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

[LaoPo]

NOT one of the links in the past 4 or 5 messages is working....

LaoPo

[flying]

NOT one of the links in the past 4 or 5 messages is working....

LaoPo

Actually tyhe links work but the redirect does not

You need to copy & paste the link into a new window

[lannarebirth]

Well, US markets have been climbing for 30 years on the bak of government largesse, but this time is different. Gonna tank, find a short term bottom, rally a couple months back to here or a little higher, then straight to the 2002 lows, where it's going to wallow for a good long while. Welfare for the gamblers, that's just a bridge to far.

Edited October 3, 2008 by lannarebirth

[flying]

The 700 billion bailout bill is now 810 billion. They have added a few tax breaks that have to be paid for. The one I really like is a tax break for makers of childrens wooden arrows. Are these people for real? And by the way the, increase in FDIC on your saving in the bank is raised from $100,000 to $250,000 for one year then it drops back to $100,000

from http://www.mcclatchydc.com/227/story/53357.html

I am glad you mentioned that. When I first heard it I thought the guy on TV was mocking the bailout. I mean here is in their own words the most important bill of all time & the roll in the childrens arrow break. What??????

[LaoPo]

House approves historic bailout package

Vote clears way for Bush's signature of $700 billion plan

By Robert Schroeder, MarketWatch

Last update: 1:33 p.m. EDT Oct. 3, 2008

WASHINGTON (MarketWatch) -- The U.S. House of Representatives voted to approve a revised $700 billion bailout plan for the financial markets Friday, just four days after rejecting the original version and clearing the way for President Bush to sign the historic package.

The House's vote follows the Senate's approval on Wednesday and gives the Treasury secretary extraordinary power to buy bad assets from financial companies, boosts federal bank insurance and requires the government to modify some mortgages. It also contains a host of controversial tax breaks and some caps on executive pay.

House lawmakers voted 263 to 171 to pass the bill, reversing the chamber's rejection of it on Monday, which sent the Dow Jones Industrial Average into a record 777-point freefall.

House leaders were cautiously optimistic before the vote, but uncertainty over its fate lingered until the last minute. Many members said the bill wasn't perfect but that action was needed to get the flow of credit going again and to help taxpayers.

"If we don't act now, those who are least to blame for this mess will suffer the most," said Rep. Judy Biggert, R-Ill

Democrats also warned that the economy would suffer without passage of the bill.

"We are facing an abyss," said Rep. Paul Kanjorski of Pennsylvania, who chairs a House Financial Services subcommittee on capital markets. "The urgency is clear," added House Speaker Nancy Pelosi. "We are addressing the real pain felt by Mr. and Mrs. Jones on Main Street," she said, in contrast to the Dow Jones Industrial Average and Wall Street.

The Senate approved the bill on Wednesday night by a vote of 74 to 25 following the 228 to 205 defeat on Monday in the House.

Core of plan remains same

The core of the plan authorizes the Treasury secretary to buy as much as $700 billion in bad assets from financial companies in a bid to get credit flowing to consumers and businesses. It allows the Federal Deposit Insurance Corp. to raise its deposit-insurance cap to $250,000 from $100,000 and also requires government agencies to modify troubled mortgages. The bill allows regulators to suspend certain accounting rules for securities that some argue have contributed to the credit crisis.

Stocks bounced back after two days of losses Friday morning, despite a government report that the U.S. economy lost 159,000 jobs in September, the worst decline in five years. See Market Snapshot.

Earlier this week, House Republican Leader John Boehner said on Fox News that the drop in the Dow had a "chilling" effect on many House members and their constituents.

President Bush called about three dozen House members Thursday, the White House said. He heard from some members that they would switch their "no" votes, according to White House spokesman Tony Fratto.

On Monday, only 65 Republicans had supported the White House plan while 133 voted against it.

Some dissenters remained unmoved on Friday, however, such as Rep. David Dreier, R-Calif., who said Friday morning on the House floor that he wasn't going to give Treasury Secretary Henry Paulson "a blank check."

