coolhandluke
Active member
yep thats basically what happened
What do you think about the current financial situation?
- Thread starter Flo_Rida_2016
- Start date
Flo_Rida_2016
Active member
I know that the treasury dept is buying up the assets that the firms cannot liquidate in order to gain immediate capital.
The
fed hasnt been fully decided yet to sell 700 bill in treasury bonds.
Some want it to include tax payer money but there just isnt 700 bill in
taxpayer dollars. But i mean 700 bill in treasury bonds in one fell
swoop is a big deal.
Executive power is a big issue here
because it is not about financial regulation. It is about executive
(not congressional) spending of 700 fucking billion dollars without
judicial review or congressional oversight.
Thanks i know what a MBS, ABS, CDS, CLO etc are.
What the fed does in regards to interest rates is not the issue here. The fed's low interest rates effect how much people wish to borrow not how much banks want to loan out. Heck the interest rate can be 1% and banks still wouldnt loan to a 21 year old just out of college NINJA. The problem is the CRA which almost forced Mae/Mac to give out loans it otherwise wouldn't.
Here is a quote from franklin D raines himself (CEO fanny mae):
Fannie Mae has expanded home ownership for
millions of families in the 1990's by reducing down payment
requirements. Yet there remain too many borrowers whose
credit is just a notch below what our underwriting has required who
have been relegated to paying significantly higher mortgage rates in
the so-called subprime market
Also, a quote form a 1990 NY times article:
"Fannie Mae, the nation's biggest underwriter
of home mortgages, has been under increasing pressure from the Clinton
Administration to expand mortgage loans among low and moderate income
people"
What you said in the next paragraph is somewhat true. The lending was
not any more attractive than it used to be, only that banks new there
would be firms to buy up their MBS and ABS's and the actual value of
the assets would for all appearances sake increase. And all of this was
an extension of the CRA which pecularly had a sunset provision clause
inserted in the bill. The reason the CRA was never revoked was because
from all appearances, it looked to be actually profitable. So for a
while like ten years, no one questioned the ABS market and its
practices. The next couple of paragraphs are entirley true. good points.
The
fed hasnt been fully decided yet to sell 700 bill in treasury bonds.
Some want it to include tax payer money but there just isnt 700 bill in
taxpayer dollars. But i mean 700 bill in treasury bonds in one fell
swoop is a big deal.
Executive power is a big issue here
because it is not about financial regulation. It is about executive
(not congressional) spending of 700 fucking billion dollars without
judicial review or congressional oversight.
Thanks i know what a MBS, ABS, CDS, CLO etc are.
What the fed does in regards to interest rates is not the issue here. The fed's low interest rates effect how much people wish to borrow not how much banks want to loan out. Heck the interest rate can be 1% and banks still wouldnt loan to a 21 year old just out of college NINJA. The problem is the CRA which almost forced Mae/Mac to give out loans it otherwise wouldn't.
Here is a quote from franklin D raines himself (CEO fanny mae):
Fannie Mae has expanded home ownership for
millions of families in the 1990's by reducing down payment
requirements. Yet there remain too many borrowers whose
credit is just a notch below what our underwriting has required who
have been relegated to paying significantly higher mortgage rates in
the so-called subprime market
Also, a quote form a 1990 NY times article:
"Fannie Mae, the nation's biggest underwriter
of home mortgages, has been under increasing pressure from the Clinton
Administration to expand mortgage loans among low and moderate income
people"
What you said in the next paragraph is somewhat true. The lending was
not any more attractive than it used to be, only that banks new there
would be firms to buy up their MBS and ABS's and the actual value of
the assets would for all appearances sake increase. And all of this was
an extension of the CRA which pecularly had a sunset provision clause
inserted in the bill. The reason the CRA was never revoked was because
from all appearances, it looked to be actually profitable. So for a
while like ten years, no one questioned the ABS market and its
practices. The next couple of paragraphs are entirley true. good points.
Flo_Rida_2016
Active member
we could have more anti trust laws.
ferrinski86
Member
yeah.
so my question is what do we do now? do we loan or not loan? with these bad mortgage backed securities infultrating our financial markets, what do we do with them?
so my question is what do we do now? do we loan or not loan? with these bad mortgage backed securities infultrating our financial markets, what do we do with them?
NomenClature
Active member
Yeah, you don't have any idea.
If you knew what you were talking about, you wouldn't say the things you do.
Last time i checked, the the powers of administrative agencies were not considered "executive power" unless they were delegated by the president (Treasury serve at the pleasure of the president, but his actual power is limited, he cant even re-organize the agencies.)
"Tax payer money" - is that a joke? Do you really believe we have 700 billion dollars ANYWHERE? We dont have that kind of money. PERIOD. (we have trillion dollar debts, so where is that 700 billion dollar surplus?!?!) Our money is created by selling bonds, at this point THAT IS WHERE ALL OF OUR MONEY COMES FROM. Tax revenue is already over - allocated.
Tax-payer money is a term invented by politicians to describe public liabilities (GOVERNMENT BONDS), because its a lot easier to say than trying to explain to MORONS that our money is created through Debt. The only way the tax payer will pay for this is through inflation (which is not what you meant)
I think its funny that you say you understand Default Swaps, and yet you fail to see that they are the WORST asset held, and the major cause of AIGs Failure (not the 85 billion).
The Fed rate has NOTHING to do with consumer and private lending. NOTHING. Learn how the banking system works if you want to disprove me.
NINJAs were not a problem when the Discount Rate was 1.00.
The CRA was little more than a piece of legislation which made mortgages more available (just like FNM/FRE), and the institutions regulated by it only produced HALF of the bad Debt.
Legit banks DID NOT OFFER NINJA loans, thats the whole point. It was small mortgage brokers who didn't care about the quality of the debt (because they are just going to sell it).
FNM and FRE DON'T ISSUE LOANS (that one made you look bad). They are strictly buyers of mortgages (indeed its why they were created, to increase liquidity in the housing market).
