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09/18/2008 05:46:06 PM · #151 |
Originally posted by cpanaioti:
Originally posted by yanko:
Originally posted by cpanaioti:
Originally posted by rswank:
Originally posted by cpanaioti:
Sure they have formulas to determine what a person can afford, but in the end it's up to the consumer to accept or deny what the bank is offering. Maybe the formulas are flawed. So what, it's ultimately up to the consumer to sign on the dotted line. No one put a gun to their head.
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Google "no income verification loan" or "stated income verification loan"
The fact that that was ever marketed and made available to the mass market is appalling.
The industry knew the mortgage business as run like it was being run was a house of cards but couldn't help themselves. |
Let me restate something....
Since it's the consumer that ultimately pays, it is ultimately their responsibility to do their due diligence.
In the end, the government has to have the policies in place that somewhat protects the consumer from their own stupidity and keeps big business from getting overly greedy. Where that point is, who knows. |
What about the corporate stupidity of offering no income verification loans? Without that stupidity there would be no consumers getting those loans in the first place. So... if governments have to have policies in place to protect consumer stupidity then it would seem like this is where you start (i.e. from the top down.). |
The corporate stupidity amounts to greed. Offering, not forcing consumers to sign.
But, I guess if you don't want the government telling you how to run your business, this is what you end up with. |
When you say business you mean personal business right? Because if you meant business as in the "corporate business" then yes I agree with you. Government should have told those lenders how to run their business since apparently they were completely clueless and irresponsible.
Message edited by author 2008-09-18 17:47:00.
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09/18/2008 06:03:38 PM · #152 |
Originally posted by cpanaioti:
The corporate stupidity amounts to greed. Offering, not forcing consumers to sign.
But, I guess if you don't want the government telling you how to run your business, this is what you end up with. |
Isn't this the entire purpose of capitalism? Make money. Make more money than your competitors. If they make more money than you, take more risks in order to compete.
Not so much greed as the consequences of the system. Take away the regulation and people will naturally take increasingly greater risks in order to maximise the return. All is well (like always doubling up on a 50:50 bet) until you run out of money/credit.
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09/18/2008 06:09:04 PM · #153 |
Originally posted by Matthew:
Originally posted by cpanaioti:
The corporate stupidity amounts to greed. Offering, not forcing consumers to sign.
But, I guess if you don't want the government telling you how to run your business, this is what you end up with. |
Isn't this the entire purpose of capitalism? Make money. Make more money than your competitors. If they make more money than you, take more risks in order to compete.
Not so much greed as the consequences of the system. Take away the regulation and people will naturally take increasingly greater risks in order to maximise the return. All is well (like always doubling up on a 50:50 bet) until you run out of money/credit. |
Which means the consumer has to take more responsibility, ie. do their due diligence before signing on the dotted line.
... then ... let the chips fall where they may. Let AIG fail and then brace yourself.
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09/18/2008 06:21:10 PM · #154 |
| So the government is supposed to protect me from my potential stupidity, and protect businesses from decisions that could easily lead to bankruptcy... This all goes back to personal responsibility--for people and corporations. Maybe it's time for the cycle of protection to stop. If I take out a loan I can't afford I should lose my collateral. If the bank was stupid enough to give me the money, they should be willing to accept that I will probably default. The only ones who should be protected from losses are the depositors. Of course, that will be hard to begin now that everyone is used to being protected. |
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09/18/2008 06:25:13 PM · #155 |
Originally posted by cpanaioti:
... then ... let the chips fall where they may. Let AIG fail and then brace yourself. |
Wouldn't that harm people who have very well done their due diligence in the form of higher interest rates, more difficult time obtaining credit, and economic volatility? |
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09/18/2008 06:28:57 PM · #156 |
Originally posted by chaimelle:
So the government is supposed to protect me from my potential stupidity, and protect businesses from decisions that could easily lead to bankruptcy... This all goes back to personal responsibility--for people and corporations. Maybe it's time for the cycle of protection to stop. If I take out a loan I can't afford I should lose my collateral. If the bank was stupid enough to give me the money, they should be willing to accept that I will probably default. The only ones who should be protected from losses are the depositors. Of course, that will be hard to begin now that everyone is used to being protected. |
