It's the economy.....looking for opinions from financial experts

  • metta

    Posts: 39118

    Aug 27, 2010 6:46 AM GMT
    I don't think that we have ever had a healthy recovery from a recession without the growth of new housing. And I just don't see the possibility of that happening for a very long time because of the inventory that mortgage investors are holding onto.

    I'm no financial expert, but I would love to know how we are supposed to see the economy grow without the housing industry growing. And I don't see how this is possible right now with banks holding onto 7.5-8.5 years of inventory. I mean, I could see the government do something to create a bump in sales but I have not seen anything to fix this mess more quickly than it taking at least 8 years more.

    Does anyone know what we are planning on doing to deal with this?

    I have an idea...but I don't know if would work. I was wondering if there are any financial experts here that may be able to figure out if this might help.

    I was thinking that we could have the financial industry form a new kind of real estate trust that would encourage people to invest in them with some kind of insured guarantee of a minimum annual return of 1% but a realistic estimate much higher of maybe 5% or more, which I think would be pretty good right now for a guaranteed return product....especially when looking at what short term cd's are getting right now. The government could offer special tax advantages to investors. With them being guaranteed minimum returns, I think that it would encourage institutional and retirement fund investment into them.

    The trust wold purchase properties that banks are holding onto at a substantial discount that would make it a safe enough investment for investors. Now I'm not sure how banks would be able to deal with loss on their books. Maybe the government can figure that out. The trust would fix up properties and rent/lease them out, while allowing them to sell no more than an average of 10% of their holdings per year.....less than 10% the first couple years and a gradual higher percentage as time goes on. The eventual goal would be to sell all properties in no more than 15 years.

    This would take away the problem of mortgage companies holding onto properties that they don't know what to do with. It would help to stop the decline of property values by controlling how many properties are released per year. Designed properly, this may give a chance for the housing industry demand to grow again and help them to be able to estimate demand better because they can see how many properties these trusts can release each year.

    It may be a crazy idea....I really don't know...but I have not seen anyone really come up with solutions that will get us out of this mess more quickly.

    Is there a plan to get us out of this mess quickly and safely?
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    Aug 27, 2010 4:04 PM GMT
    In my humble opinion (which is not the one of a financial expert) there is no "safe and quick" way to get the US out of this.

    Right now, I really believe that what is needed and what will eventually happen, is a complete re-appreciation of wealth. This means that every single American who bought himself into the middle class by credit-fueled consumer spending (including real estate) has to fall out, default on debt, have their home seized, be evicted, etc, while the total value of the economy is readjusted as to the *real value* of the GDP.

    There might be some other bears on the road, like this one: http://theeconomiccollapseblog.com/archives/it-is-now-mathematically-impossible-to-pay-off-the-u-s-national-debt


    But overall, I think it's inevitable that a lot of people will lose their houses and will have to start over as part of the lower working class. As sad as that may be, the truth is that many people just don't add that much value to the economy as they think they do (ie less than their cost).

    So the "double dip" is very real I think - compare the government measures with a fire extinguisher spraying a fire, but now the extinguisher is empty, and the fire flares back up.

    A real adjustment is needed, the US economy needs to shrink down to its real value - and after that, we all need to stand up, dust ourselves off, get to work, start a business, and make money again. Real money, not borrowed money.
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    Aug 27, 2010 7:25 PM GMT
    There is a lot of truth to what Tazo is saying. While I am not a financial expert, I don't believe that our recovery is going to be dependent on the housing market to spur job growth.

    While it is tough times out there, there is still growth in the US economy, granted really small growth, and to rely on the housing market again is going to cause the same effect. The housing market never really did spur the economy in the first place, because people were buying outside of their means, instead it bubbled up a false economy, much like the dot com burst.

    Companies will start hiring employees again, it takes time. The economy does not recover over night, and a recovery will be seen when consumers have more faith, and spend. Companies only hire more employees when there competition is doing the same. They will do it to expand their products and market to keep up.

    As with a guaranteed fund in real estate, the question is who will guarantee the fund? The US government? An insurance company?

