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10/02/2008 02:09:30 AM · #251 |
Originally posted by srdanz:
It seems unreasonable that a loan company would reject a customer with a decent credit history and a decent downpayment.
Having to document income and put money down is a normal thing, do not make a crisis out of it.
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The problem is that previously, customers with poor/marginal credit could get a loan/credit. Now they can't.
The way I heard it is that to get the best rates before, you needed a credit score of 630+. Now, to get those same rates, you need a score of 700+. |
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10/02/2008 04:56:15 AM · #252 |
So here's the deal - we as individuals apparently can't do anything to solve the problem on a global basis. But what can we do as individuals? Obviously, don't overextend. Does every American home NEED 6 TVs? I know it's not possible, but is there any way to get back to quality vice rampant consumerism? To encourage things being built to last rather than be replaced every other year? Or is that just a pipe dream?
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10/02/2008 11:34:34 AM · #253 |
Originally posted by Melethia:
So here's the deal - we as individuals apparently can't do anything to solve the problem on a global basis. But what can we do as individuals? Obviously, don't overextend. Does every American home NEED 6 TVs? I know it's not possible, but is there any way to get back to quality vice rampant consumerism? To encourage things being built to last rather than be replaced every other year? Or is that just a pipe dream? |
This is what I'd like to see, too. However, there is a problem with this approach. For too long, this economy was relying on excessive spending, for no apparent need. The old need vs. want dilemma.
If we, US Americans, (to paraphrase miss So. Carolina), suddenly decide not to buy a 3rd car just because our teenager is not happy riding a school bus, or our perfectly well running car is too old, or our stove is so 20th century etc. the production will have to scale back. This was the main idea behind Bush's plan for injecting money into economy, giving a couple of hundreds of dollars that would go back into the economy via those purchases. However, it was too little too late, as the critical mass of chain reaction has been reached already, and those monies were for nothing.
Using the same principle again may not work again. I think that the industries will have to scale back in their estimates and forward looking statements. Starting with the car manufacturers, over home builders, all the way down to the sellers of christmas ornaments and other items typically oversold between the thanksgiving and new year's.
Reality sucks, but this is it. Should have happened 5 years ago, it would have hurt less I think. People were left lulled for too long, while losing more and more of any equity (for those that had any) and going deeper and deeper into debt (for those that did not).
I'll keep mentioning this over and over again, because it is important I believe: It is a good thing we did not privatize social security. Anybody arguing for it after today should be tried in criminal court, together with loan officers and appraisers. |
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10/02/2008 12:10:47 PM · #254 |
Originally posted by Melethia:
Does every American home NEED 6 TVs? |
Republican Wayne Gilchrest in this article, originally posted here:
"We've become a country that sits down in front of the boob tube and listens to people shouting about freedom, but now people equate freedom not with the acquisition of knowledge but with comfort," Gilchrest says. " 'Give me my flat-screen TV, the gas-guzzling car, the goods made in China.' The whole concept of freedom has become the idea of comfort, with a complete lack of responsibility."
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10/02/2008 01:13:54 PM · #255 |
Originally posted by Louis:
Originally posted by Melethia:
Does every American home NEED 6 TVs? |
Republican Wayne Gilchrest in this article, originally posted here:
"We've become a country that sits down in front of the boob tube and listens to people shouting about freedom, but now people equate freedom not with the acquisition of knowledge but with comfort," Gilchrest says. " 'Give me my flat-screen TV, the gas-guzzling car, the goods made in China.' The whole concept of freedom has become the idea of comfort, with a complete lack of responsibility." |
From the same article, quoted a little bit down the lines:
"...the Wall Street fat cats and greed heads brought us this economic crisis, but their flimsy financial structures grew out of our collective hunger for stuff we cannot afford. "Maybe living in luxury diminishes the intellect," he says."
I see he stresses an important point that Deb also brought forth: about personal (financial and other) wisdom at each individual's level. But again, a society is made up of a dynamic mix of individuals, with different personalities, different personal goals, different philosophies. So to expect each of them to grow and value the same level of financial wisdom would be impractical I would think. Thats what the bigger administrative system (county, state, government) is for: to create and nurture an environment that minimizes the self deprecating risky individual behaviour (like getting an unaffordable mortgage).