The government does not necessarily need to protect us from our own stupidity, but it does necessarily need to protect us from stupidity that breaks the system. If there are stupid actions that can be taken that can bring the system down, then I don't see why we should simply rely on personal responsibility as a safeguard (especially if those stupid actions appear as a quick way to make a buck). Personal responsibility will NEVER have a 100% track record and sometimes it only takes 1 person/entity/corporation in a thousand to break the whole system. |
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09/18/2008 06:32:12 PM · #157 |
| If I was involved with Lehman Brothers in any way, I would not be happy right now! |
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09/18/2008 06:32:25 PM · #158 |
It really come to a system wide break down with every one in the chain responsible to some extent, some more than others. It starts with the government pushing loan companies/banks to get people in homes at what ever cost, such as FHA backed loans with no money down, closing cost rolled into the loan and just adding PMI to the loan. I remember this starting with the Clinton Administration and continuing into the Bush administration, both touting how home ownership has been increasing and how important it was to own a home. Then you have consumers that had Champaign taste on cool-aid budgets biting off more than they could chew or getting into dangerous variable arm loans so their payments were low right now. The banks had backing by freddie mac and Fannie may so they figured they were backed regardless whether the loan was paid or not. The loan companies then package the loans, deceivingly in some cases, and sell them as secure securities with the promise that even if they do default they will still make money due to property values increases and insurance purchased through a company like AIG. Pop goes the property bubble, the economy starts to tank, interest rates go up causing variable arms to raise pushing mortgages payments well beyond peoples means. The consumers start to default at rapid pace and banks start to take a licking and running low or completely out of liquidity and here we are, spending our tax dollars bailing out a group of stupid, greedy and careless individuals b/c if we don't then we suffer(penisons, 401K's, IRA's..etc bottoming out) b/c of them. Top to bottom every one is to blame.
added side note, I'm not condemning every one who has been foreclosed on was stupid, some hit hard times beyond their control. |
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09/18/2008 06:36:35 PM · #159 |
Th problem in letting AIG fail is that the insured financial instruments would be put to only 2 options sell them to another institution or call in the loans.
I did my due diligence and I have a loan I can afford. I have a few credit cards but I pay them off each month. I save for the big ticket items I want to buy like Nikon gear. In other words if there is not enough cash in my pocket to buy it I guess I don't get to buy it.
But if AIG were allowed to fail and they called in my mortgage loan it would cripple me, there is no way I could cover that debt in cash. I understand letting Lehman Brothers go but AIG, Fanny and Freddie are a different story.
Message edited by author 2008-09-18 18:38:28. |
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09/18/2008 06:38:44 PM · #160 |
Originally posted by DrAchoo:
Originally posted by chaimelle:
So the government is supposed to protect me from my potential stupidity, and protect businesses from decisions that could easily lead to bankruptcy... This all goes back to personal responsibility--for people and corporations. Maybe it's time for the cycle of protection to stop. If I take out a loan I can't afford I should lose my collateral. If the bank was stupid enough to give me the money, they should be willing to accept that I will probably default. The only ones who should be protected from losses are the depositors. Of course, that will be hard to begin now that everyone is used to being protected. |
The government does not necessarily need to protect us from our own stupidity, but it does necessarily need to protect us from stupidity that breaks the system. If there are stupid actions that can be taken that can bring the system down, then I don't see why we should simply rely on personal responsibility as a safeguard (especially if those stupid actions appear as a quick way to make a buck). Personal responsibility will NEVER have a 100% track record and sometimes it only takes 1 person/entity/corporation in a thousand to break the whole system. |
I don't advocate a total absence of regulations, but I would hate to end up with the government in total control. I am not convinced government regulations would prevent a breakdown anyway. |
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09/18/2008 06:41:08 PM · #161 |
Originally posted by thegrandwazoo:
Th problem in letting AIG fail is that the insured financial instruments would be put to only 2 options sell them to another institution or call in the loans.
I did my due diligence and I have a loan I can afford. I have a few credit cards but I pay them off each month. I save for the big ticket items I want to buy like Nikon gear. In other words if there is not enough cash in my pocket to buy it I guess I don't get to buy it.
But if AIG were allowed to fail and they called in my mortgage loan it would cripple me. there is no way I could cover that debt in cash. I understand letting Lehman go but AIG, Fanny and Freddie are a different story. |
I doubt they would be able to call in your loan. If you are a good paying customer they would just sell your loan to another bank thus liquidating your paper generating cash flow that way. BTW, is there a clause in your mortgage that they can call your loan in w/o you defaulting first? Most contracts don't have that clause but I am curious if that is normal in mortgage contracts.
