Home loan rates are the highest they've been in five years. Jobs are disappearing, we can expect another couple hundred thousand losses in the months to come. Fannie Mae and Freddie Mac may not remain standing without serious intervention, or infusion of funds. We're already in a crisis, what matters now is not sinking farther. Many blame the Fed for this crisis, and it's hard to disagree. The low interest rates beginning after the dotcom bubble burst, the complicated investments tied to mortgages, the speculative capital, wonton lending. I mean, the Fed really dropped the ball on this one. The gov'ment has hurriedly put together a relief package for Fannie and Freddie, with voting in the Senate to take place this week. This has unnerved investors to be sure, but the gov't has no choice but to intervene. If Fanny and Freddie can remain standing, the federal government may help to see us out of this mess. If not, recession here we come baby.
This is a question that's at least two years too late. The short answer is no, because the mortgage crisis is already upon us. With little in the way of regulatory oversight of the mortgage lenders who were giving money away like candy, to the i-bankers bundling these loans into investment pools, to the credit rating agencies rubber-stamping these poor quality pools with investment-grade ratings, this ship has already sailed. The questions to ask are: 1) "how messy is this going to be?", 2) "how is the federal government going to reform the oversight mess that created this quagmire?", and 3) "are they going to make a good-faith effort to prosecute the people who propagated this hysterical investment bubble upon US and international investors?". Too many people walked away from this mess laughing all the way to the bank and leaving American taxpayers to foot the bill for their malfeasance.
If it can't, we're going to have a LOT of people living under bushes - thanks to the irresponsible actions of people living under a Bush.... It seems like a black-humor joke that there's tons of deregulation and letting the children play however they will - until their play results in huge financial messes, at which time, all the deregulators run - not stroll - to get the federal government to take over and make everyone play nice in the sandbox...
So I don’t get it. Would someone please explain this to me in words we can all understand? No equations, no acronyms, no stats or predictions that are unsupported. Ground rules accepted? Here’s what I don’t understand: Where is the mortgage crisis? Why is it a crisis? Why is it a problem?
I grew up in CA. Over the past 9 years I’ve watched the prices of homes triple, quadruple, etc. I wasn’t able to buy 9 years ago (still in college), but now that I’m out and working, I find myself priced out of the market. Lots of my peers have purchased during the past couple years. I’ve chosen to sit back and wait. They signed up for loans that were 1%, 2%, etc. Lenders were clear to specify that they would vary after a certain date… Lenders may not have said it, but it’s in the loan documents my friends all signed.
So, here’s my confusion. I sat out because I didn’t feel I could afford the payments. Others felt differently. Fine. Now that people are defaulting on their loans because they aren’t able to pay for their homes, why is the government using tax money to “repurchase foreclosed homes” or help banks continue to offer low interest rates to keep these people in their homes? If you can’t afford a home, shouldn’t they do what I did? Rent. And the tax monies… since I’m a renter, I don’t have the option to write off my housing interest expenses, prop taxes, etc… I would venture to guess that I pay more tax than most home owners… isn’t it a bit unfair that renters, who pay more taxes than home owners, are not being helped (continued to be pushed out of the market) where home owners are reaping the benefits of renters tax monies?
I have a family member who works as an attorney for mortgage companies in DC. He/she tells me that the 'unpublished' news from the financial sector is very bleak and will remain so for several more years regardless of what policies are enacted to 'fix' this crisis. With the high level of fraud taking place during the happy hour of deregulation, things won't change for the better until it gets too painful for us not to do the right thing. [repeat theme for environment, disaster responses, energy policy, etc...] Hopefully by then, we will have people in government more willing to make the better (more representative) choices for the people of this nation.
Pickens is right about wind energy and congress. But he is self-serving all the way. He will have no wind turbines on his ranch because they are ugly! And folks in the Panhandle do not want water pumped from the Panhandle of Texas to Dallas. Pickens plans to use the transmission right of way to build a water pipeline to Dallas.
No. The fed should stay clear away from this. Why should the fed (reality check: ME, my taxes and money coming from me) bail out people who KNEW what they were getting into.
If you disagree, then are you implying that people are stupid? People dont KNOW that variable means VARIABLE. It means it will change. Not CAN change but WILL change.