Think about it: at home, if you start keeping things kids shouldnt have (like cigarettes, or violent games or guns - things that are known to cause harm to them).. now you dont let them have it for free, but create a system so
they can still buy those things if they have money (or reward points from good grades etc.). Sounds stupid, right? Now take this parallel to the government v/s the individuals. Somehow, it suddenly becomes acceptable.. that although you know cigarette smoking can cause cancer and increase risks for other fatal conditions, you can still go out and buy it if you have the money. You have the 'option'. Just like some people had the 'option' to buy the mortgages that are hurting them now.
In my opinion, it boils down to what 'options' one has available. In some ways, individuals are like kids: ignorant, and innocent: relying on what information the government presents to them, and choosing from the 'options' they are provided with.
So it has to work both ways: the system has to present options that are least likely to cause harm to the individuals (like regulated mortgage banking and a ban on smoking (yes I said it:-)); and at the same time, the individuals have to get smarter and choose what makes sense to them financially and intellectually.
Unfortunately, it points to the essence of a free market in the end. One cannot control the market too much (to chop off dreadful options) and still call it a free market. A family, on the other hand, is not a capitalist democracy. It is like a liberal joint dictatorship that controls what options kids have access to, yet nurturing them and taking care of them. And thats why they dont keep cigarettes for sale at home, because they dont intend to make profits out of the kids' money. They care for you;-)
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10/02/2008 01:22:58 PM · #256 |
I think the basic problem is that the "financial sector" profits are based on successful gambling, not on investing at all. A 700 point swing in the Dow is caused by people buying (selling) in a panic, betting on where the stock will be in a couple of days, not making capital investments in the companies at all.
Every speculator wants to buy low and sell high, preferably with a favorable capital-gains tax treatment. Some do, and some get screwed by doing the opposite; for everyone who makes out well in a stock trade, someone else loses out.
An investor puts in there money and figures to get it back with a reasoanable profit in a few years. As they like to say, "Over the long run, the stock market ..."
Make the capital gains tax 90% for stocks bought/sold in (held for) less than three years, maybe 40% for stock held 3-6 years, and 10% for stock held for seven years or longer and you stop this nonsense, and the speculator-gamblers will have to go to Vegas or Atlantic City like the rest of us. |
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10/02/2008 01:25:27 PM · #257 |
Oh yeah, and about the coming credit "emergency" -- essentially they are saying "lend us $700 billion or we're going to take our money and go home ..."
These people have proven they can't handle large amounts of money responsibly -- why give them any more of ours? |
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10/02/2008 01:43:20 PM · #258 |
Originally posted by GeneralE:
These people have proven they can't handle large amounts of money responsibly -- why give them any more of ours? |
Because if the American government doesn't bail out the American money machine RIGHT THIS VERY MINUTE the ENTIRE WORLD'S FINANCIAL SYSTEMS WILL COLLAPSE!! Or so I read somewhere on either CNN or MSNBC today. |
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10/02/2008 02:21:34 PM · #259 |
| Look some will lose money and some will lose their jobs. But the world as we know it will not come to an end.. In other words the sky is not falling, your dividends are. If your smart you hold tight and don't sell. It will go back up. It is a cycle. Every 30 or so years we go though what the media or government calls a crisis. Nothing new But with inflation the numbers get larger. |
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10/02/2008 02:25:46 PM · #260 |
| I always love what British media has to say about all this. |
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10/02/2008 02:31:43 PM · #261 |
Originally posted by GeneralE:
Oh yeah, and about the coming credit "emergency" -- essentially they are saying "lend us $700 billion or we're going to take our money and go home ..."
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Except they have no money to take home - they lent it all out or invested it in rapidly declining stock. |
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10/02/2008 02:59:30 PM · #262 |
Originally posted by dahkota:
Originally posted by GeneralE:
Oh yeah, and about the coming credit "emergency" -- essentially they are saying "lend us $700 billion or we're going to take our money and go home ..."
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Except they have no money to take home - they lent it all out or invested it in rapidly declining stock. |
I'm pretty sure the principles at those companies are beyond comfortably well off.