CRA was the a tiny, tiny fraction of the problem. All it did was make Debt more liquid and stopped major institutions from discriminating against people. The problem was not the transfer of debt, we have been doing that since Louis Ranieri invented MBS. The problem was that the bad debt was indistinguishable from good debt on account of faulty ratings (caused by non-transparent securities and credit swaps, built out of Tranched Debt)
Too much Cheap money.
If you knew what you were talking about, you wouldn't say the things you do.
Last time i checked, the the powers of administrative agencies were not considered "executive power" unless they were delegated by the president (Treasury serve at the pleasure of the president, but his actual power is limited, he cant even re-organize the agencies.)
"Tax payer money" - is that a joke? Do you really believe we have 700 billion dollars ANYWHERE? We dont have that kind of money. PERIOD. (we have trillion dollar debts, so where is that 700 billion dollar surplus?!?!) Our money is created by selling bonds, at this point THAT IS WHERE ALL OF OUR MONEY COMES FROM. Tax revenue is already over - allocated.
Tax-payer money is a term invented by politicians to describe public liabilities (GOVERNMENT BONDS), because its a lot easier to say than trying to explain to MORONS that our money is created through Debt. The only way the tax payer will pay for this is through inflation (which is not what you meant)
I think its funny that you say you understand Default Swaps, and yet you fail to see that they are the WORST asset held, and the major cause of AIGs Failure (not the 85 billion).
The Fed rate has NOTHING to do with consumer and private lending. NOTHING. Learn how the banking system works if you want to disprove me.
NINJAs were not a problem when the Discount Rate was 1.00.
The CRA was little more than a piece of legislation which made mortgages more available (just like FNM/FRE), and the institutions regulated by it only produced HALF of the bad Debt.
Legit banks DID NOT OFFER NINJA loans, thats the whole point. It was small mortgage brokers who didn't care about the quality of the debt (because they are just going to sell it).
FNM and FRE DON'T ISSUE LOANS (that one made you look bad). They are strictly buyers of mortgages (indeed its why they were created, to increase liquidity in the housing market).
CRA was the a tiny, tiny fraction of the problem. All it did was make Debt more liquid and stopped major institutions from discriminating against people. The problem was not the transfer of debt, we have been doing that since Louis Ranieri invented MBS. The problem was that the bad debt was indistinguishable from good debt on account of faulty ratings (caused by non-transparent securities and credit swaps, built out of Tranched Debt)
Too much Cheap money.
ferrinski86
Member
i dont why you are arguing with him? you both have the same conclusion, cheap money, which i also agree on.
my question is (since you know alittle on this subject) is what are we suppost to do? who cares how we got here, thats the past. look ahead to the future. any ideas
my question is (since you know alittle on this subject) is what are we suppost to do? who cares how we got here, thats the past. look ahead to the future. any ideas
coolhandluke
Active member
Worth quoting and bringing to this page.
Twinjibber77
Active member
Crazy time to have an economics class, thats fer sure
coolhandluke
Active member
anyone remember the 1994 bailout of mexico under the clinton administration? risky move, but we actually made $$$$$ by charging heavy interest on the loans.
here's a transcription of the current bailout.
"Decisions
by the Secretary pursuant to the authority of this Act are non-reviewable and committed to
agency discretion, and may not be reviewed by any court of law or any administrative
agency."
here's a transcription of the current bailout.
"Decisions
by the Secretary pursuant to the authority of this Act are non-reviewable and committed to
agency discretion, and may not be reviewed by any court of law or any administrative
agency."
Flo_Rida_2016
Active member
are you retarded? FRE doesnt make loans, FRE is soley a mortgage underwiter. They buy mortgages and packages them into ABS's people can buy. FNM DOES ISSUE LOANS. FRE buys mortgages on the secondary market whereas FNM provides loans and loan guarantees incase mortgages default. The reason I said the two together was so as to not confuse the average NSer.
The CRA is not a tiny, tiny fraction of the problem. If anything it completley catalized the entire process and put is in the mindset that started the problem in the first place. I can't believe someone as educated as you would call lending to wealthy people only discrimination. Its not discrimination its smart practice.
Also the treasury dept is under the executive branch. Im not saying the president himself is pulling the strings but there is definitely a shift in financial power. Considering in our constitution, congress was intended to be far and above the most powerful entity in our government and that it and it alone was able to regulate commerce (art1sec8), our current form of government looks like an abomination. Now im not one of those radical libertarians but I am against government spending like this.
Also no shit we dont have 700 bill in tax payer money, the entire iraq war only cost like 500 bill thus far. Im just saying thats what some of the senators are proposing.
The CRA is not a tiny, tiny fraction of the problem. If anything it completley catalized the entire process and put is in the mindset that started the problem in the first place. I can't believe someone as educated as you would call lending to wealthy people only discrimination. Its not discrimination its smart practice.
Also the treasury dept is under the executive branch. Im not saying the president himself is pulling the strings but there is definitely a shift in financial power. Considering in our constitution, congress was intended to be far and above the most powerful entity in our government and that it and it alone was able to regulate commerce (art1sec8), our current form of government looks like an abomination. Now im not one of those radical libertarians but I am against government spending like this.
Also no shit we dont have 700 bill in tax payer money, the entire iraq war only cost like 500 bill thus far. Im just saying thats what some of the senators are proposing.
Did you know that they PAY you to live in Alaska
whats up with that, it cant be THAT bad there i mean at least they get a lot of snow
The US should give money to everyone that lives in canada. cause they suck
lol, I have no idea what this thread is about and im wayy to tired to read a bunch of political jargon. so thats my point of view right there
whats up with that, it cant be THAT bad there i mean at least they get a lot of snow
The US should give money to everyone that lives in canada. cause they suck
lol, I have no idea what this thread is about and im wayy to tired to read a bunch of political jargon. so thats my point of view right there
shitty
Member
i can't write a book like nomen, cause ironically i have to go to man. finance class, but i like to imagine this scenario. Lets say Citigroup goes bankrupt, and the fed didn't play the role of "lender of last resort" as text books explain, and citigroup went under. Well then i guess we can all saddle up and ride through the gates of hell, cause the we'd be fucked. shit here is too big to fail right now.