    People will find jobs, and they will buy homes because the prices are cheap, there wouldn't be a realistic way to guarantee a REIT as it takes out the risk. There would have to be less returns to compensate for that.
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    Aug 27, 2010 7:31 PM GMT
    Tazo995 saidIn my humble opinion (which is not the one of a financial expert) there is no "safe and quick" way to get the US out of this...

    So the "double dip" is very real I think - compare the government measures with a fire extinguisher spraying a fire, but now the extinguisher is empty, and the fire flares back up.

    A real adjustment is needed, the US economy needs to shrink down to its real value - and after that, we all need to stand up, dust ourselves off, get to work, start a business, and make money again. Real money, not borrowed money.


    Your overview sounds much more expert than the "we're on the right path" crap coming from Washington.

    A double-dip recession is one of the more optimistic forecasts. The Future Trends guy, Gerald Celente, is predicting a depression worse than 1929, with civil unrest. Hyperinflation, caused by the trillions in funny money being created out of thin air in Washington, will wipe out savings.

    Solving this problem requires an understanding of what got us here. This is a debt crisis. Trying to solve it with more debt and more government (as Obama-Pelosi-Reid-Bernanke are doing) is the snake oil of statist idiots.

    Two bubbles burst - a credit bubble and a housing bubble. Only federal government policies can create such bubbles. Now both the credit market and the housing market are in shambles.

    The last thing needed is another expansion of government to correct the problems caused by excessive government.

    Nothing destroys wealth like big socialist governments. And nothing would turn the economy around like a big across-the-board reduction in the monstrous size, spending, and debt of the federal government. That can only happen if the voters start to kick ass in November.











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    Aug 27, 2010 7:54 PM GMT
    I will preface by saying I am not a financial expert, but I am a 4th year Economics student at a well-respected DC University...I can tell you what we have been led to deduce throughout the crisis and I will preface by saying that no one can say with absolute certainly what the future holds, and there is no quick way out....we are looking at 4-5 years before any sort of normalcy will be achieved.

    The housing market is a big problem in this country, but it won't have to be the seed that sprouts a new recovery this time around, simply because it has fueled past recoveries. We have two fundamental issues moving forward, one of which is the extremely high unemployment rate that we are dealing with, and the second is a fundamental reorganization of the American economy that is taking place, and will continue to take place in the coming years.

    I'll speak to unemployment first. We have a median national unemployment rate of 9,5%, high, but it gets worse. Employment among young people, including those graduating university stands at 26,1%, meaning that the people best prepared to sustain a long-term recovery are precisely those who cannot find work. In addition, Involuntary PT workers (those who cannot work full-time due to economic conditions) has been very high, but is now experiencing a slight decline as employers beef up hours before hiring new positions. Finally, those "marginally attached," to the workforce (people willing and able to work, but discouraged and not actively searching for work) rose to 2,3 million in July, up nearly 15% from a year earlier. While 9,5% sounds bad, the real problem is that jobs are being created for the wrong people. Yes, debt will be paid off by those older workers, but what we really need is an uptick in monetary velocity, or the amount of times money changes hands in the economy, in order to sustain a monetary multiplier effect, and thus the beginning of a recovery. Paying down debt does not create that multiplier, because its money that has already been "spent." I'm not advocating more borrowing, but I am saying that in order to experience real recovery, we have to get money to those who will spend it, younger people with fewer debt obligations (obviously student loans are an exception) and are in a position to buy more goods and services. That in turn will cause an increase in aggregate demand, and after a lot of economic domino-effect, we will see both higher productivity and an initial increase in the unemployment rate due to discouraged workers returning to the job force, and a subsequent decrease in the unemployment rate as new hires take positions. Once people have jobs and are financially secure, we will see real economic growth

    Now lets look at housing and economic restructuring. Since WWII, our government has prioritized home-ownership as the path to financial prosperity, offering generous tax-benefits to homeowners. Yet, our homeownership rates in the US are comprable (~50%) to other developed nations that have not taken such steps to subsidize homeownership. Additionally, with the advent of home equity loans and second morgatages, houses effectively became liabilities rather than assets, because the risk of a fall in price was always present, if only minimal. Due to the housing and financial crisis, prices fell, and the backbone of american wealth building suddenly failed. Housing supply has outsized demand, and because of that we will see a protracted period of a "rent advantaged," housing market. The new american economy is going to be characterised by a decrease in private consumption as a percentage of GDP and an increase in capital investment as a percentage of GDP. Savings rates will increase and private debt will decrease. Taxes will increase and public debt will decrease (we can only hope). It will be the pent up capital investment demand that has been put off during the crisis, everything from commercial plant openings right down to durable goods orders (home appliances, cars, etc.) that will create the upturn.