Aside from MAYBE 1/10th of 1% of the lenders out there who were hacks and took advantage of people, the rest of these people KNEW what they were getting into. They saw visions of grandeur and huge homes and things they could NEVER probably afford in this lifetime. Now, they have a tiny mortgage payment and they lease (because why buy when you can throw it away) an SUV and have 3, 4, 5 kids when who told them to?
And you want ME to bail them out? Can you fill in the blanks here? F____ That. I think it will do these people very well to be thrown into the streets with their bratty kids and all their toys and learn a damn hard lesson. Maybe they can live out of their SUV until that is taken back.
Maybe what the government can do is go after idiots like Angelo Mozilo who most certainly bent the rules way too far and BROKE OUR ENTIRE SYSTEM. These people need to be rounded up and given to Jesse Jackson so he can castrate them. Interesting info: http://en.wikipedia.org/wiki/Countrywide#.22Friends_of_Angelo.22_VIP_pro...
You do the math. Bail out these people or find the responsible parties and sue the crap out of them and give the proceeds to those they people they screwed. The rest, well, they deserve the lesson of being foreclosed.
Life IS NOT a television show as most of these people seem to think it is.
@Dave Amphlett: People such as those who share your attitude are the NATIONAL crisis. You know, those who think the government is there to wipe your butt and blow your nose for you. They're not.
@w sumerford: Pickens only does things that will benefit Pickens. He gives nothing away.
In these troubled times, we are all worried to find a solution to the financial and energy crisis, into which we have been pushed. Our house values are going down; interest on credits is going up. We as American have to find ways to go around the financial crisis that we are in. Before we had no solution, as we had no effective tools to increase our house value. By adding income value to ones real estate, one can earn decent raise in his house value. The use of ones property as a lodging, as a ware house, a gallery or as a plug-in-station can enhance the value of ones house value. Besides the income that these small businesses generate can be very helpful to reduce debt burden, improve the standard of living. Of course there are franchise offering companies, contracts with them can shoot up the house value, but is at a very high cost beyond the reach of most of the people. Now HouseDNA.com is the first company to provide instant infrastructure and tools that allows one to start a lodging, storefront, gallery and even new services called plug-in electric station. One can open a business platform within few minutes, and housedna.com provides the tools that automatically keep track of rooms & goods availability, move orders, transactions, confirmations and even refunds. The platform empowers to solve the crisis by ourselves. it is extremely affordable, free from bureaucracy, difficult government policies, and it is friendly. Anyone is welcome to try and see if this works for him or not. If it works, then only then houseDNA.com will make charge a transaction fee from the user, for every successful transaction. HouseDNA.com is designed to allow everyone in US to list and open a business platform (business homepage).
NO. THERE IS A CRISIS OF CONFIDENCE IN THE CURRENT ADMINISTRATION. THE PRESIDENT HAS NOT BEEN ABLE TO SHORE UP LEADERSHIP AND CONVINCE THE COUNTRY THAT THE ADMINISTRATION AND VARIOUS SEMI INDEPENDENT AGENCIES THAT THEY WHAT ARE DOING ARE TO SAVE THE COUNTRY AND ITS ECONOMY.
THEIR ENTIRE 8 YEARS IN OFFICE HAS BEEN IN FORIEGN POLICY.
MONITORY POLICY HAS BEEN LEFT TO THE FED. THE ADMIMINISTRATION HAS NOT BEEN DOING ANYTHING ABOUT FISCIAL POLICY EXCEPT TO BORROW AND SPEND AT RECORD NUMBERS.
SO NO.
I do not think "we" who as members "of the Republic for which it stands" should be via our tax dollars paying to stave off the mortgage crisis.
-
I am still amazed that those to whom we trust to decide America's destiny remain committed to protecting corporate interests over the interests of the Americans who are facing foreclosure at the hands of predatory lending practices.
-
I believe the bill that is being sent on to President Bush today is designed to make the Mortgage companies even more profits rather than holding them responsible for fixing that which they have caused. Companies like Countrywide have grown windfall profits from those mortgage originations that are the essence of the foreclosure challenge. Why I and other Americans obligated to forebode prior tax priorities to bailout a situation caused by mortgage lenders is the question.