Meanwhile, a leading House Democrat said that the bill was just the first step in repairing the financial markets.

"We will be back next year to do some serious surgery on the financial structure," said Rep. Barney Frank, D-Mass., who chairs the House Financial Services Committee.

End of Story

http://www.marketwatch.com/news/story/hous...9-FB465F185BE3}

LaoPo

[LaoPo]

Sorry; double post.

LaoPo

Edited October 3, 2008 by LaoPo

[flying]

once in a while i like to copy and paste:

NEW YORK (Reuters) - U.S. banks' borrowed a record $367.8 billion per day from the Federal Reserve in the latest week, as financial institutions relied heavily on the lender of last resort amid the most severe credit crisis since the Great Depression.

http://feeds.reuters.com/~r/reuters/busine...E4918O020081002

Here it is

http://www.reuters.com/article/companyNews...G00134220081002

Good though that we lend them 700 billion more to free up credit & now they can lend it back to us for a fee

Edited October 3, 2008 by flying

[Lickey]

So the bail-out bill has been passed,,

Reminds me of a Simpsons sketch, The one where Homers house is on fire and his neighbour rescues him from upstairs by throwing a mattress on the lawn, then throwing Homer out to land on it, Homer hits the matress and bounces straight back into the downtairs window and the fire!!

2 more weeks and they will need to print more money.

[flying]

Funny that the spoiled brat of a stock market does not seem thrilled by the news of the bailout.

I guess the unemployment / loss of 159,000 jobs last month does not inspire.

http://www.forbes.com/afxnewslimited/feeds...afx5505666.html

Also the possible Fed rate change perhaps?

In any case.....

[lannarebirth]

Funny that the spoiled brat of a stock market does not seem thrilled by the news of the bailout.

I guess the unemployment / loss of 159,000 jobs last month does not inspire.

http://www.forbes.com/afxnewslimited/feeds...afx5505666.html

Also the possible Fed rate change perhaps?

In any case.....

That's what happens when you get rid of the short sellers. Everyone that wants to or needs to buy it is already in. 1065-1070 is 61.8% retracement of rally from 2002. It's a no brainer buy and I expect to see the PPT defend it mightily, but if the CDS auctions don't go well next week, there will be litte they can do including surprise Fed cuts.

[cclub75]

but if the CDS auctions don't go well next week, there will be litte they can do including surprise Fed cuts.

Don't forget that they just received... a check of 700 billions USD ! That could help.

;-)

One hour after the vote, Paulson was starting to hire people... The mantra "we need 45 days to put the plan in action" is BS I think.

Anyway.

Their friends from Saudi Arabia could help too (they are already very polite with oil... not doing anything against the fall of prices).

So they could be polite also by buying some CDS.

Anyway, I think people start to understand that the "plan circus" has only one aim : gain time (save some friend's <deleted> too). But mainly : gain time.

As for the FED and rate cut, i would have agreed with you a few weeks ago. But now, with the striking fall of Euro (because obviously it's going to be a real mess in UE)... there is a window of opportunity for Bernanke. The ECB will cut. It's a certainty. Recession starts to be too visible in Europe (latest victim : France, with negative growth on Q2 and Q3).

www.bloomberg.com/apps/news?pid=newsarchive&sid=aObhMio.Rqx4

Everything is relative. The fall of Euro could mask a very negative effect of a rate cut on the dollar.

Edited October 3, 2008 by cclub75

[flying]

It's a -bloody- scandal that these kind of mortgages are still offered and sold to the weaker in society !

It also shows the American financial and mortgage industry didn't learn a single thing of the disaster called the sub-slime crisis and especially from a company like Fannie Mae (possible Freddie Mac also) which was saved with taxpayers money.

What a bloody scandal !

Here is a classic case for you

http://www.cnn.com/2008/US/10/03/eviction....empt/index.html

Lady is 90 years old

In 2004 they give her a 30 year mortgage at 6.3%

Now.........THE SAME DAY SHE TAKES OUT A $11,380. LINE OF CREDIT !!!!