    Sources: Employment Statistics come from US BLS Employment Situation Summary

    Phew...thats long...i get a little excited by econ..i may be a little bit of a closet econ nerd icon_redface.gif
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    Aug 27, 2010 10:31 PM GMT
    I am currently Director (they do not want to give me the title "President" because we have one president who reports to our owners) of financial operations for an equity company based in Dubai. I won't go into detail, but I will focus on why we are in Dubai and respond to the OP's post.

    The equity was brought up around 5 years ago when it had become obvious the U.S. was headed for a stagnant period not unlike what Japan has experienced. This has come to pass in our view because we have an ever increasing state and federal spending pattern, as well as increased drag due to borrowing (that debt must be serviced) and tightening tax regulations that pull capital away from investment. Other factors come into play such as the ever increasing inability of people on the bottom of the ladder to be able to for themselves within a flow of funds from government entities. In the U.S. this is not specific to political party. Both Dems and Repubs are guilty.

    What the OP proposes is to spur the real estate market by effectively removing inventory. Removing inventory will not per se increase sales. It would perhaps slow the fall in home prices. What is directly effected is removing frozen capital from banks. Not something they exactly need at the moment due to re-aligning lending with debtor's ability to pay. (If there is anything at all positive to have come out of the recent financial crisis it is that artificial support of debtors who could never have payed mortgages for whcih they were approved to begin with.)

    The mechanic's of the proposal are also something that would drive the ability to bring this to pass. If you follow the OP's proposal, you would only receive revenue from say 10% of homes removed from banks, yet you would be servicing debt on the oustanding capital at perhaps a 5% rate of interest. To make matters worse, you would balloon the capital required and debt to service due to the need to "spruce up" and market these homes.

    Of course, many would say, "hell, let the government do it." Well, government at the moment -- the U.S. government that is -- spent or tied up borrowing all your money years ago. It has none.Anyone with any sense at all has along ago moved what they earned elsewhere.

  • metta

    Posts: 39118

    Aug 27, 2010 10:51 PM GMT
    ^
    Thank you...

    Off-topic: I find it interesting that they chose Dubai considering the financial problems that Dubai has been having. I have heard that South Korea, Vietnam, Chili, and Singapore were some of the better places for growth. I don't know if that is still true. But maybe choosing Dubai had to do more with the type of investments.
  • swimbikerun

    Posts: 2835

    Aug 27, 2010 11:30 PM GMT
    Corporations have outsourced our collective industrial base and all the mot innovative technological expertise follows. The middle-class has collapsed and there's nothing for the country rebound to.
    It'd be great to see a challenge issued by the White House to spur green technologies as miniaturization was done for the Space program.
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    Aug 27, 2010 11:38 PM GMT
    They have a program already in place. TALF and PPIP.
    When the government expanded its balance sheet to put money into the economy it bought commercial and residential mortgage backed securities from banks and incented private capital to purchase it. In other words, you would be buying these along with the goverment. So they tried to attract investors with the notion that the government is probably not going to lose, so you might not either!

    I am not going to type the details, you can find more here:
    http://www.financialstability.gov/roadtostability/publicprivatefund.html

    TALF

    http://www.newyorkfed.org/markets/talf_faq.html#3

    Mortgage companies do not hold houses or mortgages on their balance sheets. They sell them to either banks, investment banks, investment vehicles, private investors, REITs, pensions, or the GSE's (Freddie, Fannie if they fit certain criteria for size and credit requirements)

    So, the program you describe has already been attempted in terms of removing many of the "troubled" assets in TALF, and the issues that were brought to market were subscribed to by wealthy investors, but the results were underwhelming. Many banks still hold mortgages because they make interest on them. It is how they are in business.