-
If I am any judge of human behavior and I pride myself for being so, I allay with emphasis most caught up in the foreclosure dilemma may be suffering depression and strong feelings of hopelessness and distrust for America's predatorily practiced lending processes. Pundits continually direct them to call their banks and mortgage companies; they don't want their houses back. I submit most who are under the foreclosure threat are so distrustful and many being mentally discouraged and depressed will never be predisposed the initiating such inquiries.
-
The following is what I suggest our law makers place into law; a program that places the onus on the mortgage companies to contact those whose payments are behind and are either vulnerable to or facing imminent foreclosure. After all, they know who they are. I would rather the government force retribution by the perpetrators than by irresponsibly spending mine and other American tax contributions.
-
I submit with vigor if Countrywide and all other holders and originators were to invite those in trouble to meet in order to restructure their failed mortgages into acceptable and affordable fixed rate loans most would not only be rescued but the industry would achieve redemption and restore future trust.
-
Why I am doubtful such an initiative would ever become a reality?; special interests!
-
Survey me right now and I will grade the Congress, the Senate, and the (what do you expect) President in the lowest of single digits for this wasted effort.
-
ARNOLD SHERR, President http://sherrent.info/AskArnie.php
The Federal Goverment didn't cause the mortgage crisis...personal greed did. I suggest those who caused this should pay the penalty...not all of us who had nothing to do with it. We are going deeper and deeper in debt for this country and it is time those who profit from unsruplous actions pay for them personally. Look at Wall Street......
The Federal Goverment didn't cause the mortgage crisis...personal greed did. I suggest those who caused this should pay the penalty...not all of us who had nothing to do with it. We are going deeper and deeper in debt for this country and it is time those who profit from unsruplous actions pay for them personally. Look at Wall Street......
The current plan will only inflate a balloon with a huge leak in it. America needs a new paradigm which confronts the effects of greed. Until we begin to elevate the severity of consequence and prosecute those who defraud the American people we will always cheat the system.
The crisis isn't something that the government can even address, much less solve. The root of the crisis is greed. Greed on the part of people who bought more house than they could afford, using an ARM to finance it, thinking that values would continue to go up, and they'd make a killing selling the house off before the ARM interest rate racheted up. There was also the well document greed of unscrupulous lenders that made money off of getting these folks to take out a mortgage, then sell the mortgage off to others.
I remember just a few years ago seeing offers for home equity loans where I could get a loan for 125% of the value of my home and thinking "Why would anyone in their right mind do such a stupid thing?". Since I had a 15 year fixed mortgage and was working to pay it off early, that whole mindset seemed foolish and foreign to me. If folks would decide that the most important financial priority is to live within their means, these sorts of things most likely would never happen.
The Feds created the problem and can't fix it using the same process that created it. Further, proposing to underwrite worthless mortgages with by printing money supposedly backed by the value of those mortgages... it's insanity! All the Feds are doing is relieving the mortgage companies (and now AIG) of debt responsibility by shifting it to the tax payers directly as "National Debt." And, the burden it is placing on the next generation will be stifling. Try getting your head around the following:
In this day and age when big numbers are bandied about daily in the news, it is easy to lose perspective of what we are really talking about. As children, most of us grew up thinking a "million dollars" was really a lot of money. Last Thursday the US government bought a failing insurance company and added a trillion dollars to the debt owed by US citizens… that’s a thousand billion! Money has lost meaning; people can’t even conceptualise a "billion" much less a “trillion”.... we don’t have any realistic idea of what "a billion dollars" really looks like or means in tangible terms!
TRY THE FOLLOWING TO UNDERSTAND "A BILLION DOLLARS"
If you had One Billion Kiwi dollars in one dollar coins and wanted to take them to the bank, here is what would be required to do it all in one trip based on weight alone.
4,583 Two-ton trucks
1 Half-ton pickup truck
And you would still have about $18,186 in pocket change left over. Also, the caravan of trucks would stretch out bumper to bumper, for 16.67 kilometers. Now a trillion dollars…. That’s a caravan of trucks 16,670 Km long or more than half way around the world.
The US national debt has grown by two trillion dollars (the equivalent of about 13.7 MILLION truck loads of Kiwi dollars) since last year alone, and the total 9.5+ trillion dollar debt is now the equivalent of about $31,600 for every man, woman and child. At 5% interest the servicing of this debt would be 47.5 BILLION dollars per year. If spread equally, that would be $6,320.00 in federal taxes annually for a family of four just to pay the interest! Of course it is not going to be “spread equally.” Talk about mortgaged futures! Tsk Tsk! Ain’t it awful!?
