U.s. Banking Crisis: Capitalism "gone Wild"?

[Groongthep]

wrong assumption! i did not mention 4 houses but 4 american speculators. one of the speculators bought my home which was -that is correct- foreign owned. he also bought 2 more homes in the same homeowners association, one is under foreclosure, the other one is empty with a sign for sale/rent and my former home in which the buyer/speculator lived till end 2007 is rented out for the paltry sum of $1,800 a month. the buyer himself has moved to mobile home park. don't know whether he could afford to buy a trailer or just rent one. how do i know all that? i helped out a former neighbour and good friend who is handling whatever business i still have in the U.S. of A.

"Not only European and Latin American companies buy US residential real estate develpoments but so do Japanese, Chinese, Singaporean and just about any other nationality that feels like doing so."

where's the proof? the japanese got burned already in the 1980s, potential foreign buyers were and still p*ssed off by IRS and immigration officials after tightening the rules because of sept 11. i sold my home and the home i built for a german friend because my wife was told in 2003 when arriving from Europe "owning a house is no valid reason to enter the United States!"

1.) Your post did not make it clear that you were talking about 4 buyers. I admit I misunderstood that statement but my original contention stands; Vic is right in claiming that there are (were) lots of foreign speculators in the US real estate market. Also, I did not intend to sound as if you are not welcome in the US. You are.

2.)Where's the proof? Simply Google "Foreign Investment in US housing development". You'll find lots of it.

3.) What does immigration have to do with anything? Most foreign speculators invested from their home countries with no intention of ever living in the houses or condos that they bought.

Edited September 28, 2008 by Groongthep

[lannarebirth]

Summary of Draft Proposal,... .has further details of Bailout plan:

Office of Speaker Nancy Pelosi -- Sept. 28, 2008

REINVEST, REIMBURSE, REFORM

IMPROVING THE FINANCIAL RESCUE LEGISLATION

Significant bipartisan work has built consensus around dramatic improvements

to the original Bush-Paulson plan to stabilize American financial markets --

including cutting in half the Administration' s initial request for $700 billion and

requiring Congressional review for any future commitment of taxpayers' funds.

If the government loses money, the financial industry will pay back the taxpayers.

3 Phases of a Financial Rescue with Strong Taxpayer Protections

* Reinvest in the troubled financial markets ... to stabilize our economy and insulate Main Street from Wall Street

* Reimburse the taxpayer ... through ownership of shares and appreciation in the value of purchased assets

* Reform business-as- usual on Wall Street ... strong Congressional oversight and no golden parachutes

...cont'd... .

http://www.dealbreaker.com/

[scyriacus]

....has further details of Bailout plan:....

no time for bail out, high time for jail in............

when 1 bankrobber robs 1 bank, police hunts him down until the money is found and returned. when 100 greedy millionaires rob 100 banks, where is the police? where is the money? instead the innocent victims are asked: "we need fresh money". thats american way of life, isnt it?

[lannarebirth]

Americans, we may still be on the verge of a worldwide depression. There is absolutely no guarantee the emergency bailout will prevent it. Now ask yourselves, what party would you like to be in power during such a painful time, that could last a decade? The party of Franklin Delano Roosevelt who did respond to a crisis by creating great social programs that saved millions of lives or the party of George W Bush, who never met a welfare for the rich program he didn't like? I contend there is blame to go all around, both parties and also most of the American people who played along. The blame is only valuable to help us figure out how we got here, how we can start to fix it, and how we can prevent it from happening again. Now we must deal with the bad reality as it is now. And there is a big election coming up which offers a clear choice. Your move.

Surely by now, you've seen all the YouTube footage on the FAN/FRE debacle. Overwhelmingly Democrat originated. I do not put it past the evil Republicans however to have engineered the timing of the blowup and revelations for the election. I vote for "none of the above".

[PeaceBlondie]

I don't share well with governments. I hope peaceblondie doesn't read this, being exIRS .

I saw that! But I agree. Minimize your taxes, legally. Besides, you can spell my status EX-irs.

[flying]

Surely by now, you've seen all the YouTube footage on the FAN/FRE debacle. Overwhelmingly Democrat originated. I do not put it past the evil Republicans however to have engineered the timing of the blowup and revelations for the election. I vote for "none of the above".

You see........Now THAT would be true Democracy!!

Why is there no "None Of The Above" On all ballots? There should be if this is a true Democracy

[LaoPo]

I didn't know 80%+ loans weren't an option in Europe. Well, maybe Europe will avoid many of the problems we are facing. It's is difficult for a borrower to walk away from 20%+ equity.