Whats stopping us from doing the same interest rate with these bailouts?
Sno.
Active member
chill out. this thread will end up many pages long, with lots of debate. There are plenty of intelligent people on NS, probably one for every 15 year old dumbshit.
You haven't given people enough time to read the thread. I mean shit, I just saw this thread, and haven't even read it all the way through, and I'm on NS all the time.
You haven't given people enough time to read the thread. I mean shit, I just saw this thread, and haven't even read it all the way through, and I'm on NS all the time.
NomenClature
Active member
selling debt is not a loan.
The institutions your referring to are not the major cause, by any means.
A "loan guarantee incase mortgages default" - thats a Credit Default Swap, which is a flawed financial product, it is bought and sold (underwriten).
Debt Tranching (which is more an issue than any piece of arcane legislation you can dream up), created the transparency issue.
the mortgage industry is SYMPTOM of the crisis. They exacerbated the problem by continually introducing liquidity into a flawed market, but they are not the root cause (thats not really disputable).
economic growth is a tricky business, if you just make credit available to rich people, then they tend to end up having more, and more of the total money supply. Such wealth inequalities make a consumer spending based economy unworkable. (we only make money when people borrow and spend).
Our founding fathers would all be hung as terrorists in our current society. Judicial interpretation of the constitution has long had more relevance than the document itself.
I'm a little tired of arguing with you, but the problem is much more broad than you seem to think.
Many people (buying houses they couldn't afford, living beyond their means via Debt), Many laws(the Laissez Faire policy of the last 8 years, following 6 years of free money, and the depegging of our currency/ our debt load ) and 'Thousands of Idiot Investment Bankers' trying to use the immensely complex ideas of people smarter than them to make money "risk free".
The problem is systemic, and i really only take issue of your insistence that the CRA was some sort of "Declaration of Doom"
The institutions your referring to are not the major cause, by any means.
A "loan guarantee incase mortgages default" - thats a Credit Default Swap, which is a flawed financial product, it is bought and sold (underwriten).
Debt Tranching (which is more an issue than any piece of arcane legislation you can dream up), created the transparency issue.
the mortgage industry is SYMPTOM of the crisis. They exacerbated the problem by continually introducing liquidity into a flawed market, but they are not the root cause (thats not really disputable).
economic growth is a tricky business, if you just make credit available to rich people, then they tend to end up having more, and more of the total money supply. Such wealth inequalities make a consumer spending based economy unworkable. (we only make money when people borrow and spend).
Our founding fathers would all be hung as terrorists in our current society. Judicial interpretation of the constitution has long had more relevance than the document itself.
I'm a little tired of arguing with you, but the problem is much more broad than you seem to think.
Many people (buying houses they couldn't afford, living beyond their means via Debt), Many laws(the Laissez Faire policy of the last 8 years, following 6 years of free money, and the depegging of our currency/ our debt load ) and 'Thousands of Idiot Investment Bankers' trying to use the immensely complex ideas of people smarter than them to make money "risk free".
The problem is systemic, and i really only take issue of your insistence that the CRA was some sort of "Declaration of Doom"
Flo_Rida_2016
Active member
This is very true and i in no way blame the CRA for the total fault of what happened. I agree the crisis is much broader and much more serious than the average person thinks it is. I also agree that CDS's are bull. But on the other hand, I included the CRA tidbit only to deter anyone who is about to whole heartedly blame Bush on what happened. If anything this is proof that left wing economics lend themselves to economic troubles.
ferrinski86
Member
my question is why are all theses CEO's taking away the golden parachute, getting millions for driving these companies into the ground? if they think 700 billion is the answer and it will stabalize the market why then doesnt the bank just make the CEO's use their own collateral for loans if they are so sure?
I mean, if i default on my loan or get foreclosed on my house or claim bancrupcy i dont get any money from anybody, why is it any different for them? I know the answer but still. in one way we need to save the financial markets and in the other way we do not and should let the market settle itself by itself.
another thought i just had, at least Paulson and Bernake are trying to do something and nobody else is stepping in, they are all just bitching.
we have 2 options 1) 700 billion dollars that is "claimed" to help the market or 2) not do anything and risk a long recession or possibly a great depression.
Somebody else needs to step in with a better plan and stop bitching.
I mean, if i default on my loan or get foreclosed on my house or claim bancrupcy i dont get any money from anybody, why is it any different for them? I know the answer but still. in one way we need to save the financial markets and in the other way we do not and should let the market settle itself by itself.
another thought i just had, at least Paulson and Bernake are trying to do something and nobody else is stepping in, they are all just bitching.
we have 2 options 1) 700 billion dollars that is "claimed" to help the market or 2) not do anything and risk a long recession or possibly a great depression.
Somebody else needs to step in with a better plan and stop bitching.
graciousstallion
Member
of course it is, dont you know everything thats going wrong right now is clintons fault? and it was all because he just wanted a simple bj..
hype
Active member
well i think you need to think about what your saying:
Why are ceos taking their golden parachute? if someone handed you money would you take it? dont say anything but yes or your lying. they obviously dont care about the companies anymore because they are not with them and these "golden parachutes are their severance packages.
and why would they use their own money if they dont have to? they dont have close to enough money to back their loan decisions
and if you delcare bankruptcy you dont "get"money, but you basically get out of paying some of it.
bernanke and paulson are doing their job. the lawmakers are doing theirs too. they are not going to pass a 700B deal unless they really grill the people proposing it and make a stink out of the deal. they are at least showing the tax payers that they are standing up for them
Why are ceos taking their golden parachute? if someone handed you money would you take it? dont say anything but yes or your lying. they obviously dont care about the companies anymore because they are not with them and these "golden parachutes are their severance packages.