But wait a minute! Although we Kiwis are still only dealing in the Billions for our national debt (only about 12.9 billion as of September quarter figures), given our small population that works out to about $33,000 for every man, woman and child. Woo hoo; take that you Yanks! When it comes to turning surpluses into debts Kiwis rule!!!!!
What ever happened to “penny lollies”… or even pennies for that matter?
The government and morgage hounds get way too much credit for our economic troubles. First, it wasn't Uncle Sam or Freddie Mac who took out the loan. In many cases it was a fool-hearted sucker who wanted something they couldn't afford. Second, consumer debt comes from any one of your neighbors- maybe me or maybe you. When you hear how critical debt is to "growing" our economy and consumer debt is at an all-time high, that's a pretty good indication that this growth is NOT sustainable. It wasn't that long ago consumer bankruptcy prompted the government to revamp the law. Last, it's "We the people" who control the economy. If folks lived within their means and used common sense, this wouldn't happen. Melt the credit cards and buy a house that fits your needs and we won't see problems of this scale again.
21 Total
July 23, 2008 at 10:28am by Dave Amphlett
The federal government is the mortgage crisis!
July 23, 2008 at 11:31am by Rip Empson
Home loan rates are the highest they've been in five years. Jobs are disappearing, we can expect another couple hundred thousand losses in the months to come. Fannie Mae and Freddie Mac may not remain standing without serious intervention, or infusion of funds. We're already in a crisis, what matters now is not sinking farther. Many blame the Fed for this crisis, and it's hard to disagree. The low interest rates beginning after the dotcom bubble burst, the complicated investments tied to mortgages, the speculative capital, wonton lending. I mean, the Fed really dropped the ball on this one. The gov'ment has hurriedly put together a relief package for Fannie and Freddie, with voting in the Senate to take place this week. This has unnerved investors to be sure, but the gov't has no choice but to intervene. If Fanny and Freddie can remain standing, the federal government may help to see us out of this mess. If not, recession here we come baby.
July 23, 2008 at 1:12pm by Brian Flores
This is a question that's at least two years too late. The short answer is no, because the mortgage crisis is already upon us. With little in the way of regulatory oversight of the mortgage lenders who were giving money away like candy, to the i-bankers bundling these loans into investment pools, to the credit rating agencies rubber-stamping these poor quality pools with investment-grade ratings, this ship has already sailed. The questions to ask are: 1) "how messy is this going to be?", 2) "how is the federal government going to reform the oversight mess that created this quagmire?", and 3) "are they going to make a good-faith effort to prosecute the people who propagated this hysterical investment bubble upon US and international investors?". Too many people walked away from this mess laughing all the way to the bank and leaving American taxpayers to foot the bill for their malfeasance.
July 23, 2008 at 1:20pm by Carel Two-Eagle
If it can't, we're going to have a LOT of people living under bushes - thanks to the irresponsible actions of people living under a Bush.... It seems like a black-humor joke that there's tons of deregulation and letting the children play however they will - until their play results in huge financial messes, at which time, all the deregulators run - not stroll - to get the federal government to take over and make everyone play nice in the sandbox...
July 23, 2008 at 2:45pm by Chheang Yang
So I don’t get it. Would someone please explain this to me in words we can all understand? No equations, no acronyms, no stats or predictions that are unsupported. Ground rules accepted? Here’s what I don’t understand: Where is the mortgage crisis? Why is it a crisis? Why is it a problem?
I grew up in CA. Over the past 9 years I’ve watched the prices of homes triple, quadruple, etc. I wasn’t able to buy 9 years ago (still in college), but now that I’m out and working, I find myself priced out of the market. Lots of my peers have purchased during the past couple years. I’ve chosen to sit back and wait. They signed up for loans that were 1%, 2%, etc. Lenders were clear to specify that they would vary after a certain date… Lenders may not have said it, but it’s in the loan documents my friends all signed.