    But if you were a wealthy investor, and did have the capital to try to get a kicker of a better return, as you say, better than CDs, in buying these securities, (note the FDIC is backing a portion of this program, so good work you did in your thinking...because without guarantees, I doubt anyone would have bought these "troubled assets") Seriously, would you? Esp. if people are increasingly walking away from their obligations because the media has convinced them that it is OK to do that because the banks created a mortgage with an adjustable rate and they could not figure out that an adjustable rate mortgage -ADJUSTS!

    I don't think that I would buy anything like that without the government backing up any and all losses. Would you buy this when everyone is calling for the system to destroy itself? When defaults could increase? Does not sound like too much of an incentive...especially when the risk is still high for people to walk away, and it is a taxable return. In the meantime, also consider that the tax cuts that the fed is letting expire (we'll see what actually happens by year end)

    I was going to go on a date with a guy who suggested that we go to a movie, have dinner, have drinks. I just told him that I would rather have a cup of coffee and a walk through central park. He is the proud owner of a home in CT that he has two mortgages on and is probably going to walk away from. I assume that the second mortgage is his budget for entertainment expenses. Again, would you buy securities backed by "homeowners who don't get it?"

    the municipal debt market in and of itself is ten times that of the stock market and wealhty investors have been actually buying munis because certain general obligation and essential service revenue bonds are tax exempt and generally are obligations that must be repaid and also insured in many cases.

    Capital was free flowing for a long time with low rates and until capital again becomes scarce (higher rates) and the credit contraction takes its course, it is going to remain difficult.

    In my opinion, the most important thing that is missing in this economy is jobs and the longer we wait to create them the more defaults we will see and the more payments on home mortgage debt and consumer credit and credit card debt will fall short creating worsening problems for banks, and ultimately the taxpayer because bankruptcies are paid for by taxpayers. Also, keep in mind that about 5% of GDP is housing, but housing kind of needed to fall. There is actually a bond manager that says "knock em down" as the solution to getting rid of inventory, and as crazy as that sounds, I agree. Make way for energy efficient new homes.

    Incidentally, those who are saying let the banks fail are really saying let themselves and us all fail. It is a shame that people don't understand how the nature of capital effects us all. It also does not help that those who got in debt through their own will are now walking away from it because they were somehow coerced into borrowing by the evil dirty filthy banks that made them get into debt. It also does not help that people think that reform needs to come in terms of regulations that are already in place, and have been for years, yet real estate agents can get licensed in a week and tell people that housing will go up forever, and homes are not sold with a prospectus. Why?

    For those that do not believe that things do in fact trickle down, this may educate them. Those who blindly feel that letting the financial system collapse will make us better off are just plainly mistaken. When Greenspan lowered interest rates it created a global debt bubble the size of which is about 40% of income to service debt payments. That's right, globally, 40% of income is going to debt service. Every major curriency is pegged to the dollar, (except China) so record amounts of debt was created worldwide.

    We need jobs, higher income, or extremely high productivity which could come from scientific or innovative breakthrough. If that happened we would earn our way out of this and the current debt levels would seem smaller over time. Basically, inflate our way out of this mess, but the catalyst for that remains unseen. In the 1980's we had a similar situation, we actually thought JAPAN of all places was going to take over the world, kind of like we feel Asia will today. What was the catalyst in the 80's that gave us the most sucessful bull market of all time? Credit. Credit expansion is why we are here.

    I am not a republican, by the way, so please don't think I am speaking in political terms, but job creation will allow people to pay debt, but being anti-business will destroy more jobs.

    I think we will see step ups in incenting small business to hire this November, but that remains to be seen.



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    Aug 27, 2010 11:40 PM GMT
    jetsetseth said


    I like your post.

    Oh btw I'm surprised nobody has brought up the comparison between Germany in the 1920s... hyperinflation that wiped out whatever wealth was left after WWI and eventually gave rise to the nazis.