and why would they use their own money if they dont have to? they dont have close to enough money to back their loan decisions
and if you delcare bankruptcy you dont "get"money, but you basically get out of paying some of it.
bernanke and paulson are doing their job. the lawmakers are doing theirs too. they are not going to pass a 700B deal unless they really grill the people proposing it and make a stink out of the deal. they are at least showing the tax payers that they are standing up for them
ferrinski86
Member
point taken.
i dont really give a dam about the corrupt CEO's running our country, i dont really give a shit that people couldnt afford their own mortgages thats their fault (as well as the fault of alot others).
i know that the CEOs dont care anymore about their companies but they should. money=greed greed=corruption corrpution=no more free market. dont get me wrong, im agreeing with you, i just want to know what peoples take is on the 700 billion but nobody has answered my question yet.
and yes, i would take the money
i dont really give a dam about the corrupt CEO's running our country, i dont really give a shit that people couldnt afford their own mortgages thats their fault (as well as the fault of alot others).
i know that the CEOs dont care anymore about their companies but they should. money=greed greed=corruption corrpution=no more free market. dont get me wrong, im agreeing with you, i just want to know what peoples take is on the 700 billion but nobody has answered my question yet.
and yes, i would take the money
ferrinski86
Member
oh yeah i just went back up and saw it, thanks.
Quinny
Active member
What is happening with the economy is exactly what happens when you don't let capitalism work naturally. There is not enough accountability for when people fuck up. In capitalism there are winners are there are losers, and the people who were stupid and careless should have to pay for it. That goes for the idiot consumers who bought things they really can't afford, as well as the idiot lenders who made out bad loans.
Such as it is the economy has been too dependent upon credit. To correct this people are looking for stability and it may result in a shift in the economic stranded. Some say move to gold, others to an agricultural staple. However, some investors are not ready to jump into a different market yet. Warren Buffett, for example, is poised to invest billions into Goldman Sachs.
Such as it is the economy has been too dependent upon credit. To correct this people are looking for stability and it may result in a shift in the economic stranded. Some say move to gold, others to an agricultural staple. However, some investors are not ready to jump into a different market yet. Warren Buffett, for example, is poised to invest billions into Goldman Sachs.
ferrinski86
Member
this is wear i get torn, as well as the rest of the country.
i agree in a capitalistic economy, let the winners succeed and let the losers fail. the market will stabilize itself. this is the rule under normal circumstances. however, through years of bad choices we now face a very tough decision and that is where i am torn.
on one side, if we let theses conglomerate companies fail then they not only take their failing companies down but they risk the fact of taking the whole financial markets down. Our nations money portfolios are at stake as well as outside investors, business and consumer credit...the list goes on and we risk a severe recession if not another great depression which i believe would be very hard to relieve ourselves of.
Or, do we bail out theses bad behaviors of these companies and hope that the government pick the right MBS and not the wrong ones? when did we start rewarding bad behavior? I can see trying to stabilize the market for everybodies stake but i think if we pass this bill what does it really accomplish? it accomplishes nothing, it buys market securities and does nothing to the laws that are on the books so what happens is that banks will still be handing out these flawed mortgages. i also dont agree that we need to act by friday, since when did friday become the turning point for our country?
We need to stabilize our dollar is what this is coming too. we have far too much investment with the rest of the world to have one of the largest financial markets in the history of the world be allowed to fail.
at this point in time i do believe we need to pass this 700 billion to "stabilize" the market, not fix it (by any means), and thats the key word "stabilize." we all know this is far more complicated than we can discuss on NS but we can try damit!
i blame alot of people for what we have gotten ourself into but we did do this to ourselves people, plain and simple. however, i feel "we the people" will once again bail out more companies.
i agree in a capitalistic economy, let the winners succeed and let the losers fail. the market will stabilize itself. this is the rule under normal circumstances. however, through years of bad choices we now face a very tough decision and that is where i am torn.
on one side, if we let theses conglomerate companies fail then they not only take their failing companies down but they risk the fact of taking the whole financial markets down. Our nations money portfolios are at stake as well as outside investors, business and consumer credit...the list goes on and we risk a severe recession if not another great depression which i believe would be very hard to relieve ourselves of.
Or, do we bail out theses bad behaviors of these companies and hope that the government pick the right MBS and not the wrong ones? when did we start rewarding bad behavior? I can see trying to stabilize the market for everybodies stake but i think if we pass this bill what does it really accomplish? it accomplishes nothing, it buys market securities and does nothing to the laws that are on the books so what happens is that banks will still be handing out these flawed mortgages. i also dont agree that we need to act by friday, since when did friday become the turning point for our country?
We need to stabilize our dollar is what this is coming too. we have far too much investment with the rest of the world to have one of the largest financial markets in the history of the world be allowed to fail.
at this point in time i do believe we need to pass this 700 billion to "stabilize" the market, not fix it (by any means), and thats the key word "stabilize." we all know this is far more complicated than we can discuss on NS but we can try damit!
i blame alot of people for what we have gotten ourself into but we did do this to ourselves people, plain and simple. however, i feel "we the people" will once again bail out more companies.
cobra_commander
Active member
Campaign donations.
We really should though. These people, made billions off in our capitalistic economy. And now that they are losing money under capitalism they want to change it to mercantilism, or even socialism. No we need to stick to capitalism. They want the money to get out of this problem, and they want it from the tax payers, now it is our turn to charge the interest rate. However our elected government, is effectively owned by the financial elite and will happily use our money to bail out their buddies. You can call me a conspiracy crazy liberal, but if you disagree with that statement where the fuck have you been for the last eight years as the efficiency of our gov't has gone to the dogs, for the benefit of the financial elite. Quinny is right however, Capitalism works when it is left as is. Some people win and some people lose. Right now a few people are losing and turning it into mercantilism, a system where everyone loses. However, now is the time for the tax payer to win. The taxpayer is the one who can turn this situation around, and for the benifit of the taxpayers, the hard working citizens of the United States. If, instead of a bail out, the government loans the money to the markets, under heavy intrest rates, or as a buy out (as aposed to a bail out) where the taxpayers then own an equivelent share of the companies that go for the money, then the taxpayers can win.