So, here’s my confusion. I sat out because I didn’t feel I could afford the payments. Others felt differently. Fine. Now that people are defaulting on their loans because they aren’t able to pay for their homes, why is the government using tax money to “repurchase foreclosed homes” or help banks continue to offer low interest rates to keep these people in their homes? If you can’t afford a home, shouldn’t they do what I did? Rent. And the tax monies… since I’m a renter, I don’t have the option to write off my housing interest expenses, prop taxes, etc… I would venture to guess that I pay more tax than most home owners… isn’t it a bit unfair that renters, who pay more taxes than home owners, are not being helped (continued to be pushed out of the market) where home owners are reaping the benefits of renters tax monies?
July 23, 2008 at 3:52pm by lexi chop
no sharing ideas
July 23, 2008 at 8:18pm by Lars Totterman
Instead of writing off the losses, banks should let their employees "work-to-own" the foreclosed homes. Any takers?
July 24, 2008 at 1:20am by Martin Bogan
I have a family member who works as an attorney for mortgage companies in DC. He/she tells me that the 'unpublished' news from the financial sector is very bleak and will remain so for several more years regardless of what policies are enacted to 'fix' this crisis. With the high level of fraud taking place during the happy hour of deregulation, things won't change for the better until it gets too painful for us not to do the right thing. [repeat theme for environment, disaster responses, energy policy, etc...] Hopefully by then, we will have people in government more willing to make the better (more representative) choices for the people of this nation.
July 24, 2008 at 7:46am by w sumerford
Pickens is right about wind energy and congress. But he is self-serving all the way. He will have no wind turbines on his ranch because they are ugly! And folks in the Panhandle do not want water pumped from the Panhandle of Texas to Dallas. Pickens plans to use the transmission right of way to build a water pipeline to Dallas.
July 24, 2008 at 9:35pm by DISCUSS GLOBAL WARMING
No. The fed should stay clear away from this. Why should the fed (reality check: ME, my taxes and money coming from me) bail out people who KNEW what they were getting into.
If you disagree, then are you implying that people are stupid? People dont KNOW that variable means VARIABLE. It means it will change. Not CAN change but WILL change.
Aside from MAYBE 1/10th of 1% of the lenders out there who were hacks and took advantage of people, the rest of these people KNEW what they were getting into. They saw visions of grandeur and huge homes and things they could NEVER probably afford in this lifetime. Now, they have a tiny mortgage payment and they lease (because why buy when you can throw it away) an SUV and have 3, 4, 5 kids when who told them to?
And you want ME to bail them out? Can you fill in the blanks here? F____ That. I think it will do these people very well to be thrown into the streets with their bratty kids and all their toys and learn a damn hard lesson. Maybe they can live out of their SUV until that is taken back.
Maybe what the government can do is go after idiots like Angelo Mozilo who most certainly bent the rules way too far and BROKE OUR ENTIRE SYSTEM. These people need to be rounded up and given to Jesse Jackson so he can castrate them. Interesting info:
http://en.wikipedia.org/wiki/Countrywide#.22Friends_of_Angelo.22_VIP_pro...
You do the math. Bail out these people or find the responsible parties and sue the crap out of them and give the proceeds to those they people they screwed. The rest, well, they deserve the lesson of being foreclosed.
Life IS NOT a television show as most of these people seem to think it is.
July 24, 2008 at 9:38pm by DISCUSS GLOBAL WARMING
@Dave Amphlett: People such as those who share your attitude are the NATIONAL crisis. You know, those who think the government is there to wipe your butt and blow your nose for you. They're not.
@w sumerford: Pickens only does things that will benefit Pickens. He gives nothing away.
July 25, 2008 at 3:39pm by jag singh
In these troubled times, we are all worried to find a solution to the financial and energy crisis, into which we have been pushed. Our house values are going down; interest on credits is going up. We as American have to find ways to go around the financial crisis that we are in. Before we had no solution, as we had no effective tools to increase our house value. By adding income value to ones real estate, one can earn decent raise in his house value. The use of ones property as a lodging, as a ware house, a gallery or as a plug-in-station can enhance the value of ones house value. Besides the income that these small businesses generate can be very helpful to reduce debt burden, improve the standard of living. Of course there are franchise offering companies, contracts with them can shoot up the house value, but is at a very high cost beyond the reach of most of the people. Now HouseDNA.com is the first company to provide instant infrastructure and tools that allows one to start a lodging, storefront, gallery and even new services called plug-in electric station. One can open a business platform within few minutes, and housedna.com provides the tools that automatically keep track of rooms & goods availability, move orders, transactions, confirmations and even refunds. The platform empowers to solve the crisis by ourselves. it is extremely affordable, free from bureaucracy, difficult government policies, and it is friendly. Anyone is welcome to try and see if this works for him or not. If it works, then only then houseDNA.com will make charge a transaction fee from the user, for every successful transaction. HouseDNA.com is designed to allow everyone in US to list and open a business platform (business homepage).