    It seems to be popular to "warn" for civil unrest, semi-revolutions, riots, etc etc in the US because the economy is so bad. So I think that's bullshit, countries don't descend into anarchy *that* fast, and especially a militirized country like the US (with way to many people working for all kinds of enforcement agencies)

    but

    if the real hyperinflation hits, that you will go to your local bakery with a stack of 100 dollar bills (like in 1920s Germany) then we're gonna have some real shit hitting the fan.
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    Aug 28, 2010 12:19 AM GMT
    Tazo995 saidIn my humble opinion (which is not the one of a financial expert) there is no "safe and quick" way to get the US out of this.

    Right now, I really believe that what is needed and what will eventually happen, is a complete re-appreciation of wealth. This means that every single American who bought himself into the middle class by credit-fueled consumer spending (including real estate) has to fall out, default on debt, have their home seized, be evicted, etc, while the total value of the economy is readjusted as to the *real value* of the GDP.

    A real adjustment is needed, the US economy needs to shrink down to its real value - and after that, we all need to stand up, dust ourselves off, get to work, start a business, and make money again. Real money, not borrowed money.


    You started off okay. But why is your focus entirely on the lower and middle-classes? What about the equally blind and stupid bankers who sold everyone on a mirage? Shouldn't they have their ill-gotten gains seized as well? Shouldn't those banks be allowed to fail so that other, more prudent institutions could take their place. Isn't that free-market, free enterprise?

    Your perspective is extremely unbalanced.
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    Aug 28, 2010 7:23 AM GMT
    At the risk of possibly over simplifying things, I think what we need is a change in mindset and increase in common sense across the board from elected politicians to every citizen in the United States.

    What is clearly lacking in the US today is what I would call financial literacy and an accompanying sense of financial responsibility and accountability to onself.

    I think what fundamentally went "wrong" in the real estate boom and debt fueled spending binges of the recent decades was people thought less about what they could afford and instead based decisions on what they thought they "deserved".

    The choices were made on an emotional basis not a practical basis.

    They tended to think "I am a good person, I work hard, I deserve that SUV or I deserve that McMansion" and "of course the bank wouldn't lend me the money if they didn't think I could handle it".

    What they did not stop to ask themselve was can I afford this?

    Did people even understand how to determine affordability?

    In addition, people linked their idea of self-worth to things they possessed instead of aspects of their personality. They wanted to "look" like a good person with the right flashy assets instead of being a good person

    I think a lot of people did not have, or ignored any financial literacy they may have had. They did not grasp the impact of their decisions and that is no ones fault but their own. The idea of predatory mortgage lending is laughable. It is your responsiblity to ask questions. if you don't fully understand a contract....don't sign it....walk away...dont worry about what the mortgage broker thinks of you or the car dealer thinks of you, or the guy at best buy selling you the plasma tv thinks of you...just walk away and only come back when you understand everything

    Last year there was a story in the newspaper that sort of highlighted this for me, I don't recall the details exactly but it went something like this. There was a police officer and he and his wife, a school teacher, were fighting to "save" and stay in their $1.2 million home. Due to resets and some of the terms of their original mortgage their payments were going to jump to a level that they could not afford.

    My perspective is that no one should be helping them stay in house they should have never been able to purchase to begin with. The combined salary of a cop and a school teacher just can't cover the mortgage on a $1.2 million home.

    This is not intended to be an indictment of their career choices, however it goes back to the idea of affordability not whether or not someone "deserves" a nice house. Both people had admirable professions and you could make the arguements about needing to develop affortable housing, but that is an all together different solution than having someone take on more debt than they could realistically afford.

    A few years ago, NPR had an interview with a Harvard bankruptcy professor, I think it was Elizabeth Warren and she highlighted a few things.

    The things that get people into financial troubles today are not the $5 Starbucks lattes or the purchases of DVDs and iPods. The thing that gets people into trouble is the amount of income that goes to covering fixed amounts like mortgage and car payments. Over time the % of someone's salary dedicated to housing and car payments had gone up. This does two things 1) it prevents people from saving and 2) when there is a disruption due to job loss or other hits to wages, people can not quickly adjust their spending. Sure they can cut out some things like eating out or buying clothes, however they can't make the same change to the fixed portion of their expenses like mortgage and car payments as quickly or in some cases, at all.