We really should though. These people, made billions off in our capitalistic economy. And now that they are losing money under capitalism they want to change it to mercantilism, or even socialism. No we need to stick to capitalism. They want the money to get out of this problem, and they want it from the tax payers, now it is our turn to charge the interest rate. However our elected government, is effectively owned by the financial elite and will happily use our money to bail out their buddies. You can call me a conspiracy crazy liberal, but if you disagree with that statement where the fuck have you been for the last eight years as the efficiency of our gov't has gone to the dogs, for the benefit of the financial elite. Quinny is right however, Capitalism works when it is left as is. Some people win and some people lose. Right now a few people are losing and turning it into mercantilism, a system where everyone loses. However, now is the time for the tax payer to win. The taxpayer is the one who can turn this situation around, and for the benifit of the taxpayers, the hard working citizens of the United States. If, instead of a bail out, the government loans the money to the markets, under heavy intrest rates, or as a buy out (as aposed to a bail out) where the taxpayers then own an equivelent share of the companies that go for the money, then the taxpayers can win.
errrka
Active member
alright so somehow today in precalc we got on the topic of the whole financial situation for the whole period, it went about as follws.
The US wants to spend 200 billion dollars [or however great sum of money it is] to keep the banks from going under. After hearing the arguments today in class I'm against it. If the banks go under, you won't lose your money, thats what the FDIC is for, to protect the people's money, that's what everyone forgets about. And the entire reason for this whole financal situation starts with the housing market. People take out loans they can't afford for houses they have no business buying. If you look at the time in the 20's when the stock market crashed, there was a period of time indicating a failing housing market. But that's besides the point. Greed had a major role in why a lot of this has happened, the bank's wanting to make money on people taking loans, people wanting more than they can really have. If this whole thing goes through do you guy's even realize what is going to happen? The value of the dollar is going to fall miserably, thus causing a huge increase of prices. Largely oil, which means gas prices these coming years are going to flat out suck. The united states government is going to bail the banks out, but have the banks ever bailed we the people out? I don't think so. Yes, I know this all will higher intrest rates, but that will alos make people think twice about taking out loans for major purchases. The banking system also needs to make further research into the credit and monetary history of people taking out loans. See if they can pay them off or can even afford to!
Wow, haha I need to able to do that to an English paper. Sorry about the ramble, just thoughts.
The US wants to spend 200 billion dollars [or however great sum of money it is] to keep the banks from going under. After hearing the arguments today in class I'm against it. If the banks go under, you won't lose your money, thats what the FDIC is for, to protect the people's money, that's what everyone forgets about. And the entire reason for this whole financal situation starts with the housing market. People take out loans they can't afford for houses they have no business buying. If you look at the time in the 20's when the stock market crashed, there was a period of time indicating a failing housing market. But that's besides the point. Greed had a major role in why a lot of this has happened, the bank's wanting to make money on people taking loans, people wanting more than they can really have. If this whole thing goes through do you guy's even realize what is going to happen? The value of the dollar is going to fall miserably, thus causing a huge increase of prices. Largely oil, which means gas prices these coming years are going to flat out suck. The united states government is going to bail the banks out, but have the banks ever bailed we the people out? I don't think so. Yes, I know this all will higher intrest rates, but that will alos make people think twice about taking out loans for major purchases. The banking system also needs to make further research into the credit and monetary history of people taking out loans. See if they can pay them off or can even afford to!
Wow, haha I need to able to do that to an English paper. Sorry about the ramble, just thoughts.
ferrinski86
Member
your teacher (or class) brought us some good points, however, they are all irrelevant to what is going on except for the further de-evaluation of the dollar. The FDIC will back YOUR money in the bank but only for the first $100,000. this is also despite the point.
the reason everybody is loosing money is in the market, in MBS, retirement packages, IRA's, mutual funds... not what you have in the bank. the banks are safe (for the time being). The problem is when the financial markets fail it risks that banks might fail. the FDIC does not have enough money to back-up all of the banks in this country, despite what they are set up to do.
perhaps its our time for a recession or another great depression, we brought this on ourselves.. its this mess is the greater evil and we are "screwed" either way. i know i lean for passing the 700 billion but at the same time i believe the market should stabilize itself naturally, not artificially like we want to do. sad thing is, the market may have to hit bottom before it can stabilize and start regaining again
the reason everybody is loosing money is in the market, in MBS, retirement packages, IRA's, mutual funds... not what you have in the bank. the banks are safe (for the time being). The problem is when the financial markets fail it risks that banks might fail. the FDIC does not have enough money to back-up all of the banks in this country, despite what they are set up to do.
perhaps its our time for a recession or another great depression, we brought this on ourselves.. its this mess is the greater evil and we are "screwed" either way. i know i lean for passing the 700 billion but at the same time i believe the market should stabilize itself naturally, not artificially like we want to do. sad thing is, the market may have to hit bottom before it can stabilize and start regaining again
VT_FLO
Active member
what do i think about the current financial situation?
Let me tell you. My dad hasn't had a job for the past 8 months because all of our american research and development is in china. He is a Dr. of Chemistry, and holds his phd. two weeks ago he was offered a job, but we haven't heard anything more from the company because they're being bought out. He has developed his own systems and inventions at home and has sorted through thousands of patents and filed around 10 patents on inventions of his own.
He has traveled around to the remaining companies such as DuPont, etc.. in an attempt to get a partnership and license out these inventions as to get some cash flow back into the family while at the same time searching for a job.
Our income has gone down $100,000, so our family is currently bringing in $40,000 this year. We have money in the bank, but it's not insured for over $100,000, and as you all must know a fair amount of American banks are on the verge of crashing. If we hadn't prepared for something like this to happen I would be living in a tiny apartment right now.