July 25, 2008 at 8:03pm by PRASHANT VARMA
NO. THERE IS A CRISIS OF CONFIDENCE IN THE CURRENT ADMINISTRATION. THE PRESIDENT HAS NOT BEEN ABLE TO SHORE UP LEADERSHIP AND CONVINCE THE COUNTRY THAT THE ADMINISTRATION AND VARIOUS SEMI INDEPENDENT AGENCIES THAT THEY WHAT ARE DOING ARE TO SAVE THE COUNTRY AND ITS ECONOMY.
THEIR ENTIRE 8 YEARS IN OFFICE HAS BEEN IN FORIEGN POLICY.
MONITORY POLICY HAS BEEN LEFT TO THE FED. THE ADMIMINISTRATION HAS NOT BEEN DOING ANYTHING ABOUT FISCIAL POLICY EXCEPT TO BORROW AND SPEND AT RECORD NUMBERS.
SO NO.
July 26, 2008 at 5:24pm by Arnold Sherr
I do not think "we" who as members "of the Republic for which it stands" should be via our tax dollars paying to stave off the mortgage crisis.
-
I am still amazed that those to whom we trust to decide America's destiny remain committed to protecting corporate interests over the interests of the Americans who are facing foreclosure at the hands of predatory lending practices.
-
I believe the bill that is being sent on to President Bush today is designed to make the Mortgage companies even more profits rather than holding them responsible for fixing that which they have caused. Companies like Countrywide have grown windfall profits from those mortgage originations that are the essence of the foreclosure challenge. Why I and other Americans obligated to forebode prior tax priorities to bailout a situation caused by mortgage lenders is the question.
-
If I am any judge of human behavior and I pride myself for being so, I allay with emphasis most caught up in the foreclosure dilemma may be suffering depression and strong feelings of hopelessness and distrust for America's predatorily practiced lending processes. Pundits continually direct them to call their banks and mortgage companies; they don't want their houses back. I submit most who are under the foreclosure threat are so distrustful and many being mentally discouraged and depressed will never be predisposed the initiating such inquiries.
-
The following is what I suggest our law makers place into law; a program that places the onus on the mortgage companies to contact those whose payments are behind and are either vulnerable to or facing imminent foreclosure. After all, they know who they are. I would rather the government force retribution by the perpetrators than by irresponsibly spending mine and other American tax contributions.
-
I submit with vigor if Countrywide and all other holders and originators were to invite those in trouble to meet in order to restructure their failed mortgages into acceptable and affordable fixed rate loans most would not only be rescued but the industry would achieve redemption and restore future trust.
-
Why I am doubtful such an initiative would ever become a reality?; special interests!
-
Survey me right now and I will grade the Congress, the Senate, and the (what do you expect) President in the lowest of single digits for this wasted effort.
-
ARNOLD SHERR, President http://sherrent.info/AskArnie.php
July 27, 2008 at 7:01pm by rick wemmers
The Federal Goverment didn't cause the mortgage crisis...personal greed did. I suggest those who caused this should pay the penalty...not all of us who had nothing to do with it. We are going deeper and deeper in debt for this country and it is time those who profit from unsruplous actions pay for them personally. Look at Wall Street......
July 27, 2008 at 7:02pm by rick wemmers
The Federal Goverment didn't cause the mortgage crisis...personal greed did. I suggest those who caused this should pay the penalty...not all of us who had nothing to do with it. We are going deeper and deeper in debt for this country and it is time those who profit from unsruplous actions pay for them personally. Look at Wall Street......