(edit: Please note she is 86 & gets both a 30 yr fixed & a credit line ! )

So now of course 4 years later she is in default. They try 30 times to evic & forclose. Finally she shoots herself non-fatally twice

Fannie Mae forgives the debt & gives her the house.

Hmmmm Could this explain the run up in gun sales recently?

1776---2008

Here Lies Democracy

RIP

Edited October 4, 2008 by flying

[OriginalPoster]

Don't forget that the leading, and epidemic cause of both FORECLOSURES and BANKRUPTCIES in the United States is because of people getting caught with ruinous MEDICAL bills. This is for people who are both insured and uninsured (about 50 million Americans). The US does not have the government health care programs of most civilized Western countries. Cause and effect again. Consumer spending won't get the US out of this one, the previous spending during bad times was based on inflated perceived wealth in housing and retirement plans, now gone. Yes, fasten your seat belts. Shopping is 70 percent of the US economy and its previous power rippled throughout the world. Yes, we are reaping what we have sowed and there is no instant cure, not the rescue package and not the inevitable election of President Obama, the disease is just too advanced for a painless cure. I truly believe we are witnessing the end of the American dominated era and as an American the saddest part to me is how we did this to ourselves, how America and the world deals with this is a big question mark.

Where are you getting that statistic that "the leading, and epidemic cause of both FORECLOSURES and BANKRUPTCIES in the United States is because of people getting caught with ruinous MEDICAL bills"?

How about Harvard?

Or if you consider the top American academy (Obama's law school) too elite and left wing for you, how about right wing US News and World Report?

http://health.usnews.com/usnews/health/bri...h/hb050202c.htm

http://www.consumeraffairs.com/news04/2005...ptcy_study.html

Thank you for the links and for the ad hominem sniping.

[BEENTHEREDONETHAT]

Many are applauding the passing of the bailout bill. I for one think it was a mistake, it will improve things for a short time 3 to 6 months and then another bailout will be required. The bailout weekens the dollar and will cause inflation. Rather than having a couple of years of hard times this could drag on for generations. Don't think anyone can argue that it weakens the dollar that is already shakey. I hope I am wrong. Not normally a doom and gloom merchant but this mess tends to remove all traces of optomism.

Should mention that I am not on either of the gravy trains. The real estate that has to keep going up, up, up or the stock market that also must go up, up, up. Like someone said you take the stairs up and the elevator down. I applaud those that saw the problem coming and adjusted their finances to benefit or at least not lose. They are in the minority.

[flying]

Many are applauding the passing of the bailout bill. I for one think it was a mistake, it will improve things for a short time 3 to 6 months and then another bailout will be required. The bailout weekens the dollar and will cause inflation. Rather than having a couple of years of hard times this could drag on for generations. Don't think anyone can argue that it weakens the dollar that is already shakey. I hope I am wrong. Not normally a doom and gloom merchant but this mess tends to remove all traces of optomism.

Should mention that I am not on either of the gravy trains. The real estate that has to keep going up, up, up or the stock market that also must go up, up, up. Like someone said you take the stairs up and the elevator down. I applaud those that saw the problem coming and adjusted their finances to benefit or at least not lose. They are in the minority.

I agree with you BTDT & also I am not on either train.

I Read this today

http://www.atimes.com/atimes/Global_Economy/JJ04Dj03.html

"The new administration will inherit, not only the largest fiscal and external deficits in US history, but a huge fiscal debt at about 90% of gross domestic product (GDP), and totally lose control of monetary policy, which cannot be reined in without sending interest rates skyrocketing. The debt crisis may become even more unsustainable if defaults continue, both nationally and internationally. "

[midas]

Funny that the spoiled brat of a stock market does not seem thrilled by the news of the bailout.

I guess the unemployment / loss of 159,000 jobs last month does not inspire.

http://www.forbes.com/afxnewslimited/feeds...afx5505666.html

Also the possible Fed rate change perhaps?