    She also noted that 20-30 years ago banks had a more limited range of mortgage products. Things were pretty straight forward driven by your income and the size of your downpayment. The banks did not let people get in over their heads and the amount of income people directed to mortgage and other fixed debt was lower. The reason for this was that banks tended to hold on to the mortgages they originated so they applied very strict standards to avoid losses.

    The other thing she noted was that families tended to live on the income of one spouse, typically the father. Therefore, if something happened to the father's income the mother could pitch in and help out and meet the mortgage. In a sense, a relief worker. What has happened since more and more women have entered the work force, the flexible capacity of the second wage earner is no longer around to supplement and is instead now assumed to be necessary for the family to have the lifestyle they want.

    Women entering the work force did not increase savings and wealth, it seemed to just bid up the cost of living. Elizabeth Warren went to great lengths to not sound anti-feminist and I hope I am communicating that here. What she expressed was not about the decision to enter the work force, rather it was about how that income was redirected.

    I think the long term solution is to not bail people out. Values rise and fall and although some people may be under water, that is only a problem if they are going to sell now. If they can meet their mortgage payment, they should keep on paying it. In time they may get back to a point where they break even.

    I think in the case of people who are only missing their mortgage payments by a small margin, there should be some sort of work out situation in which they refinance into a fixed rate mortgage with a longer term. In addition, there should be some financial covenants that go along with the new mortgage.
    1) No home equity withdrawals until the new mortgage is paid off.
    2) A limitation but not outright ban on any and all additional indebtedness. Anyone who gets the new mortgage should not be able to run up credit card debt or incur obligations that compete with the ability to make the mortgage payments.
    3) Any federal or state tax refund should be used to pay down additional principal on the new mortgage as it becomes available.
    4) As the person's income goes up, a fixed percentage of their after tax income should be dedicated to increasing payments or additional early payments of the new mortgage. So for example, if in 10 years someone's after tax income has increased by 15%, their mortgage payment should increase by the same amount.

    For people like the cop and school teacher mentioned earlier, they should just lose the home. There really is no way to restructure their debt so that they can afford to stay in the house. Again, this is not a statement on their worth as people, it is all about affordability.

    I think financial literacy should be taught in schools with some other life skills sorts of things like

    what is an rental lease?, what is a general contract?, how do I make a budget?
    how do I keep track of what I spend and what I owe? how do student loans work?
    what is life insurance? what are health benefits? how does compounding interest work? what is retirement planning and how much do I have to put away?

    Finally, a word to the folks bashing the banks. Yes the banks and mortgage brokers had a role in the mess, but they were not the only people who benefited. When you think about it, the money they made was a fraction of the money that flowed around the system. The only got a piece of the action, similar to fees collected on transactions.
    So you may ask, where did the money go? It probably went to regular people that you and I know. I have some friends and family members who made lots of money selling their houses during the boom. These people were not speculators or flippers. They just got lucky and sold close to or near the top and pocketed it. Do you want to go after them?
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    Aug 28, 2010 2:22 PM GMT
    QUOTE AUTHOR GOES HEREFinally, a word to the folks bashing the banks. Yes the banks and mortgage brokers had a role in the mess, but they were not the only people who benefited.


    Another apologist for the banks. A role? They were the main proponents AND beneficiaries, by far, of the whole mess. And they're not having to face any kind of accountability - just the opposite. Where have you been?
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    Aug 28, 2010 3:16 PM GMT
    freakofnature said
    QUOTE AUTHOR GOES HEREFinally, a word to the folks bashing the banks. Yes the banks and mortgage brokers had a role in the mess, but they were not the only people who benefited.


    Another apologist for the banks. A role? They were the main proponents AND beneficiaries, by far, of the whole mess. And they're not having to face any kind of accountability - just the opposite. Where have you been?


    Lets walk through a hypothetical example.

