The New Aristocracy At work

[Hawk]

Here is how it was:

The mortgage company was responsible to qualify the borrower. If the borrower could not afford the mortgage, he did not get the loan.

Here IS how it is now, ever since the amendment was added by Phil Graham.

The mortgage company can talk you into a loan you cannot afford because they can sell it to Fanny Mae and Freddie Mac, Government backed . So even if the borrower defaulted (which the mortgage company new would happen) they still got their money because they already sold the loan to YOU.

Then when all of the loans failed, Bush and Congress were forced to bail them out.

I want to go back to "HOW IT WAS" ! So does Obama. McCain want to keep it as it is now.

[MeYatch]

why are bush and congress "forced to bail them out?"

Can we not just allow these people to go live in a gutter, or shrivel up and die?

[Hawk]

why are bush and congress "forced to bail them out?"

Can we not just allow these people to go live in a gutter, or shrivel up and die?

That's a great question.

If the people loose their houses and don't pay anything, the banking industry could collapse and many people who have investments through those banks, through no fault of their own, will loose all of their money. Creating further and greater economic woes for the country as a whole.

It's not about letting those people keep their homes, it's about the people who would loose everything just because their money is in the system, even though they are not among the borrowers.

And I believe all attempts are being made to have many of the borrowers take out new loans that they can afford to pay. We are not giving homes away. We are preventing the collapse of an industry that is important to everyone.

[MeYatch]

would it not be possible to resell the houses that these people have defaulted on?

[Blue Reality]

two things....


Hawk you are at it again. MacCain has parted ways with Graham and they are no longer connected. You're simple statement that McCain doesn't want option C is ridiculous. You're arguments are ridiculous.

MeYatch, banks do resell those homes, but with each foreclosure a bank loose tens of thousands of dollars. In this market home prices had fallen so much that banks couldn't recover the value of the homes from the start. That's why the losses totaled in the billions and put such a strain on the country's financial system.

[lonewolf]

Here IS how it is now, ever since the amendment was added by Phil Graham.

Who is Phil Graham? Is he related to Billy? What is this amendment he was supposed to have added?

[songsmith]

Lonewolf...
I was thinking about my math in this thread last night, and sat bolt upright in bed... and you are right to a certain extent. The overall profit numbers I used assumed that all Big Oil profit comes from gasoline, which is of course, wrong (they're raping us WAY more on diesel and fuel-oil). I hate being wrong and/or stupid, but admitting it is part of the deal.
Still, profit means money you have left after everybody else gets theirs, and they made more than anyone ever has. Conservative thought seems to favor a "free" market, and assumes that if large corporations benefit, everybody benefits. This is patently false. It assumes that corporations always play fair, and they seldom do. Why?
Greed.
It's what makes trickle-down economics a fairy-tale. When a multi-national makes a lot of money, upper management all directly benefit monetarily. Do they feel the need to give everybody a raise? NO! Do they give their suppliers and vendors a little extra? NO! Do they bring jobs back from overseas, to help America? NO! Do they, in their warm hearts, feel a twinge of brotherhood that makes them want to pass the savings on to the customer? Sure they, no wait... NO! If they do any of those nice things that drive our economy, it's because they have to. There's no interest in a friendly handshake anymore, because ass-raping is so much more lucrative.
Take heart, greed is also what destroyed Communism (sorry, Reaganites, I know I'm supposed to speak in hushed tones when bringing up the fall of Communism... Reagan's advisors noticed the USSR was going belly-up financially, and used it as a photo-op). Anyway, communism was a failed experiment because the people at the top were rewarded too much, and buggered the people at the bottom, until the people at the bottom simply gave up. Throw in a war against Islam in a hellhole Middle-Eastern country, and the bill was just too high.
Think it can't happen here? Demand for petrochemicals is down in the US... but China and India are using more every day. Their economies are rockin' hard... we're staring down the barrel of recession/inflation and it's going to get much worse before it gets better. Why is this? We used to make our own stuff, but Big Business saw slave labor overseas, and how much money they could pay themselves if they tapped into it. A little taste was all it took, and off they went, and suddenly the rich were richer, and my gasoline bill went up 200% but my hourly pay hasn't gone up at all.
I defy anyone to tell me how Big Business helps America in any way, when it doesn't benefit themselves further. There is no honor among thieves.-------->JMS

[Blue Reality]

Songsmith I agree with much of your post. The problem is not big business but us, the American consumer. We hate the present situation but we shop at WalMart and buy as much Chinees goods without question because they're cheaper than US goods. When is the last time most of us looked at a lable for the origin of a product and chose something made in the US even if was more expensive? We want our homes, cars, vacations, 4 wheelers, boats satellite/cable tv with a sports package and all the other toys we desire while having still having the best of life's necessities like food clothing and health care. It's all too expensive and as a trade we shop WalMart, Sam's Club, Cosco, Best Buy. Chineese goods to reduce expenses.