In any case.....

I wonder if the Bush Adminisrtatio would have passed this bill of they

were 100% confident of winning the election. Maybe it is a set up

for the Democrats

[Naam]

Many are applauding the passing of the bailout bill. I for one think it was a mistake, it will improve things for a short time 3 to 6 months and then another bailout will be required. The bailout weekens the dollar and will cause inflation. Rather than having a couple of years of hard times this could drag on for generations.

your arguments are valid BT but the alternative (doing nothing) would be much more horrible than "a couple of years of hard time". whatever the outcome will be, the average Joe will be the loser. it was always like this and will always be like this.

all afore-said of course in my [not so] humble opinion

[siamamerican]

It's a -bloody- scandal that these kind of mortgages are still offered and sold to the weaker in society !

It also shows the American financial and mortgage industry didn't learn a single thing of the disaster called the sub-slime crisis and especially from a company like Fannie Mae (possible Freddie Mac also) which was saved with taxpayers money.

What a bloody scandal !

Here is a classic case for you

http://www.cnn.com/2008/US/10/03/eviction....empt/index.html

Lady is 90 years old

In 2004 they give her a 30 year mortgage at 6.3%

Now.........THE SAME DAY SHE TAKES OUT A $11,380. LINE OF CREDIT !!!!

(edit: Please note she is 86 & gets both a 30 yr fixed & a credit line ! )

So now of course 4 years later she is in default. They try 30 times to evic & forclose. Finally she shoots herself non-fatally twice

Fannie Mae forgives the debt & gives her the house.

Hmmmm Could this explain the run up in gun sales recently?

1776---2008

Here Lies Democracy

RIP

Democracy will be fine. We are the midst of a major correction.

The old lady you refer to is the exception. I wonder what she did with all the money she received from the mortgages. She made a bad choice and it would be wrong to forbid older people the freedom of choice.

The average Joe's mortgages are the issue. Many of these borrowers never would have been able to obtain a mortgage, if the lending standards weren't loosened over the last 10 years. Just 3 years ago politicians were bragging about the drastic increase in homeownership. It was a warm and fuzzy story that constituents loved.

Congress requires Fannie and Freddie to serve undeserved areas (low income or minority ). These areas are difficult to serve with conservative 30 year mortgages. So what do you do – you expand guidelines to allow little to no payment and high debt ratios. Problem solved and years go by with everybody feeling wonderful that so many can afford the American dream of home ownership.

The dream kept getting better. Not only were more low and middle income people home owners, these same borrowers realized unfathomable financial freedom. I need a new car, pay the kids college.... all that I need to do is refinance. Hel_l, that is how I paid for the 2 week trip to Europe last year.

In the end, no politicians were brave enough to stop the run away train. Can you imagine a senator telling his constituents that he was putting an end to the madness. Not if they wanted to get reelected.

[midas]

[

The old lady you refer to is the exception. I wonder what she did with all the money she received from the mortgages. She made a bad choice and it would be wrong to forbid older people the freedom of choice.

Now you REALLY HAVE lost the plot !

[siamamerican]

[

The old lady you refer to is the exception. I wonder what she did with all the money she received from the mortgages. She made a bad choice and it would be wrong to forbid older people the freedom of choice.

Now you REALLY HAVE lost the plot !

Hey genius, please tell – what is the plot?

For the love of god, please try to post a coherent thought. Your rants about the evil empire reek of jealousy and make little sense.

[midas]

[

The old lady you refer to is the exception. I wonder what she did with all the money she received from the mortgages. She made a bad choice and it would be wrong to forbid older people the freedom of choice.

Now you REALLY HAVE lost the plot !

Hey genius, please tell – what is the plot?

For the love of god, please try to post a coherent thought. Your rants about the evil empire reek of jealousy and make little sense.