    Granny Jones buys a house in 1966 for $35,000. In 2006 Granny Jones decides to retire and move to a smaller place in another city close to her children. Fortunately for Granny Jones its the highest point in the local real estate market and she sells her house to Bob and Betty Smith for $650,000. Bob and Betty Smith get a mortgage that they can barely afford from Mega-Bank. Mega-Bank lends them the money and later resells it through a securitization mechanisim to a group of investors.

    Four years later the house is now worth $300,000 and Bob and Betty are under water.

    Now we can take the scenario in two directions. Bob and Betty continue to pay the mortgage even though the house is worth less than they paid (a lot less) or we can use the scenario where Bob and Betty walk away.

    In this scenario, Granny Jones made a huge profit, the real estate agent in the transaction made a profit, the bank originiating the loan made money on fees and possibly acting as servicing agent for the mortgage (processing payment etc). However, all of the fees and commissions pale in comparison to the profit made by Granny Jones. The $350,000 "loss" due to a decline in the house's price will be either borne by Bob and Betty or the investors who hold their mortgage when they walk away, if they walk away. All of that $350,000 loss is now profit in Granny Jones's bank account. Would anyone ever suggest going after Granny Jones to recover that money. Nope she benefited and nothing she did was illegal.

    Unless you can prove outright fraud, no one, including the banks, did anything that was illegal. You can't make a law and hold people to it after the fact, you can only hold them to it on a going forward basis.

    This may be frustrating and contrary to your idea of "accountability" but its the way things work

    Bashing the banks is convenient and meant to distract from what was probably a poor decision on the part of Bob and Betty to buy the house in the first place. No one forced Bob and Betty to buy the house or forced them to get a mortgage they could not afford.

    I agree with the idea that there needs to be reform, companies that originate mortgages should have to hold on to them because this encourages more prudent lending standards.

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    Aug 28, 2010 3:34 PM GMT
    freakofnature said
    QUOTE AUTHOR GOES HEREFinally, a word to the folks bashing the banks. Yes the banks and mortgage brokers had a role in the mess, but they were not the only people who benefited.


    Another apologist for the banks. A role? They were the main proponents AND beneficiaries, by far, of the whole mess. And they're not having to face any kind of accountability - just the opposite. Where have you been?


    Actually, the people who flipped homes benefitted the most. Banks have largely paid back what they were forced to take from the fed. Two banks refused TARP, in case you didn't know. It was the fed's way of getting involved in the banks business to find out what they had on their balance sheets.

    Of the major banks, and TARP beneficiaries, Citi, GM, and AIG (insurer) are left to pay back. The payback is actually showing that the fed will make a net profit from the resale of Citi shares in the open market which is nearing completion. No one is seemingly aware that even though at one point it looked like we may show a 10 billion dollar loss on TARP, that Obama said that there would be a tax to the large banks over the next ten years to pay back every penny.

    http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748703509404575300502253092016.html

    Other perspective:

    Katrina cost a full $200 billion (not a loan)
    the wars have cost 1 trillion (not a loan)
    http://costofwar.com/
    If you further read TARP you will see that real money is actually being spent and perhaps even wasted on a variety of different pet projects. (not a loan)


    So if you are angry, I am sorry to say that you might want to consider redirecting it to the real problems. Using banks as a whipping post is only going to further stall the economy, but by all means go right ahead, everyone else seems to want to do it. When everyone is out of work because our financial system collapses, then I hope everyone is happy with what they wanted.

  • Posted by a hidden member.
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    Aug 28, 2010 4:09 PM GMT
    southbeach1500 said
    jockfever said
    Nothing destroys wealth like big socialist governments. And nothing would turn the economy around like a big across-the-board reduction in the monstrous size, spending, and debt of the federal government. That can only happen if the voters start to kick ass in November.


    Correct.

    Now, why is this topic in the "Dating" forum?


    It's not in the "Dating" forum, Fagmire.

    Your comprehension skills are lacking.
  • Posted by a hidden member.
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    Aug 28, 2010 4:52 PM GMT
    southbeach1500 said

    Oh, and just a reminder about Forum Rule #1:

    Our most important rule: Do not use any hate language in forums.


    ...said the worst offender here at RJ.

    Oh, Fagmire...I don't hate you. I just have no respect whatsoever for your nasty ass.