My satellite tv costs 69.00/month. that's 840.00 Annually to watch too much tv. If I went without that, i could buy US stuff that would cost me more. I'm just on the verge of doing this, I'd just have to give up Penguin Hockey and man's that's hard. But just saying that points out the absurdity of the situation.... Is my country more important thant TV?

[lonewolf]

Lonewolf...
I was thinking about my math in this thread last night, and sat bolt upright in bed...

I defy anyone to tell me how Big Business helps America in any way, when it doesn't benefit themselves further. There is no honor among thieves.-------->JMS

How about the record $32.361 billion in taxes that Exxon-Mobil paid before netting $11.68 billion in profit last quarter? I have to ask myself who are the thieves here?

How about the 107,100 high-paying jobs at Exxon-Mobil?

Or the 122,000 high-paying jobs at Honeywell, who also gave me my first professional job opportunity when all I could get here was as a gopher for a fly-by-night house painting crew.

Or how about the 228,600 high-paying jobs at Verizon?

Of course, most of these are skilled jobs that require certain levels of education, training and/or experience. Surprisingly enough, the USA is not producing enough skilled labor to keep up with demand, but at the same time, the days of high-paying semi-skilled jobs are gone, gone, gone...

Did I forget to mention the 2,100,000 jobs at Wal-Mart? While these may be lesser-paying jobs, this sector represents the jobs still available to unskilled workers. That doesn't include peripheral jobs from businesses that benefit from their presence. What do you think sales would be like if there was no Wal-Mart and Cannarsa's Music Emporium was still located in the log cabin?

Fortunately, we are approching a demographic milestone in 2011. The 1st group of baby boomers are scheduled to retire en masse. This will continue for 15-20 years and will brighten the employment picture significantly for those who are prepared.

Who will be prepared? The Bachelor of Science degree is yesteryear's high school diploma. Without a B.S., a specific trade skill, or a relative with a business, a person probably shouldn't expect much. Time to hit the books.

[songsmith]

Funny you mention WalMart:

http://www.msnbc.msn.com/id/25967103


Here's some ExxonMobil numbers for ya:
398 million dollars. That's how much the previous CEO got when he retired. He also got free country club memberships and use of the Exxon jet, plus a million a year as a "consultant."
12 years. That's how long he was Chairman.
85,174 dollars. That's the average wage at ExxonMobil.
4696 people. That's how many people you could pay at the average wage for one year, based on what Lee Raymond got just as a Platinum Parachute.
10.3 million gallons. That's how much crude spilled into Prince William Sound, AK.
5.287 billion dollars. That's how much the court ordered Exxon to pay for the Valdez incident.
507.5 million dollars. That's how much they actually paid, after bogging it in the courts for 19 years. They may have also paid 67 million to the Seattle Seven, but that was sealed so it can't be proven.

I still say, no honor among thieves.---->JMS

[Hawk]

Here IS how it is now, ever since the amendment was added by Phil Graham.

Who is Phil Graham? Is he related to Billy? What is this amendment he was supposed to have added?

I already gave all of the links.

BTW the change thing was funny.

OK, OK - I've been spelling it wrong. GRAMM

[Hawk]

Marshall, How long has Phil Graham been gone from McCain's staff ? Since he said the economy is OK and we are just a bunch of whiners ?

Obama speaks regularly of closing the loop hole. McCain says, well, nothing.

[lonewolf]

You can't make a financial bubble without Joe Citizen's help. This same sad story keeps playing out every 5-10 years or so. Remember the tech bubble? I do. I sold most of my holdings by the end of 2000 and warned many people to do the same, but that fell on deaf ears. It was a bull market and this was Joe Citizen's big chance to get rich quick. After the bubble burst, I remember a conversation with a broker about it and how easy the smart money lured in Joe Citizen at the end. The broker said; "and the beauty of it is that it will happen again".