You live in a nation that has no concept whatsoever about fiscal discipline

which has landed you in this mess. Its all about give out the money to anyone today

never mind about tommorow ! What possible sense is there giving " the choice "

to this lady in the first place at 90 years old. It shouldnt be her choice at that

age it should be the ones taking care of the funds which they most likely

borrow from other anyway - like your possible next President says ( god forbid ! )

" You just dont get it "!!

[LaoPo]

It's a -bloody- scandal that these kind of mortgages are still offered and sold to the weaker in society !

It also shows the American financial and mortgage industry didn't learn a single thing of the disaster called the sub-slime crisis and especially from a company like Fannie Mae (possible Freddie Mac also) which was saved with taxpayers money.

What a bloody scandal !

Here is a classic case for you

http://www.cnn.com/2008/US/10/03/eviction....empt/index.html

Lady is 90 years old

In 2004 they give her a 30 year mortgage at 6.3%

Now.........THE SAME DAY SHE TAKES OUT A $11,380. LINE OF CREDIT !!!!

(edit: Please note she is 86 & gets both a 30 yr fixed & a credit line ! )

So now of course 4 years later she is in default. They try 30 times to evic & forclose. Finally she shoots herself non-fatally twice

Fannie Mae forgives the debt & gives her the house.

Hmmmm Could this explain the run up in gun sales recently?

1776---2008

Here Lies Democracy

RIP

Democracy will be fine. We are the midst of a major correction.

The old lady you refer to is the exception. I wonder what she did with all the money she received from the mortgages. She made a bad choice and it would be wrong to forbid older people the freedom of choice.

Remarks as above make me angry, especially because you are an American yourself

Last night there was a serious documentary on television, shot in Georgia and it showed LOTS of elderly people in their homes, interviewed and in tears, who were in exactly the SAME position as the old Lady who shot herself.

Those people are now assisted by a Gentleman Lawyer and his assistant who have a day job assisting them, trying to avoid foreclosures and he was soooo angry with the people/Banks who sold them mortgages they didn't need.

The trick lies in the CASH money (cheque for 7.000, 10,000 and more) they gave those people (because they KNEW these people need that money to pay off the first 6-12 installments).

These folks are old and are FORCED upon a mortgage they didn't need, didn't understand and were asked to sign quickly a 200 page document because the man/lady involved, selling, is in a hurry...same story over and over again.

And you say this is the exception ? You say an 86 year old Lady made the WRONG DECISION ? How on earth can you say a thing like that ? How can greedy salespeople sell a mortgage to a 86 year old woman in the first place ? These people Sir, belong in jail !

I know you are in the mortgage/housing industry because you said so a few months ago yourself...and I really hope for your own peace of mind that you didn't/don't belong to those greedy mortgage sales people.

It's the mortgage industry with greedy people, selling these blood mortgages (can't find another word..) who created the subprime crisis, purely out of greed for their own wallets because of the large commissions they get.

They didn't care one single minute about the ignorant and financial weak people of whom the KNEW they couldn't afford the new, higher mortgage but at the same time these people are now forced to leave there homes. Homes they lived in for decades.

And, please don't come up with stories that these people are responsible themselves. YES, they are, but everybody who has some sense and dignity KNOWS that a greedy salesman/woman can NOT sell these blood mortgages to elderly people !

It''s a crime to do so and it's beyond my own imagination that these people can live in peace...go home and kiss their wife and kids and say...:

"I just sold a mortgage again (to a 86 year old lady) so Daddy made some money again today....".

In the same documentary it showed the enormous amounts of foreclosures and the, OUTSIDE the court, open air sales auctions of those kind of houses sold for peanuts to buyers, new buyers.

Where are the -forced out- elderly going to live ?

LaoPo

[siamamerican]

[

The old lady you refer to is the exception. I wonder what she did with all the money she received from the mortgages. She made a bad choice and it would be wrong to forbid older people the freedom of choice.

Now you REALLY HAVE lost the plot !

Hey genius, please tell – what is the plot?

For the love of god, please try to post a coherent thought. Your rants about the evil empire reek of jealousy and make little sense.