It's is still quite easy to get a mortgage if you can document income and have a high fico or 20% downpayment. If you have an average FICO (680+) you can most likely qualify for a 95% loan to value loan. Personally, I think the equity is king and FICO can be missleading.

That's the difference between EU and US and I think the mortgage industry in the EU (apart from a country like Spain; but that's another story with another cause) is in a much better shape than the US.

Speaking about Spain:

House sales dropped -26% in this year to July, whilst mortgage lending dropped -33%...

Spain is on the verge of a recession. More countries to follow.

http://news.bbc.co.uk/2/hi/business/7637319.stm

LaoPo

Edited September 28, 2008 by LaoPo

[siamamerican]

That's the difference between EU and US and I think the mortgage industry in the EU (apart from a country like Spain; but that's another story with another cause) is in a much better shape than the US.

Mortgages are now hard to get in EU and one has to come up with a real GOOD story and income papers with long job contracts or otherwise....NO mortgage

Another -long forgotten to talk about issue- are CREDIT CARDS (and DEBIT cards) causing debts problems in the US.

Credit Cards in the US, but also in Australia are in common use, unlike in Europe where the man-in-the-street NEVER uses a credit card. He pays either cash but also mostly with a debit card, knowing he has a FIXED credit amount which is not very much in most cases. It wouldn't be more than 1 or max 2 months salary, depending how high his salary would be of course.

I read in a report that the average American has 7 Credit Cards Unheard of in Europe.

Personally, I NEVER use a credit card, unless for payments abroad for airline tickets (but also mostly done online, payment per bank) and hotels or meals in more expensive restaurants. Staying in my own country I seldom use a credit card; just sometimes for buying Vitamines......in the US

My payment behavior is the same for about 95% of the population, probably more.

LaoPo

Never understood our addiction to credit cards. It's common sense, you would think, that not living within your means ends badly. I understand government borrowing for infrastructure, but individuals are doing it for a flat screen TV.

Just opened my wallet and counted 7 cards. The count is average, but there is solace in the $0 balances on all 7.

America definitely has problems -– we are far from perfect. This decade has really hurt our reputation and being at or near the top welcomes more criticism, IMO, than is due. Many economies have exorbitant debt.

Country --- Public debt % of GDP ---Info Date

 Japan 195.5 2008 [1]

 Italy 104 2007

 Singapore 101.2 2007 est.

 Greece 89.7 2007 est.

 Belgium 84.9 2007 est.

 Norway 75.1 2007 est.

 Canada 68.5 2007 est.

 France 64 2007 est.

 Portugal 63.6 2007 est.

 Germany 63.1 2007 est.

 United States 60.8 2007 est.

To be fair, we deserve much of the criticism that has piled on of late. E.g., the war.

Edited September 28, 2008 by siamamerican

[LaoPo]

Never understood our addiction to credit cards. It's common sense, you would think, that not living within your means ends badly. I understand government borrowing for infrastructure, but individuals are doing it for a flat screen TV.

Just opened my wallet and counted 7 cards. The count is average, but there is solace in the $0 balances on all 7.

America definitely has problems -– we are far from perfect. This decade has really hurt our reputation and being at or near the top welcomes more criticism, IMO, than is due. Many economies have exorbitant debt.

Country --- Public debt % of GDP ---Info Date

 Japan 195.5 2008 [1]

 Italy 104 2007

 Singapore 101.2 2007 est.

 Greece 89.7 2007 est.

 Belgium 84.9 2007 est.

 Norway 75.1 2007 est.

 Canada 68.5 2007 est.

 France 64 2007 est.

 Portugal 63.6 2007 est.

 Germany 63.1 2007 est.

 United States 60.8 2007 est.

To be fair, we deserve much of the criticism that has piled on of late. E.g., the war.

You took the numbers from this link

http://en.wikipedia.org/wiki/List_of_count..._by_public_debt

BUT, "The neutrality and factual accuracy of this article are disputed." Wikipedia.

The numbers you posted are provided by the CIA World Factbook. The problem with them (CIA) is that everybody knows that the REAL numbers are not known and that the US (not meant as bashing..) are -artificially- changing their numbers regarding the debt in %'s of the GDP to look better than they actually are. ***

A lot of countries creatively manage their ''bookkeeping'' so to speak and European -EU- members are also champions is altering the numbers a bit in order to follow the agreed upon figures, set by the members, which should not exceed 60% debt of the GDP.