Message edited by author 2008-09-18 18:41:57. |
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09/18/2008 06:45:24 PM · #162 |
| Well from what I have been hearing it is possible that the loan could be called in but unlikely. Still AIG needs to be helped because of necessity and the further damage to the financial markets. |
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09/18/2008 06:46:15 PM · #163 |
Originally posted by trevytrev:
BTW, is there a clause in your mortgage that they can call your loan in w/o you defaulting first? Most contracts don't have that clause but I am curious if that is normal in mortgage contracts. |
Don't know I would have to refer to my loan docs.
Message edited by author 2008-09-18 18:49:42. |
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09/18/2008 07:02:14 PM · #164 |
Originally posted by DrAchoo:
Interesting. So can you elucidate why you think socialism is a good thing? I'm interested in your answer. |
Sorry the reply took so long...
Let me first state that I am a democrat. But, I fall on the âsocialist democratâ side of democrat, which is to the left of a democrat, to the right of a socialist, and to the far right of a communist.
That said, I believe in the following:
The government was created âof the people,â âby the people,â and âfor the people.â This does not mean a select few of the people, this means all people regardless of income, race, sex, or ability. I think this is an improvement over a meritocracy, oligarchy, monarchy, dictatorship, etc. According to the founding fathers, âWe, the people.â This does not mean except you, and you, and you, and you.
Why is Socialism a good thing? I donât think absolute socialism is any better than absolute capitalism; they are both extremes at opposite ends. But when you have capitalism tempered by socialism to ensure the rights and the welfare of the general population, you have a government that is working for the people rather than for a few select people. Pure capitalism leads to an extreme of haves and have nots. Pure socialism doesnât allow enough freedoms.
We have socialist programs working in this country today: Social Security, Medicare, free education. These provide much for the general population. To extend it to include health care only makes sense. It is part of the general welfare of the population. I also believe that we should nationalize the oil, gas, and mineral reserves the US government owns on its vast tracts of land including the North Slope. (Alaskans got a great $1200 paycheck from taxing oil that was drilled on Federal Property, about $720 million plus what ever went into the state coffers. ) If these reserves were nationalized, the Federal Government could easily pay for universal health care among other social projects.
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09/18/2008 07:09:38 PM · #165 |
Originally posted by dahkota:
Originally posted by DrAchoo:
Interesting. So can you elucidate why you think socialism is a good thing? I'm interested in your answer. |
Sorry the reply took so long...
Let me first state that I am a democrat. But, I fall on the âsocialist democratâ side of democrat, which is to the left of a democrat, to the right of a socialist, and to the far right of a communist.
That said, I believe in the following:
The government was created âof the people,â âby the people,â and âfor the people.â This does not mean a select few of the people, this means all people regardless of income, race, sex, or ability. I think this is an improvement over a meritocracy, oligarchy, monarchy, dictatorship, etc. According to the founding fathers, âWe, the people.â This does not mean except you, and you, and you, and you.
Why is Socialism a good thing? I donât think absolute socialism is any better than absolute capitalism; they are both extremes at opposite ends. But when you have capitalism tempered by socialism to ensure the rights and the welfare of the general population, you have a government that is working for the people rather than for a few select people. Pure capitalism leads to an extreme of haves and have nots. Pure socialism doesnât allow enough freedoms.
We have socialist programs working in this country today: Social Security, Medicare, free education. These provide much for the general population. To extend it to include health care only makes sense. It is part of the general welfare of the population. I also believe that we should nationalize the oil, gas, and mineral reserves the US government owns on its vast tracts of land including the North Slope. (Alaskans got a great $1200 paycheck from taxing oil that was drilled on Federal Property, about $720 million plus what ever went into the state coffers. ) If these reserves were nationalized, the Federal Government could easily pay for universal health care among other social projects. |
That's the response I would expect to get and a worthy one. However, I'll press you a bit and ask if you really believe "people are inherently good and want to help others", then why do we need socialism to "ensure the rights and the welfare of the general population"? To me those two statements are somewhat at odds.
Message edited by author 2008-09-18 19:10:02. |
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09/18/2008 07:11:10 PM · #166 |
Originally posted by thegrandwazoo:
Originally posted by trevytrev:
BTW, is there a clause in your mortgage that they can call your loan in w/o you defaulting first? Most contracts don't have that clause but I am curious if that is normal in mortgage contracts. |
Don't know I would have to refer to my loan docs. |
Very unlikely.
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09/18/2008 07:28:27 PM · #167 |
Originally posted by cpanaioti:
Originally posted by Matthew:
Originally posted by cpanaioti:
The corporate stupidity amounts to greed. Offering, not forcing consumers to sign.