You live in a nation that has no concept whatsoever about fiscal discipline

which has landed you in this mess. Its all about give out the money to anyone today

never mind about tommorow ! What possible sense is there giving " the choice "

to this lady in the first place at 90 years old. It shouldnt be her choice at that

age it should be the ones taking care of the funds which they most likely

borrow from other anyway - like your possible next President says ( god forbid ! )

" You just dont get it "!!

The lady was 86. At what age should we declare people incompetent. Most elderly are quite capable of making choices and my point was that this crisis wasn't caused by loaning money to seniors. It was caused by loaning money to everyday Americans that wouldn't have qualified for conservative mortgages.

Exclamation points throughout your post only show your petty anger and superiority complex. What country do you live in that does no wrong?

As for Americans lacking in financial discipline. Hard to argue this point, considering our current predicament. I only hope that other countries aren't as spiteful as yourself. We don't have a lengthy history, but I think we have made some substantial economic and political contributions over the years.

Take a deep breath and try to see things from my perspective. I don't know what country you call home, but I can guarantee that I have never insulted the inhabitants as a whole.

[LaoPo]

The lady was 86. At what age should we declare people incompetent. Most elderly are quite capable of making choices and my point was that this crisis wasn't caused by loaning money to seniors. It was caused by loaning money to everyday Americans that wouldn't have qualified for conservative mortgages.

Our posts crossed, so I'm not sure if you read what I wrote:

http://www.thaivisa.com/forum/Us-Banking-C...38#entry2254038

in Bold and underligned:

And THAT, Sir, is exactly correct ! Because the mortgage industry invented new and lousy products to sell to those unqualified Americans because of their greed, not because the unqualified American asked for such products.

It was forced upon their throats, and YOU know it.

You are, exclusively, blaming the unqualified American, not the mortgage industry...bravo, not.

You really care for your fellow Americans, don't you ?

LaoPo

[Jingthing]

1776---2008

Here Lies Democracy

RIP

The founding fathers did not have shopping malls.

The founding fathers could not have imagined toxic debt, China owning our debt, communism, preemptive invasions in Iraq, or Sarah Palin using the politics of WINKING.

Americans are very confused. FREEDOM has nothing to do with the freedom to BUY and CONSUME everything you want at all times.

It is about POLITICAL FREEDOM, and had nothing to do with modern concepts of material excess.

Edited October 4, 2008 by Jingthing

[flying]

The thing I also wonder is at her age of 86

Why did they not do mortgage insurance? I mean they can also get it to protect the lender in default...as well as the usual for the likely fact she would die before it was paid back.

Very odd they had options or even that crappy reverse mortgage they shove down old folks throats these days with all the hidden fees.

Bottom line for me is Yes there are folks who should not take financing but during this whole fiasco I saw banks give crazy loans to totally unqualified folks. ( I am a building contractor )

That is why I was so against the bailout.

That is all it was a bailout for their misbehavior...the lenders I mean.

They should have got their fingers burned off

Also like many other links today I see it is not working

http://www.cnn.com/2008

/US/10/03/eviction.suicide.attempt/

index.html?iref=newssearch

It gets cut short if I post it whole plus it does not redirect anyway

Weird but I sent George a note to see

Edited October 4, 2008 by flying

[siamamerican]

It's a -bloody- scandal that these kind of mortgages are still offered and sold to the weaker in society !

It also shows the American financial and mortgage industry didn't learn a single thing of the disaster called the sub-slime crisis and especially from a company like Fannie Mae (possible Freddie Mac also) which was saved with taxpayers money.

What a bloody scandal !

Here is a classic case for you

http://www.cnn.com/2008/US/10/03/eviction....empt/index.html

Lady is 90 years old

In 2004 they give her a 30 year mortgage at 6.3%

Now.........THE SAME DAY SHE TAKES OUT A $11,380. LINE OF CREDIT !!!!