My life up to the last two months when I got a good girlfriend has consisted of working coupled with binge drinking and smoking myself retarded, coupled with constant bouts of depression on how I'm going to pay for college, where my family is going to be living, and the general situation that we as a family are in. Everybody vents to me, and I vent to no one, I've gone through several emotional breakdowns, and have joined and quit fight clubs to get out my anger and depression. With the economy about to take an even deeper plunge to the shits, and nobody listening to the one politician who will actually face the issue (Ron Paul) it's fair to say that I'm very angry at this country and its financial situation.
I have a girlfriend now, and helping her through shit that she's dealing with has helped me realize how strong of a person I am. I've stopped binge drinking, no longer smoke tobacco of any kind, and am smoking weed about once a month. I guess in turn she helped me too, and I'm greatful, but am not going to be clingy or anything and say i need her, because its not true. That would be a naieve idea to hold.we
Sparknotes: family gone from 140,000$ a year to 40,000$ a year, middle and upper middle class being wiped out in america, me and my depression, and i got a good girlfriend and stopped binge drinking and doing really stupid stuff
Let me tell you. My dad hasn't had a job for the past 8 months because all of our american research and development is in china. He is a Dr. of Chemistry, and holds his phd. two weeks ago he was offered a job, but we haven't heard anything more from the company because they're being bought out. He has developed his own systems and inventions at home and has sorted through thousands of patents and filed around 10 patents on inventions of his own.
He has traveled around to the remaining companies such as DuPont, etc.. in an attempt to get a partnership and license out these inventions as to get some cash flow back into the family while at the same time searching for a job.
Our income has gone down $100,000, so our family is currently bringing in $40,000 this year. We have money in the bank, but it's not insured for over $100,000, and as you all must know a fair amount of American banks are on the verge of crashing. If we hadn't prepared for something like this to happen I would be living in a tiny apartment right now.
My life up to the last two months when I got a good girlfriend has consisted of working coupled with binge drinking and smoking myself retarded, coupled with constant bouts of depression on how I'm going to pay for college, where my family is going to be living, and the general situation that we as a family are in. Everybody vents to me, and I vent to no one, I've gone through several emotional breakdowns, and have joined and quit fight clubs to get out my anger and depression. With the economy about to take an even deeper plunge to the shits, and nobody listening to the one politician who will actually face the issue (Ron Paul) it's fair to say that I'm very angry at this country and its financial situation.
I have a girlfriend now, and helping her through shit that she's dealing with has helped me realize how strong of a person I am. I've stopped binge drinking, no longer smoke tobacco of any kind, and am smoking weed about once a month. I guess in turn she helped me too, and I'm greatful, but am not going to be clingy or anything and say i need her, because its not true. That would be a naieve idea to hold.we
Sparknotes: family gone from 140,000$ a year to 40,000$ a year, middle and upper middle class being wiped out in america, me and my depression, and i got a good girlfriend and stopped binge drinking and doing really stupid stuff
Sno.
Active member
well...I'm off to attend this:
When: Thursday, September 25, 2008 1:30 PM-3:00 PM (GMT-08:00) Pacific Time (US & Canada).
Where: 99/1919 Research Lecture Room C
*~*~*~*~*~*~*~*~*~*
You are invited to attend… please pass on to internal MS employees who may be interested.*****************************************************************************************************
WHO: Robert J. ShillerAFFILIATION: Stanley B. Resor Professor of Economics, Yale University
TITLE: The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to do about It WHEN: Thu 9/25/2008
WHERE: 99/1919 Research Lecture Room C TIME: 1:30PM-3PM HOST: Ben Kunz and Kirsten Wiley MSRNS: For Live/On Demand viewing availability check http://resnet/msrn
******************************************************************************************************ABSTRACT: The subprime mortgage crisis has already wreaked havoc on the lives of millions of people and now it threatens to derail the U.S. economy and economies around the world. Much of this crisis comes from the “irrational exuberance” that drove the economy’s two most recent bubbles-in stocks in the 1990’s and in housing between 2000 and 2007. These bubbles led to the dangerous overextension of credit and a global credit crunch and to restore confidence in the market short-term bailouts are needed. In the longer term, the subprime solution will require steps to revamp the financial framework to inhibit the formation of bubbles and limit risks. How? With a variety of steps than include: simplified legal contracts and regulations, an expansion of markets for managing risks, home equity insurance policies, income-linked home loans, and new measures to protect consumers against hidden inflationary effects. We know how we created the subprime mess—and now we can see the way out.
BIO:
Robert J. Shiller is an American economist, teacher and the author of many books and articles, including national bestsellers Irrational Exuberance and The New Financial Order. Shiller received his B.A. from the University of Michigan and his Ph.D from MIT, and has held faculty positions at the Wharton School and the University of Minnesota. He has been a research associate of the National Bureau of Economic Research since 1980, was Vice President of the American Economic Association in 2005 and President of the Eastern Economic Association for 2006-2007.
When: Thursday, September 25, 2008 1:30 PM-3:00 PM (GMT-08:00) Pacific Time (US & Canada).
Where: 99/1919 Research Lecture Room C
*~*~*~*~*~*~*~*~*~*
You are invited to attend… please pass on to internal MS employees who may be interested.*****************************************************************************************************
WHO: Robert J. ShillerAFFILIATION: Stanley B. Resor Professor of Economics, Yale University
TITLE: The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to do about It WHEN: Thu 9/25/2008
WHERE: 99/1919 Research Lecture Room C TIME: 1:30PM-3PM HOST: Ben Kunz and Kirsten Wiley MSRNS: For Live/On Demand viewing availability check http://resnet/msrn
******************************************************************************************************ABSTRACT: The subprime mortgage crisis has already wreaked havoc on the lives of millions of people and now it threatens to derail the U.S. economy and economies around the world. Much of this crisis comes from the “irrational exuberance” that drove the economy’s two most recent bubbles-in stocks in the 1990’s and in housing between 2000 and 2007. These bubbles led to the dangerous overextension of credit and a global credit crunch and to restore confidence in the market short-term bailouts are needed. In the longer term, the subprime solution will require steps to revamp the financial framework to inhibit the formation of bubbles and limit risks. How? With a variety of steps than include: simplified legal contracts and regulations, an expansion of markets for managing risks, home equity insurance policies, income-linked home loans, and new measures to protect consumers against hidden inflationary effects. We know how we created the subprime mess—and now we can see the way out.