A few countries on this list seem odd to me; Norway for instance is an extremely wealthy country because of their oil, gas and water turbine energy which they sell abroad. That they would have 75% in debt of the GDP seems unreal with just 4,8 Million people.

Found this link after I posted the above: http://en.wikipedia.org/wiki/Talk:List_of_...lic_debt#Norway

Canada: http://en.wikipedia.org/wiki/Talk:List_of_...bt#Canada_again

The same for Singapore; I can't really understand that figure too -101% debt of GDP- with just 4,6 Million people or so. With a powerful Global company like Temasek ??

The Netherlands: the same CIA quotes 46,20% whilst official Dutch numbers for 2007 are 39,4% of GDP or € 219 Billion.

For 2008 the number will drop further to 34,8% or € 206 Billion. So: the CIA World Factbook is wrong here too.

*** http://en.wikipedia.org/wiki/The_World_Factbook

LaoPo

Edited September 28, 2008 by LaoPo

[BEENTHEREDONETHAT]

Now that they have agreed on the 700Billion bail out, can anyone tell me who gets the money? Do the borrowers for the mortgage get it? Are these houses just written off or is there going to be a big fire sale that will put the whole market into a termoil.

I think in the end it will go into the banks (who caused the problem). And they will finiggle the books so they get to keep it and give the executives raises. The tax payer will see the leftovers, if any.

[harrry]

If notes can be made of plastic as Australian ones are I am wondering if they can be made of foam plastic so when we keep them under the mattress we can all get a good nights sleep.

Also does the US guarantee on deposits apply to foreigners or does it only apply to Americans as their Americans with Disabilities act does.

[Naam]

Americans, we may still be on the verge of a worldwide depression. There is absolutely no guarantee the emergency bailout will prevent it. Now ask yourselves, what party would you like to be in power during such a painful time, that could last a decade? The party of Franklin Delano Roosevelt who did respond to a crisis by creating great social programs that saved millions of lives or the party of George W Bush..... Your move.

NOT YOUR PARTY, Sorry

american friends,

you were intelligent enough to make the right choice eight years ago and elect the texan hero who protected your families, properties and your american way of life by hitting hard on the powerful nation Afghanistan which threatened to invade the United States and occupy California.

the hero removed also the terrible dictator of Iraq who was on the verge wiping out your cities and other cities in Europe with his stockpile of weapons of mass destruction within

45 minutes. i urge you to make the right choice on november 4th and vote for McCain

.

[Wrong Turn]

That's the difference between EU and US and I think the mortgage industry in the EU (apart from a country like Spain; but that's another story with another cause) is in a much better shape than the US.

Mortgages are now hard to get in EU and one has to come up with a real GOOD story and income papers with long job contracts or otherwise....NO mortgage

Another -long forgotten to talk about issue- are CREDIT CARDS (and DEBIT cards) causing debts problems in the US.

Credit Cards in the US, but also in Australia are in common use, unlike in Europe where the man-in-the-street NEVER uses a credit card. He pays either cash but also mostly with a debit card, knowing he has a FIXED credit amount which is not very much in most cases. It wouldn't be more than 1 or max 2 months salary, depending how high his salary would be of course.

I read in a report that the average American has 7 Credit Cards Unheard of in Europe.

Personally, I NEVER use a credit card, unless for payments abroad for airline tickets (but also mostly done online, payment per bank) and hotels or meals in more expensive restaurants. Staying in my own country I seldom use a credit card; just sometimes for buying Vitamines......in the US

My payment behavior is the same for about 95% of the population, probably more.

LaoPo

Never understood our addiction to credit cards. It's common sense, you would think, that not living within your means ends badly. I understand government borrowing for infrastructure, but individuals are doing it for a flat screen TV.

Just opened my wallet and counted 7 cards. The count is average, but there is solace in the $0 balances on all 7.

Credit Cards

late payments on credit cards have been historically high in the last 2 years, in the US.

America is a consumer culture. "Shopping is the national pastime." -- an author I've forgotten.

70% of the US economy is propelled by consumer spending. Credit cards are pushed onto people. The credit card companies study their markets very thoroughly, and target teens and Univeristy students. Statistically, younger people usually stay with their card for many, many, years before changing to another company.

I too, have 3 credit cards here in Asia. The balance is $0. These are for emergencies. A motorcycle accident, or the need to buy a plane ticket immediately and fly back to the US in case of a family emergency, etc.

