Proposed "Bail out plan"
10-06-2008, 12:01 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.
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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10-06-2008, 12:11 PM
#143
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They said it right in the 60 minutes vid.
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10-06-2008, 12:19 PM
#144
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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.
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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10-06-2008, 12:19 PM
#145
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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/
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/
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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10-06-2008, 12:21 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.
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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10-06-2008, 12:53 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.
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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10-06-2008, 12:54 PM
#149
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Because they did such a great job with health care and social security. Why not take over the housing market.
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10-06-2008, 12:56 PM
#150
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http://en.wikipedia.org/wiki/George_Soros
http://en.wikipedia.org/wiki/UN
http://en.wikipedia.org/wiki/Socialism
The above items are basic opposing views (antithesis) to the following items.
http://en.wikipedia.org/wiki/United_States_Constitution
http://en.wikipedia.org/wiki/Freedom_(political)
http://en.wikipedia.org/wiki/UN
http://en.wikipedia.org/wiki/Socialism
The above items are basic opposing views (antithesis) to the following items.
http://en.wikipedia.org/wiki/United_States_Constitution
http://en.wikipedia.org/wiki/Freedom_(political)
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10-06-2008, 12:56 PM
#151
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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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10-06-2008, 01:04 PM
#152
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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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10-06-2008, 01:44 PM
#153
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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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10-06-2008, 01:56 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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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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10-06-2008, 01:58 PM
#155
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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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10-06-2008, 02:16 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.
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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10-06-2008, 03:40 PM
#159
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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10-06-2008, 04:10 PM
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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.
I know it will be difficult but some heads will definitely roll.
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