BIO:
Robert J. Shiller is an American economist, teacher and the author of many books and articles, including national bestsellers Irrational Exuberance and The New Financial Order. Shiller received his B.A. from the University of Michigan and his Ph.D from MIT, and has held faculty positions at the Wharton School and the University of Minnesota. He has been a research associate of the National Bureau of Economic Research since 1980, was Vice President of the American Economic Association in 2005 and President of the Eastern Economic Association for 2006-2007.
coolhandluke
Active member
after putting washington mutual in the tank with a horrible dealing of mortgages, CEO kerry killinger was docked $3 million in direct compensation (pay), lowering him from #1 highest paid CEO in washington state in 2007 to #2 highest in 2008.
don't forget how rich members of congress are. mccain is at 13th with $20 million.
the people who allowed this situation to occur, and those who are "working on the fix" are far richer than anyone here could imagine.
don't forget how rich members of congress are. mccain is at 13th with $20 million.
the people who allowed this situation to occur, and those who are "working on the fix" are far richer than anyone here could imagine.
mind_Riot39
Member
This issue goes way deeper than the mistakes of current and former presidents. Our entire monetary system is flawed because we borrow our currency from a private bank AT INTEREST. We have nowhere else to get the money to pay off the interest except from either the same private bank, or from other countries. The result of this fucked-up system is a self generating debt and we're finally getting to the point where we've dug our hole too deep and the bankers are dumping their monetary garbage onto the backs of the people. I feel like this is the beginning of a period of drastic change for the US and it doesn't seem like its going to be for the better.
Sno.
Active member
I'm worried too.
Mainly about the housing market...I have personal interest in the housing market, and a lot of questions that can't be answered by anyone.
Is now still a good time to buy?? Or are housing prices about to REALLY tank?
how will this 700 billion dollar plan effect mortgage rates, and how will it effect the housing market? Can one make a sound real estate investment in an economy with so many unanswered questions? To many the answer might be an obvious 'no', but to others, buying a home right now at 20% below it's poor economy market value is a high temptation. Can we really look at trends and make sound predictions?
Mainly about the housing market...I have personal interest in the housing market, and a lot of questions that can't be answered by anyone.
Is now still a good time to buy?? Or are housing prices about to REALLY tank?
how will this 700 billion dollar plan effect mortgage rates, and how will it effect the housing market? Can one make a sound real estate investment in an economy with so many unanswered questions? To many the answer might be an obvious 'no', but to others, buying a home right now at 20% below it's poor economy market value is a high temptation. Can we really look at trends and make sound predictions?
upthebrackette
Member
I don't really know if there's anything we can do about this. As everyone knows, history repeats itself, and all superpowers fail at some time.
Maybe the $700billion plus the rest, which we don't even know how much yet, probably around $1.3trillion total, may help. BUT, we have no idea how much the assets are worth. If we pay too much, Wall Street fiems will end up making money off of the taxpayers, which resembles using taxpayers money to save the rich banks, which by me is not cool. If we pay too little, the value of all assets will be decreased, causing a different problem. How I see this, it's like an episode of the the price is right. except the only catch is that if we guess the wrong price, we're fucked.
Congress has been asked by the treasury to raise the national debt to $11.315 trillioin. It looks like we really have money to pay back other countries doesn't it? I think that if we do this, we will basically be slaves to other countries. Many of our products come from overseas as it is, and there's not really too much we can do to stop that now. No one wants to come to the U.S. anymore, other countries are growing faster and smarter than us. Take India and china for example. Instead of having them come to this country we are outsourcing our work to them. It seems like the U.S. is dying, and there is no need for us to be around anymore. If this loan isn't approved, I will put some blame on Bush. Maybe instead of fucking with everyone else he should've paid some more attention to his own country and not driven it deeper and deeper into debt, with this prepostorous loan being the culmination and forcing us just to sink deeper.
I don't know how we will be able to recover from this. All that I know is that I've bought a shitload of canned food and extra supplies because I think that we are pretty much fucked no matter what happens, we just have to see how bad.
On the other hand, at least we can live through some sweet turmoil to tell our kids about.
Maybe the $700billion plus the rest, which we don't even know how much yet, probably around $1.3trillion total, may help. BUT, we have no idea how much the assets are worth. If we pay too much, Wall Street fiems will end up making money off of the taxpayers, which resembles using taxpayers money to save the rich banks, which by me is not cool. If we pay too little, the value of all assets will be decreased, causing a different problem. How I see this, it's like an episode of the the price is right. except the only catch is that if we guess the wrong price, we're fucked.
Congress has been asked by the treasury to raise the national debt to $11.315 trillioin. It looks like we really have money to pay back other countries doesn't it? I think that if we do this, we will basically be slaves to other countries. Many of our products come from overseas as it is, and there's not really too much we can do to stop that now. No one wants to come to the U.S. anymore, other countries are growing faster and smarter than us. Take India and china for example. Instead of having them come to this country we are outsourcing our work to them. It seems like the U.S. is dying, and there is no need for us to be around anymore. If this loan isn't approved, I will put some blame on Bush. Maybe instead of fucking with everyone else he should've paid some more attention to his own country and not driven it deeper and deeper into debt, with this prepostorous loan being the culmination and forcing us just to sink deeper.
I don't know how we will be able to recover from this. All that I know is that I've bought a shitload of canned food and extra supplies because I think that we are pretty much fucked no matter what happens, we just have to see how bad.
On the other hand, at least we can live through some sweet turmoil to tell our kids about.