After that, I was looking for signs of what the next bubble might be. I have been flipping and renting real estate for more than 20 years and it wasn't hard to recognize. Around 2003 the media started hyping the real estate boom and shows like "Flip This House" started appearing on TLC. "Flip This House" was some of the best comedy/reality I have ever seen. I was thinking: "It won't be long now."

The tech/internet bubble is all but forgotton as the latest bubble bursts. Joe Citizen fell for it again. Nothing. Not rules and regulations. Not bad credit. Nothing was going to keep Joe Citizen from beathing down the doors to uncover his pot of gold.

Sadly, instead of simply guaranteeing liquidity to FNMA and FHLMC, the US government has decided to bail out the greedy hands as well. Subprime bought up by unscrupulous mortgage securities companies at 35 cents on the dollar will be guaranteed 80 cents on the dollar by the government. There's nothing like a good-old government backed profit.

So, in the aftereffects of this bubble, there are still a few good money plays left, but it has left me wondering: "what's next?"

Wanna buy a windmill? How about a solar panel?

[songsmith]

I'm with you on the bursting bubble. I have no doubts that people were suckered by the A.R.M.'s and subprime mortgages, and that mortgage brokers did some predatory stuff, then sold it off for the fees, but I also saw that one coming.
If somebody offers you something that seems too good to be true, it should put up flags. I think people got stars in their eyes' and thought they could live the American Dream on the cheap, but there ain't no to get there but the hard way. I got my mortgage at slightly higher than the going rate at the time 4 years ago, from my home bank, and did so for the service. My payments are still way low, and I have nothing but good things to say about the service.
I saw the tech-bubble's demise coming as well, but I was kinda on the inside for that one. C-Cor made broadband cable amps and line extenders, and while our stock was at $90 in Dec. '99, we were slowing WAAAY down on orders, and the production folks were mostly reading magazines and BS'ing instead of working. I got out a month or two before, at $50, and I thought I was a dumbass... then the stock dropped to $12, rendering me a genius. It sure was fun for awhile, though.--->JMS

[crazyeights]

Lonewolf, you are right, there are alot of low paying jobs out there, yet the demand for skilled work is not where it once was. Doesn't make much sense, cause you'd think it would be the opposite....Unless.. the demand for skilled work is actually on the rise, yet employers do not want to pay the salaries those skills demand? .....Just a thought.

And ,yes isn't it strange that with the inflation and prices going up, that minimum wage and/or salaries are the last to rise to meet and rarely exceed those prices?

Just when wages increase and we can make due and adjust to the market, the prices go up and we are struggling to catch up.
It's a race that we will never win, yet we never quit.

[lonewolf]

I'm with you on the bursting bubble. I have no doubts that people were suckered by the A.R.M.'s and subprime mortgages, and that mortgage brokers did some predatory stuff, then sold it off for the fees, but I also saw that one coming.

Investing psychology is often defined by degrees of greed and fear. In this case, Joe Citizen was just as greedy and just as fearless as the mortgage broker who sat across the desk or behind the web page. After all, these guys didn't go door to door selling questionable mortgages...Joe Citizen's greed drove him to their doorstep looking for easy credit. It takes two to tango and they both had their dancing shoes on.

ARMs have been around since the early 80s. Mortgage rates are actually lower now, so payments on true ARMS have dropped along with the rates. I never liked the idea of ARMs much, but they are not the culprit here. There are all kinds of shady mortgage "products" that are disguised as ARMs, but they are not true ARMs. Politicians and the media need to learn a few terms like GPM (graduated payment mortgage) and the like.

[songsmith]

Good advice.
Again, the trick for me was to not buy a large house, because it's just my wife and I (and the dogs), and I simply don't want a big house to maintain. We chose a small lot in the country, small because we're in our 40's, and should be saving for retirement, country because living anything closer than 500 yards from your nearest neighbor sucks balls.
I truly, honestly would not want the hassles and costs of a starter-castle, and living in a condo would be one step worse than living in a Columbian prison for me. I drive through some of the developments in State College, and I wonder why people would drop half a million on ugly buildings that adjoin one another. The answer: They see other people doing it, so it must be what you do. I-want-what-they're-having-give-it-to-me-now. Not me, dude. I'd rather do like the old blues guys.... drink muddy water and sleep in a hollow log. The other advantage to having a small property is that we at least double-pay every month. By federal law, any overpayments get applied to the principal. We moved in 4 years ago, and we'll be paid off before the end of the decade, even if times get tougher. Living within your means is very satisfying, America should try it. --->JMS