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10/02/2008 03:03:35 PM · #263 |
Originally posted by dahkota:
Originally posted by GeneralE:
Oh yeah, and about the coming credit "emergency" -- essentially they are saying "lend us $700 billion or we're going to take our money and go home ..."
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Except they have no money to take home - they lent it all out or invested it in rapidly declining stock. |
I am not surprised on how a majority of Americans in various polls have opposed the bailout plan:
The TBJ Poll
The Townhall.com poll (in the left column a bit to the bottom)
The AP Poll
I wonder who the senators represent (if not the people of America) to support the bailout plan:-)
Message edited by author 2008-10-02 15:03:57. |
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10/02/2008 03:06:22 PM · #264 |
Originally posted by Spazmo99:
Originally posted by dahkota:
Originally posted by GeneralE:
Oh yeah, and about the coming credit "emergency" -- essentially they are saying "lend us $700 billion or we're going to take our money and go home ..."
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Except they have no money to take home - they lent it all out or invested it in rapidly declining stock. |
I'm pretty sure the principles at those companies are beyond comfortably well off. |
True...they are the financially wiser ones.. unlike the law-abiding hard-working middle class who spend to fill their pockets in good ecomony, and paying out of pocket again to save 'their' stocks and hefty severences when the economy isnt that good:-)
Message edited by author 2008-10-02 15:07:16. |
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10/02/2008 03:32:15 PM · #265 |
Originally posted by Prash:
Originally posted by Spazmo99:
Originally posted by dahkota:
Originally posted by GeneralE:
Oh yeah, and about the coming credit "emergency" -- essentially they are saying "lend us $700 billion or we're going to take our money and go home ..."
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Except they have no money to take home - they lent it all out or invested it in rapidly declining stock. |
I'm pretty sure the principles at those companies are beyond comfortably well off. |
True...they are the financially wiser ones.. unlike the law-abiding hard-working middle class who spend to fill their pockets in good ecomony, and paying out of pocket again to save 'their' stocks and hefty severences when the economy isnt that good:-) |
Like the CEO of WAMU, gets hired, works for 17 days, company goes under, he walks away with $20 Million. |
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10/02/2008 03:44:26 PM · #266 |
Originally posted by Spazmo99:
Originally posted by Prash:
Originally posted by Spazmo99:
Originally posted by dahkota:
Originally posted by GeneralE:
Oh yeah, and about the coming credit "emergency" -- essentially they are saying "lend us $700 billion or we're going to take our money and go home ..."
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Except they have no money to take home - they lent it all out or invested it in rapidly declining stock. |
I'm pretty sure the principles at those companies are beyond comfortably well off. |
True...they are the financially wiser ones.. unlike the law-abiding hard-working middle class who spend to fill their pockets in good ecomony, and paying out of pocket again to save 'their' stocks and hefty severences when the economy isnt that good:-) |
Like the CEO of WAMU, gets hired, works for 17 days, company goes under, he walks away with $20 Million. |
Exactly!!
I actually worked for a company before which was almost going under... then an interim CEO was hired to 'do something' at a hefty salary and a severence contract. He stayed with us for <6 months.. and really put some cash in the accounts again. How? I lost 3 of my colleagues (fired).. and lost about a dozen more of them (part of the unit sold - they went with it). Everybody was happy then (in the exec room).. they celebrated with champagne (literally). And then the interim guy left with a huge bonus himself.
Message edited by author 2008-10-02 15:50:03. |
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10/02/2008 03:44:46 PM · #267 |
Originally posted by Spazmo99:
I'm pretty sure the principles at those companies are beyond comfortably well off. |
The principals yes, their principles somewhat less so ... |
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10/02/2008 03:59:54 PM · #268 |
Originally posted by GeneralE:
Originally posted by Spazmo99:
I'm pretty sure the principles at those companies are beyond comfortably well off. |
The principals yes, their principles somewhat less so ... |
Doh! |
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10/02/2008 05:17:32 PM · #269 |
Originally posted by GeneralE:
Originally posted by Spazmo99:
I'm pretty sure the principles at those companies are beyond comfortably well off. |
The principals yes, their principles somewhat less so ... |
Originally posted by GeneralE:
An investor puts in there money and figures to get it back with a reasoanable... |
;-) |
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10/03/2008 11:52:59 PM · #270 |
| Here is an article from the NY Times written by Steven Holmes in September 1999. Quite revealing that some saw this coming from a mile away while many in our government, both sides of the political spectrum, let this happen for political/financial gain or a flawed ideology. Hope the treasury has the printer going at max speed after the passage of that bullshit package. |
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10/05/2008 10:35:15 AM · #271 |
Keep up the good fight Hawkeye !