But, I guess if you don't want the government telling you how to run your business, this is what you end up with. |
Isn't this the entire purpose of capitalism? Make money. Make more money than your competitors. If they make more money than you, take more risks in order to compete.
Not so much greed as the consequences of the system. Take away the regulation and people will naturally take increasingly greater risks in order to maximise the return. All is well (like always doubling up on a 50:50 bet) until you run out of money/credit. |
Which means the consumer has to take more responsibility, ie. do their due diligence before signing on the dotted line.
... then ... let the chips fall where they may. Let AIG fail and then brace yourself. |
Maybe if the whole context was posted it would make sense as this was a response to Mathew's statement about capitalism.
So, to answer a previous question, letting AIG fail could be catastrophic.
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09/18/2008 07:31:38 PM · #168 |
Originally posted by DrAchoo:
That's the response I would expect to get and a worthy one. However, I'll press you a bit and ask if you really believe "people are inherently good and want to help others", then why do we need socialism to "ensure the rights and the welfare of the general population"? To me those two statements are somewhat at odds. |
I believe that people are inherently good and want to help others. However, there are times when all the help you can give is not enough. Since the people contribute to the government to provide general welfare, then the government, as an extension of the people, help those that others cannot help.
When communities were smaller, and even in small towns today, neighbors help neighbors - food drives, clothes drives, assistance drives, blood drives, etc. This also happens in big cities on a different scale. But some people need help that ordinary people can't provide. Medical care for example. Or education. I can tutor someone, but I cannot cure their cancer. I can help someone by giving them clothes and money, but I cannot build them a house.
Additionally, while people are inherently good, sometimes they just don't see how their beliefs impact other people. I'm trying for a delicate way to say this, but I think I'll ultimately fail so I'll give an example. I know some very old southern farmers who still think highly of the Confederacy. While they don't harm any groups of people, they don't go out of their way to help them either. They are good people, if a little misguided. Hope I made sense. |
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09/18/2008 09:39:24 PM · #169 |
Well, I didn't feel like reading the whole 9 pages, so I just read the op and am responding based on that, not to the original poster, but to the idea.
I think its funny that people are even debating the difference between a presidential nominee being ready and a vice president being ready. Its kind of interesting to me that we even compare a president and a vice president. Thats like saying "vote for Mccain because he's more qualified than Biden. Just kind of funny to me. btw this isn't intended as an attack at all, so no one take it that way, just an observation.
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09/18/2008 11:08:10 PM · #170 |
Originally posted by yanko:
Originally posted by cpanaioti:
... But, I guess if you don't want the government telling you how to run your business, this is what you end up with. |
When you say business you mean personal business right? Because if you meant business as in the "corporate business" then yes I agree with you. Government should have told those lenders how to run their business since apparently they were completely clueless and irresponsible. |
Government did have their hand in all of this...starting with trying to make loans available to minorities and low-income families, originally going back 30 years or so. It never did work all that well (for making money), then in 1995 (how did that slip past Clinton anyway?) it appears to have started a trend that would escalate.
Interesting read --> How the Subprime Mortgage Mess Began |
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09/19/2008 01:33:12 AM · #171 |
Originally posted by dahkota:
Originally posted by DrAchoo:
That's the response I would expect to get and a worthy one. However, I'll press you a bit and ask if you really believe "people are inherently good and want to help others", then why do we need socialism to "ensure the rights and the welfare of the general population"? To me those two statements are somewhat at odds. |
I believe that people are inherently good and want to help others. However, there are times when all the help you can give is not enough. Since the people contribute to the government to provide general welfare, then the government, as an extension of the people, help those that others cannot help.
When communities were smaller, and even in small towns today, neighbors help neighbors - food drives, clothes drives, assistance drives, blood drives, etc. This also happens in big cities on a different scale. But some people need help that ordinary people can't provide. Medical care for example. Or education. I can tutor someone, but I cannot cure their cancer. I can help someone by giving them clothes and money, but I cannot build them a house.
Additionally, while people are inherently good, sometimes they just don't see how their beliefs impact other people. I'm trying for a delicate way to say this, but I think I'll ultimately fail so I'll give an example. I know some very old southern farmers who still think highly of the Confederacy. While they don't harm any groups of people, they don't go out of their way to help them either. They are good people, if a little misguided. Hope I made sense. |
I don't know. When I look at the world today and what has occurred throughout history from slavery to current day genocides, I have a hard time believing people are generally good. Yes people can be good especially when it includes a possible benefit to themselves or to their immediate tribe (i.e. friends, family, etc.) but when that's not the case I just don't see it. People in general don't care about what's going on in African but they do care about what's going on in Iraq because it is effecting their wallets. Same goes for just about any other issue. Granted there are exceptions but generally speaking we only care when it effects us.