In the US, credit cards are basically given to a dog or a cat. And even if you can't get a CC, you can buy your new big flat-screen TV with the financing at these mega-stores like Best Buy, etc.

I'm debt free, and happier this way.

Edited September 29, 2008 by Wrong Turn

[flying]

hitting hard on the powerful nation Afghanistan which threatened to invade the United States and occupy California.

Yes we have had the same high success rate that our Russian Brothers had there

in 1978-1989?

DOH!!!!!!!!

[midas]

America definitely has problems -– we are far from perfect. This decade has really hurt our reputation and being at or near the top welcomes more criticism, IMO, than is due. Many economies have exorbitant debt.

To be fair, we deserve much of the criticism that has piled on of late. E.g., the war.

WOW siamamerican what did you say in an earlier post ?

" Maybe we are on a 200+ year lucky streak " ? I think your luck has run out.........................

[siamamerican]

BUT, "The neutrality and factual accuracy of this article are disputed." Wikipedia.

The numbers you posted are provided by the CIA World Factbook. The problem with them (CIA) is that everybody knows that the REAL numbers are not known and that the US (not meant as bashing..) are -artificially- changing their numbers regarding the debt in %'s of the GDP to look better than they actually are. ***

A lot of countries creatively manage their ''bookkeeping'' so to speak and European -EU- members are also champions is altering the numbers a bit in order to follow the agreed upon figures, set by the members, which should not exceed 60% debt of the GDP.

Yep, that is where the numbers came from. Public debt was listed on a few other sights that did vary, but the US was far from the top of the list on these sites also. What the number doesn't show is the US future socail security and medicare obligations. Both programs can't run like they do today if we want to stay solvent as a nation. I'm sure we will fix both, because we really don't have a choice.

Looks like the Asian markets aren't too excited about the bailout plan. I sold deep in the money calls last week to protect the gains I made the week before. Now I'm wonderring if I should have stayed in cash a couple more months.

[siamamerican]

America definitely has problems -– we are far from perfect. This decade has really hurt our reputation and being at or near the top welcomes more criticism, IMO, than is due. Many economies have exorbitant debt.

To be fair, we deserve much of the criticism that has piled on of late. E.g., the war.

WOW siamamerican what did you say in an earlier post ?

" Maybe we are on a 200+ year lucky streak " ? I think your luck has run out.........................

No, unlike yourself, I realize that people and nations aren't perfect. Get a grip on reality and drop the petty insults. Norway is wealthiest nation on a per capita basis and its financial system had a complete melt down in the early 90s.

Fools like yourself can't understand how successful people and nations adapt. Admitting your mistakes and overcoming challenges is what differentiates winners from people like yourself.

[midas]

Public debt was listed on a few other sights that did vary, but the US was far from the top of the list on these sites also. What the number doesn't show is the US future socail security and medicare obligations. Both programs can't run like they do today if we want to stay solvent as a nation. I'm sure we will fix both, because we really don't have a choice.

Lets see - social security and medicare obligations that no one knows how to " fix"....

crumbling infrastructure and school's that are also physically crumbling....

a war in Iraq that could go on for another hundred years according to one candidate....

people to their necks with consumer debt....

A 700 billion dollar bailout.....

and you had the nerve to say yesterday " I wonder why so many people want to become citizens? "

I have no idea

[midas]

Fools like yourself can't understand how successful people and nations adapt. Admitting your mistakes and overcoming challenges is what differentiates winners from people like yourself.

That is classic !

Then when will GWB admitt " the war " as you referred to it was a mistake ??!

[siamamerican]

Credit Cards

late payments on credit cards have been historically high in the last 2 years, in the US.

America is a consumer culture. "Shopping is the national pastime." -- an author I've forgotten.

70% of the US economy is propelled by consumer spending. Credit cards are pushed onto people. The credit card companies study their markets very thoroughly, and target teens and Univeristy students. Statistically, younger people usually stay with their card for many, many, years before changing to another company.

I too, have 3 credit cards here in Asia. The balance is $0. These are for emergencies. A motorcycle accident, or the need to buy a plane ticket immediately and fly back to the US in case of a family emergency, etc.

In the US, credit cards are basically given to a dog or a cat. And even if you can't get a CC, you can buy your new big flat-screen TV with the financing at these mega-stores like Best Buy, etc.

I'm debt free, and happier this way.