It's going to get rough the next couple of weeks. We could have President Obama..a four year senator that has been running for president for two years, Vice President Biden an old lib from way back and Speaker of the House Pelosi...the biggest know nothing of them all !
It'l be two long years before the people realize their mistake and clean the house and senate again.
Wow !
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10/05/2008 11:15:49 AM · #272 |
Originally posted by trevytrev:
Here is an article from the NY Times written by Steven Holmes in September 1999. Quite revealing that some saw this coming from a mile away while many in our government, both sides of the political spectrum, let this happen for political/financial gain or a flawed ideology. Hope the treasury has the printer going at max speed after the passage of that bullshit package. |
Right. I wasnt in favor of passing the bill anyways (in sync with at least 45%) Americans. I just see this as an act of desparation to show common folks like us that 'they' care. No matter what anybody says re: the wall street should be helped to save the main street etc., pumping this money isnt going to raise consumer confidence IMO. In fact someone like me would lose confidence in the government after this. I would think that if I have to chip out to cover for some billionaire's greedy loophole rides and congress and the administration's intentional support of all that (for reasons unknown but not hard to guess), some sh*t is wrong somewhere and needs to be washed away. The bill is just like a masking fragrance that hides the actual symptoms. And guess what.. if the root cause of all this is attacked, it wont be the main st houses or jobs that collapse.. it will be some mansions in the carribean losing one or two of their million dollar rides... or another tycoon having to reduce their jet usage... or that congressman having to postpone that ranch deal he so badly wanted.
The stock market works more on speculations (like somebody said here before) than on actual facts. And if the administration is involved in creating a big chaotic hype about a 'do or die' situation, no wonder the main st gets concerned about their savings and start calling their 401k managers and teh banks.. just fueling a chain reaction.
If you think about it, people had been losing houses and jobs for a few months now already. But nobody cared to look at the cause then. It was suddenly made an emergency situation when some big bucks were in danger that would pay for somebody's cosmetic surgery or another island purchase. I would say it is NOT such an urgent situation. It may be bad, but is being portrayed at a 100% magnifying scale so sme people can get what they want: save their a*ses.
Now a question for you and me: why couldnt they have let the greedy guys suffer the consequences? Just like nobody cared for the main street guys losing houses and jobs (even today the direct help is for wall st, not our pockets), why cant we have some failing banks, and have the market rebalance itself? The strength of any modern economy is its working middle class... not some fancy bank... why not empower the middle class?
This situation looks more to me like a spoiled rich brat (the wall st.) screwing up real bad.. and its family (the administration) not punishing it but taking some more money from the hard working road kids (us) and giving it to the brat.. saying: "dont worry kid..go have fun! We know where to fetch more money if you screw up again.. we are smart!"
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10/05/2008 08:57:01 PM · #273 |
Prash, it's not about consumer confidence. Here, listen to this show before you convince yourself that you understand what's going on:
//www.thisamericanlife.org/Radio_Episode.aspx?episode=365 |
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10/05/2008 10:23:59 PM · #274 |
Thanks for the link... I am listening to it right now. I trust NPR and other public radio shows (like the one you shared) more than the commercial stations. Honestly, I dont think anybody on main street truly understands what this bailout is about. I still believe a part of it also affects consumer confidence ultimately. Tell me.. would one spend as much this holiday season if they were scared to lose their job, or their house?
I am aware of the credit default swap crunch and the derivative financial products (at least the facts that I hear on radio)... and this link will help clarify it. Thanks.
ETA: This show is very informative. Thank you for sharing again!
Message edited by author 2008-10-05 22:59:26. |
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10/06/2008 11:59:29 AM · #275 |
Hey!!! The DOW is below 10,000 and the world markets are freaking!! So we pay over 3000 dollars apiece to bail out irresponsible lenders/borrowers and it's like it never made a dent?
Great job Government! You always know what's best for us. |
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