because a capitalist society needs a gradient of socioeconomic levels to function

3. because this isn't socialism any more than your beliefs are fascism. if you want a strong economy, you have to make sure ALL of the socioeconomic levels are stable.

or as I prefer to put it: if you force the dog to crap in one corner of the living room, the whole house will smell like ****.
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Old 10-06-2008, 03:16 PM   #156
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well, just to get on the soap box because I know everyone here is on the edge of their yoga matt, awaiting my soliloquy...

now that the USA has all this crap, its time to regulate the **** out of stuff like energy markets, and tell us how their going to get rid of this, since I don't care to see my government as a business owner, if they're not going to give tax payers any of the earnings.
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Old 10-06-2008, 03:44 PM   #157
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It shouldn't be my responsibilty or my problem to have to bail out these freakin idiots who invested unwisely or can't pay their bills!! I hope in some ways the bailout doesn't go through. On a positive note, the weak market is bringing oil prices down!!
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Old 10-06-2008, 03:57 PM   #158
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rhetorical question: so who suffers more in a depression? the rich or the already poor...
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Old 10-06-2008, 04:40 PM   #159
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It shouldn't be my responsibilty or my problem to have to bail out these freakin idiots who invested unwisely or can't pay their bills!! I hope in some ways the bailout doesn't go through. On a positive note, the weak market is bringing oil prices down!!
the problem is without regulation or oversight you get a situation like this where a lot of people (yes probably stupid people) were swindled into taking bad loans they couldn't afford and didn't understand. And now that ***** us all so if you don't want it to happen again you have to make sure it doesn't happen again with better regulation.
There's a difference between a few people making mistakes with their mortages and having to deal witht the consequences and a system which allows for disimformation, fraud and the taking advantage of stupid people to everyone else's detriment.
You have to protect the stupid people to protect the rest of us that will take the fall with them.
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Old 10-06-2008, 05:10 PM   #160
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A piece of good news: http://www.msnbc.msn.com/id/27013906?GT1=43001

I know it will be difficult but some heads will definitely roll.
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