Message edited by author 2008-09-19 01:39:16.
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09/19/2008 07:18:21 AM · #172 |
Originally posted by yanko:
I don't know. When I look at the world today and what has occurred throughout history from slavery to current day genocides, I have a hard time believing people are generally good. Yes people can be good especially when it includes a possible benefit to themselves or to their immediate tribe (i.e. friends, family, etc.) but when that's not the case I just don't see it. People in general don't care about what's going on in African but they do care about what's going on in Iraq because it is effecting their wallets. Same goes for just about any other issue. Granted there are exceptions but generally speaking we only care when it effects us. |
Maybe its just the people you are surrounded by. I work at a large university near a large city, all of it with a strong liberal stance. What's going on in the rest of the world is extremely important and the subject of numerous conversations daily. At least 20% of the people I know are either first generation citizens or foreign nationals.
I do believe, however, that most genocide today is brought on by religious differences, as it seems has most always been the case. With regards to that, the people (not the leaders) often believe what they are told, that they are doing a good thing, the right thing, what God wants. The exception, of course, is the Empire building by some European countries in countries that refused to be colonized (i.e. south Africa, India, North and South America). This is one reason I do not like George bush or Sarah Palin; they call the war God's will. they don't seem to understand that the other side, Al Quida, also considers it God's will.
As I said before, I believe that people are inherently good but I believe they can be misguided. |
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09/19/2008 07:44:33 AM · #173 |
Originally posted by ryand:
Well, I didn't feel like reading the whole 9 pages, so I just read the op and am responding based on that, not to the original poster, but to the idea.
I think its funny that people are even debating the difference between a presidential nominee being ready and a vice president being ready. Its kind of interesting to me that we even compare a president and a vice president. Thats like saying "vote for Mccain because he's more qualified than Biden. Just kind of funny to me. btw this isn't intended as an attack at all, so no one take it that way, just an observation. |
I think this is an issue due to McCain's age. |
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09/19/2008 08:22:47 AM · #174 |
Originally posted by dahkota:
I do believe, however, that most genocide today is brought on by religious differences, as it seems has most always been the case. |
Genocide occurs when one group convinces itself that another group is less than human. Religion can be used to make such distinctions, but recent cases seem to be driven by Nationalism. When Hutus slaughtered Tutsis, it was tribalism/nationalism. The genocide in the Sudan also seems to be based on tribalism/nationalism. The very term "ethnic cleansing" suggests nationalism is involved. The Holocaust was also based on nationalism. Almost as many non-Jews were killed as Jews, the purpose being to promote a certain German/Aryan ideal. The Nazis were certainly not religious.
I have to go back to colonialism, the genocide of Native Americans and Australian Aborigines, before I see religion as a possible culprit. But even there, I suspect it had more to do with empire building than religion. Religion is part of it, though, part of the process of shaping minds to believe that they are inherently better than other people. The interesting thing, though, is that religion is part of the solution as well. Think about the "Red Cross" and the "Red Crescent." Think about the Dalai Lama and Mother Theresa.
edited to get my Hutus and Tutsis straight
Message edited by author 2008-09-19 08:24:27. |
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09/19/2008 08:35:48 AM · #175 |
Originally posted by glad2badad:
Government did have their hand in all of this...starting with trying to make loans available to minorities and low-income families, originally going back 30 years or so. It never did work all that well (for making money), then in 1995 (how did that slip past Clinton anyway?) it appears to have started a trend that would escalate.
Interesting read --> How the Subprime Mortgage Mess Began |
I did read it. The key moment is here:
Then a 1995 amendment to the CRA permitted securitization of these loans. This changed everything. The bond market could now be tapped to fund CRA loans. Investment bankers very profitably packaged CRA mortgages for bond buyers. As incredible as it now seems, these bonds were rated AAA, making this new source of mortgage funds very inexpensive and âOKâ to buy by public and pension funds restricted by law to top rated bonds and other investment funds that shunned low rated bonds.
In no way does this 1995 amendment logically follow from giving mortgages to minorities. The problem begins in 1995, plain and simple. Nice try at putting the blame on minorities and affirmative action, though! That's quite a spin.
I will concede the anti-Clinton points, though. It was one of his many right-wing moments. I voted for Nader in 96. |
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