  • Posted by a hidden member.
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    Aug 28, 2010 4:53 PM GMT
    southbeach1500 said
    OtterJoq said
    southbeach1500 said
    jockfever said
    Nothing destroys wealth like big socialist governments. And nothing would turn the economy around like a big across-the-board reduction in the monstrous size, spending, and debt of the federal government. That can only happen if the voters start to kick ass in November.


    Correct.

    Now, why is this topic in the "Dating" forum?


    It's not in the "Dating" forum, Fagmire.

    Your comprehension skills are lacking.


    Ummmm.... It sure is:

    DATING, SEX, AND RELATIONSHIPS



    It depends on how you access the thread:
    FORUMS > General Discussion

  • Posted by a hidden member.
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    Aug 28, 2010 7:19 PM GMT
    southbeach1500 said
    jockfever said
    Nothing destroys wealth like big socialist governments. And nothing would turn the economy around like a big across-the-board reduction in the monstrous size, spending, and debt of the federal government. That can only happen if the voters start to kick ass in November.


    Correct.

    Now, why is this topic in the "Dating" forum?


    I think metta was trying to hide from the partisanship that has taken over the News section...some are more to blame than others...icon_cry.gif

    Have you noticed that people's posts here are much more civil until you came along? And don't tell me it's OtterJog's fault, because he just got sucked into the vortex.

    Anyway, sorry for the interruption, metta8, carry on.
  • Posted by a hidden member.
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    Aug 28, 2010 8:15 PM GMT
    xuaerbWe need jobs, higher income, or extremely high productivity which could come from scientific or innovative breakthrough. If that happened we would earn our way out of this and the current debt levels would seem smaller over time. Basically, inflate our way out of this mess, but the catalyst for that remains unseen.


    That's why I was so unhappy about the ruling on stem cell research.

    I'm not an expert, but this week's TIME emphasized that part of the humongous stimulus bill was Obama's agenda of starting to wean us from traditional energy sources and promoting renewable energy's market share. It made a good point about how none of it would have been done without the stimulus (e.g. the companies making smart batteries would have just gone overseas to do it). Whether the stimulus is going to be a success will be answered in 10 years, not now, but people can only see short term, and that's unfortunate, both for it and the new health care laws.
  • Posted by a hidden member.
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    Aug 29, 2010 3:33 PM GMT
    [quote]So if you are angry, I am sorry to say that you might want to consider redirecting it to the real problems. Using banks as a whipping post is only going to further stall the economy, but by all means go right ahead, everyone else seems to want to do it. When everyone is out of work because our financial system collapses, then I hope everyone is happy with what they wanted.

    [/quote]

    It's not about emotion. Banks and other large institutions, despite their shady dealings, were the beneficiaries of public largesse to save their asses, as you note. People who were unfortunate enough to get over their heads in tricky mortgages were put out of their homes.

    And in case you haven't heard, the system did partially collapse (it's called a recession) and many people are now out of work.
  • Posted by a hidden member.
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    Aug 29, 2010 5:28 PM GMT
    southbeach1500 said
    q1w2e3 saidHave you noticed that people's posts here are much more civil until you came along? And don't tell me it's OtterJog's fault, because he just got sucked into the vortex.


    Well, of course when there are a group of like-minded liberals and no other differing viewpoints presented, all will be in harmony, especially here in the "tolerant" and "inclusive" world of RJ.

    All I've posted here was this:

    southbeach1500 said
    jockfever said
    Nothing destroys wealth like big socialist governments. And nothing would turn the economy around like a big across-the-board reduction in the monstrous size, spending, and debt of the federal government. That can only happen if the voters start to kick ass in November.


    Correct.

    Now, why is this topic in the "Dating" forum?


    I'm not the person who started topics demeaning a specific RJ member / small minority of RJ members who are conservatives:

    ***CONSERVATIVE TREE FORT ALERT***

    ACTUAL DIALOGUE FROM THE TREE FORT!!!









    wahmbulance.jpg?1252544974
  • CSPYNY

    Posts: 187

    Aug 29, 2010 5:48 PM GMT
    Recovery isn't going to happen. There's just too much going against us right now.