Credit card debt has gotten out of hand. I think credit card debt actually dropped during the refi boom, but now the equity isn't there to do debt consolidation loans. Those loans actually perpetuated the bad habits. The borrowers would just proceed to rack up the balances afterwards.

In the end, college students and all borrowers for the most part, know exactly what they are doing. Nobody is holding a gun to their head. I racked $1,400 of CC debt in college and it was fun until I had to pay it off. We need to stop making exscuses for financially irresponsible people. If you want to live beyond your means, then you are obligated to pay the consequences.

[PeaceBlondie]

Steppenwolf (John Kay) said in 1968 about the US, "now we are fighting a war over there - no matter who's the winner, we can't pay the cost." I heard him say the same thing in 1985, and he said that nothing had changed. So now, 23 years later....until this financial meltdown, you could almost attribute 95% of the US deficit to wars. What a man sows (plants), that shall he also reap (harvest).

[siamamerican]

Fools like yourself can't understand how successful people and nations adapt. Admitting your mistakes and overcoming challenges is what differentiates winners from people like yourself.

That is classic !

Then when will GWB admitt " the war " as you referred to it was a mistake ??!

Probably never. What is your point?

[siamamerican]

Steppenwolf (John Kay) said in 1968 about the US, "now we are fighting a war over there - no matter who's the winner, we can't pay the cost." I heard him say the same thing in 1985, and he said that nothing had changed. So now, 23 years later....until this financial meltdown, you could almost attribute 95% of the US deficit to wars. What a man sows (plants), that shall he also reap (harvest).

Interesting, how did you come up with 95%. Seems quite high. Regardless, there are countless reasons why not to war.

[lannarebirth]

Steppenwolf (John Kay) said in 1968 about the US, "now we are fighting a war over there - no matter who's the winner, we can't pay the cost." I heard him say the same thing in 1985, and he said that nothing had changed. So now, 23 years later....until this financial meltdown, you could almost attribute 95% of the US deficit to wars. What a man sows (plants), that shall he also reap (harvest).

It makes more sense if you see the US economy and citizenry as being simply a tool of other interests. Remember however, everything has it's season.

[BEENTHEREDONETHAT]

Am I missing something here or has anyone heard of them changing the banking laws to prevent this from happening again? If you had a leaky water supply wouldn't it make sense to fix it before you refilled it?

[ray23]

So far waht I have seen today this may not be the Chritmas present wanted wrapped differently now. Even the people who wrapped it don't seem to be all that happy with it. It has not passed into law yet, or did I miss somehitng?

[Naam]

So far waht I have seen today this may not be the Chritmas present wanted wrapped differently now. Even the people who wrapped it don't seem to be all that happy with it. It has not passed into law yet, or did I miss somehitng?

you did not miss anything Ray. look what global markets think of the Christmas present.

[ray23]

Havent followed it that closely but it seems to have had a negative effect world wide and it hasn't even passed yet. The only numbers I saw was a to the Thai market and that was early morning dropped 3%

[pkrv]

Am I missing something here or has anyone heard of them changing the banking laws to prevent this from happening again? If you had a leaky water supply wouldn't it make sense to fix it before you refilled it?

Err no - And I haven't heard any calls to claw the money back either - odd that isn't it.

[LaoPo]

BUT, "The neutrality and factual accuracy of this article are disputed." Wikipedia.

The numbers you posted are provided by the CIA World Factbook. The problem with them (CIA) is that everybody knows that the REAL numbers are not known and that the US (not meant as bashing..) are -artificially- changing their numbers regarding the debt in %'s of the GDP to look better than they actually are. ***

A lot of countries creatively manage their ''bookkeeping'' so to speak and European -EU- members are also champions is altering the numbers a bit in order to follow the agreed upon figures, set by the members, which should not exceed 60% debt of the GDP.

Yep, that is where the numbers came from. Public debt was listed on a few other sights that did vary, but the US was far from the top of the list on these sites also. What the number doesn't show is the US future socail security and medicare obligations. Both programs can't run like they do today if we want to stay solvent as a nation. I'm sure we will fix both, because we really don't have a choice.

Looks like the Asian markets aren't too excited about the bailout plan. I sold deep in the money calls last week to protect the gains I made the week before. Now I'm wonderring if I should have stayed in cash a couple more months.

If you would have listened a little better to a few here on the board, including myself, you wouldn't have to wonder now if you should stay cash....

Stay cash, grab your gains, and stay cash again. Sit still..and don't move until the hairdresser is finished. He's a slow old guy !

LaoPo