July 29, 2008 at 5:17pm by Todd Bryant
The current plan will only inflate a balloon with a huge leak in it. America needs a new paradigm which confronts the effects of greed. Until we begin to elevate the severity of consequence and prosecute those who defraud the American people we will always cheat the system.
August 21, 2008 at 11:11pm by John Sims
The crisis isn't something that the government can even address, much less solve. The root of the crisis is greed. Greed on the part of people who bought more house than they could afford, using an ARM to finance it, thinking that values would continue to go up, and they'd make a killing selling the house off before the ARM interest rate racheted up. There was also the well document greed of unscrupulous lenders that made money off of getting these folks to take out a mortgage, then sell the mortgage off to others.
I remember just a few years ago seeing offers for home equity loans where I could get a loan for 125% of the value of my home and thinking "Why would anyone in their right mind do such a stupid thing?". Since I had a 15 year fixed mortgage and was working to pay it off early, that whole mindset seemed foolish and foreign to me. If folks would decide that the most important financial priority is to live within their means, these sorts of things most likely would never happen.
September 20, 2008 at 5:11pm by Richard A. Engdahl
--
Richard A. Engdahl, Chief Imagineer, Organisational Imagineering International, Ltd., www.oii.co.nz
September 20, 2008 at 5:16pm by Richard A. Engdahl
As Al Borland would say: "I don't think so, Tim!"
The Feds created the problem and can't fix it using the same process that created it. Further, proposing to underwrite worthless mortgages with by printing money supposedly backed by the value of those mortgages... it's insanity! All the Feds are doing is relieving the mortgage companies (and now AIG) of debt responsibility by shifting it to the tax payers directly as "National Debt." And, the burden it is placing on the next generation will be stifling. Try getting your head around the following:
In this day and age when big numbers are bandied about daily in the news, it is easy to lose perspective of what we are really talking about. As children, most of us grew up thinking a "million dollars" was really a lot of money. Last Thursday the US government bought a failing insurance company and added a trillion dollars to the debt owed by US citizens… that’s a thousand billion! Money has lost meaning; people can’t even conceptualise a "billion" much less a “trillion”.... we don’t have any realistic idea of what "a billion dollars" really looks like or means in tangible terms!
TRY THE FOLLOWING TO UNDERSTAND "A BILLION DOLLARS"
If you had One Billion Kiwi dollars in one dollar coins and wanted to take them to the bank, here is what would be required to do it all in one trip based on weight alone.
4,583 Two-ton trucks
1 Half-ton pickup truck
And you would still have about $18,186 in pocket change left over. Also, the caravan of trucks would stretch out bumper to bumper, for 16.67 kilometers. Now a trillion dollars…. That’s a caravan of trucks 16,670 Km long or more than half way around the world.
The US national debt has grown by two trillion dollars (the equivalent of about 13.7 MILLION truck loads of Kiwi dollars) since last year alone, and the total 9.5+ trillion dollar debt is now the equivalent of about $31,600 for every man, woman and child. At 5% interest the servicing of this debt would be 47.5 BILLION dollars per year. If spread equally, that would be $6,320.00 in federal taxes annually for a family of four just to pay the interest! Of course it is not going to be “spread equally.” Talk about mortgaged futures! Tsk Tsk! Ain’t it awful!?
But wait a minute! Although we Kiwis are still only dealing in the Billions for our national debt (only about 12.9 billion as of September quarter figures), given our small population that works out to about $33,000 for every man, woman and child. Woo hoo; take that you Yanks! When it comes to turning surpluses into debts Kiwis rule!!!!!
What ever happened to “penny lollies”… or even pennies for that matter?
Richard A. Engdahl
September 22, 2008 at 11:37pm by Ben Hoffman
The government and morgage hounds get way too much credit for our economic troubles. First, it wasn't Uncle Sam or Freddie Mac who took out the loan. In many cases it was a fool-hearted sucker who wanted something they couldn't afford. Second, consumer debt comes from any one of your neighbors- maybe me or maybe you. When you hear how critical debt is to "growing" our economy and consumer debt is at an all-time high, that's a pretty good indication that this growth is NOT sustainable. It wasn't that long ago consumer bankruptcy prompted the government to revamp the law. Last, it's "We the people" who control the economy. If folks lived within their means and used common sense, this wouldn't happen. Melt the credit cards and buy a house that fits your needs and we won't see problems of this scale again.