I think the current financial situation is horrible. A lot of it is for selfish reasons, ie. I just graduated college, can't find a job, have $40,000 in loans to pay off, and have no health insurance. I'm now living with my dad who was informed that his company plans on laying off 60% of the employees.
So you could say I am not happy with the financial situation.
But at the same time I think it was both parties faults. This started with Alan Greenspan and his happy little bill that he convinced Clinton to sign. Clinton didn't need to sign it. We were fine financially till that point and it wasn't till then that the problems started. So this technically started with clinton, not bush. It just happened to be one of the last things Clinton did so it isn't really attributed to his presidency.
But then we had bush go in and pretty much destroy everything else. Spending loads on a war that we are only going to continue spending on. Giving huge tax cuts when I don't think the public would have had less confidence if he hadn't given the cuts. And then the thing with the electric car.... Now that frustrates me more than him trying to make birth control illegal.
It has been both parties getting us into this situation. I think we need to look to advice from other nations on getting out of this situation because our methods obviously aren't working. Be it socialist, communist, whatever, we shouldn't be so rapid to turn down ideas. We can create a working class welfare system if it will help us now, it doesn't mean that we have to keep that system, but it would give the people losing jobs at least an opportunity to work even if it involves doing jobs people don't want to do, at least it will inspire them to try to find something else.
To those of you with unlimited spending accounts, think about what you spend a year on just outerwear. Stuff you probably already have that works perfectly fine, but you want to replace. how much is it? $400+ Now think of what someone with no money could do with $400.
American's are obsessed with stuff. We think that having stuff is how to live. Other countries do just fine for themselves, people work, there is low unemployment, they take time off to be with their families, they have less teen pregnancies, but at the same time, they have less stuff. Taking a vacation with the family becomes more important than owning the latest chanel purse. It is only countries with new money that find brand names and owning stuff to be so important.
This all happened because too many people got greedy. So quit thinking you need everything that you don't and try investing in companies that do good like having their products made in the US or are searching for alternate energy instead of banks and oil.
So you could say I am not happy with the financial situation.
But at the same time I think it was both parties faults. This started with Alan Greenspan and his happy little bill that he convinced Clinton to sign. Clinton didn't need to sign it. We were fine financially till that point and it wasn't till then that the problems started. So this technically started with clinton, not bush. It just happened to be one of the last things Clinton did so it isn't really attributed to his presidency.
But then we had bush go in and pretty much destroy everything else. Spending loads on a war that we are only going to continue spending on. Giving huge tax cuts when I don't think the public would have had less confidence if he hadn't given the cuts. And then the thing with the electric car.... Now that frustrates me more than him trying to make birth control illegal.
It has been both parties getting us into this situation. I think we need to look to advice from other nations on getting out of this situation because our methods obviously aren't working. Be it socialist, communist, whatever, we shouldn't be so rapid to turn down ideas. We can create a working class welfare system if it will help us now, it doesn't mean that we have to keep that system, but it would give the people losing jobs at least an opportunity to work even if it involves doing jobs people don't want to do, at least it will inspire them to try to find something else.
To those of you with unlimited spending accounts, think about what you spend a year on just outerwear. Stuff you probably already have that works perfectly fine, but you want to replace. how much is it? $400+ Now think of what someone with no money could do with $400.
American's are obsessed with stuff. We think that having stuff is how to live. Other countries do just fine for themselves, people work, there is low unemployment, they take time off to be with their families, they have less teen pregnancies, but at the same time, they have less stuff. Taking a vacation with the family becomes more important than owning the latest chanel purse. It is only countries with new money that find brand names and owning stuff to be so important.
This all happened because too many people got greedy. So quit thinking you need everything that you don't and try investing in companies that do good like having their products made in the US or are searching for alternate energy instead of banks and oil.
ferrinski86
Member
it depends on where you live and how old you are. if you want to buy a house for the long run now is not a bad time to do so. im currently building a house right now. i chose to build a house rather than buy one because of our current housing market here, which is fine. turns out building a small nice house is just as expensive as buying a fixer upper house and fixing it. (of course im doing alot of the inside work, and not hiring it done, which saves thousands)
anyways, to answer your question you have to look at the land values and housing values in your market area. just because certain areas in this country are seeing housing prices fail and fall dramatically doesnt mean other parts are that way, some are just fine (where i live).
next, really look at your funds and the options to finance your mortgage, shop around.
but my final answer would be to wait after this "financial storm" passes and if you really have enough time i would personally wait until after the election or until the market settles out.
anyways, to answer your question you have to look at the land values and housing values in your market area. just because certain areas in this country are seeing housing prices fail and fall dramatically doesnt mean other parts are that way, some are just fine (where i live).
next, really look at your funds and the options to finance your mortgage, shop around.
but my final answer would be to wait after this "financial storm" passes and if you really have enough time i would personally wait until after the election or until the market settles out.
ferrinski86
Member
thank you. this did happen over the course of this nations greedy lifestyle, especially the "i want now crowd," getting everything they want now, mainly with credit.
this is not a political issue on who blames who, this is a combination of many things gone wrong, not bush or clintons fault. its our own dam fault for making credit so easy to everybody.
credit bought everything the last decade and credit will be the death of us.
this is not a political issue on who blames who, this is a combination of many things gone wrong, not bush or clintons fault. its our own dam fault for making credit so easy to everybody.
credit bought everything the last decade and credit will be the death of us.
Exactly...
Now only if I would have gotten more financial aid last year and wouldnt have had to charge $5,000 worth of tuition and housing to a credit card.
Cause now I owe $8,000 and still can't pay it back.
At least it wasn't $5,000 on new clothes.
CREDIT IS EVIL!
Now only if I would have gotten more financial aid last year and wouldnt have had to charge $5,000 worth of tuition and housing to a credit card.
Cause now I owe $8,000 and still can't pay it back.
At least it wasn't $5,000 on new clothes.
CREDIT IS EVIL!
Yea, he definitely got punished alright.