(edit: Please note she is 86 & gets both a 30 yr fixed & a credit line ! )

So now of course 4 years later she is in default. They try 30 times to evic & forclose. Finally she shoots herself non-fatally twice

Fannie Mae forgives the debt & gives her the house.

Hmmmm Could this explain the run up in gun sales recently?

1776---2008

Here Lies Democracy

RIP

Democracy will be fine. We are the midst of a major correction.

The old lady you refer to is the exception. I wonder what she did with all the money she received from the mortgages. She made a bad choice and it would be wrong to forbid older people the freedom of choice.

Remarks as above make me angry, especially because you are an American yourself

Last night there was a serious documentary on television, shot in Georgia and it showed LOTS of elderly people in their homes, interviewed and in tears, who were in exactly the SAME position as the old Lady who shot herself.

Those people are now assisted by a Gentleman Lawyer and his assistant who have a day job assisting them, trying to avoid foreclosures and he was soooo angry with the people/Banks who sold them mortgages they didn't need.

The trick lies in the CASH money (cheque for 7.000, 10,000 and more) they gave those people (because they KNEW these people need that money to pay off the first 6-12 installments).

These folks are old and are FORCED upon a mortgage they didn't need, didn't understand and were asked to sign quickly a 200 page document because the man/lady involved, selling, is in a hurry...same story over and over again.

And you say this is the exception ? You say an 86 year old Lady made the WRONG DECISION ? How on earth can you say a thing like that ? How can greedy salespeople sell a mortgage to a 86 year old woman in the first place ? These people Sir, belong in jail !

I know you are in the mortgage/housing industry because you said so a few months ago yourself...and I really hope for your own peace of mind that you didn't/don't belong to those greedy mortgage sales people.

It's the mortgage industry with greedy people, selling these blood mortgages (can't find another word..) who created the subprime crisis, purely out of greed for their own wallets because of the large commissions they get.

They didn't care one single minute about the ignorant and financial weak people of whom the KNEW they couldn't afford the new, higher mortgage but at the same time these people are now forced to leave there homes. Homes they lived in for decades.

And, please don't come up with stories that these people are responsible themselves. YES, they are, but everybody who has some sense and dignity KNOWS that a greedy salesman/woman can NOT sell these blood mortgages to elderly people !

It''s a crime to do so and it's beyond my own imagination that these people can live in peace...go home and kiss their wife and kids and say...:

"I just sold a mortgage again (to a 86 year old lady) so Daddy made some money again today....".

In the same documentary it showed the enormous amounts of foreclosures and the, OUTSIDE the court, open air sales auctions of those kind of houses sold for peanuts to buyers, new buyers.

Where are the -forced out- elderly going to live ?

LaoPo

I understand your point. You are referring to one situation and we don't even have the whole story. How do we regulate mortgages given to seniors? What constitutes a senior? If young people want to live beyond there means, can we forbid the elderly from doing this? Do we give them a sanity exam?

My point is that we can't solve this crisis by analyzing the extremes. The root of the problem is that mortgages were given to people that weren't financially setup to repay them. Regulations requiring a down payment and lower debt to income ratios would be a good start. As you mentioned yourself, most of Europe requires a 20% down payment. IMO the foreclosure rate would be 1/3 of what is today if borrowers had substantial equity in their homes.

Yes, I am in the finance industry. I can sleep at night knowing that 99% of our loans were conforming 30 year fixed mortgages. Our default rate is extremely low compared to industry standards. Should have we done all the loans we originated over the last 5 years - NO! Some of the loans had high loan to values and extremely high debt ratios.

I'm not righteous nor a saint. I make mistakes and do my best to not make them again. I have to look at myself in the mirror every morning and the reflection, IMO, doesn't resemble an A-HOLE.

[flying]

1776---2008

Here Lies Democracy

RIP

The founding fathers did not have shopping malls.

The founding fathers could not have imagined toxic debt, China owning our debt, communism, preemptive invasions in Iraq, or Sarah Palin using the politics of WINKING.

Americans are very confused. FREEDOM has nothing to do with the freedom to BUY and CONSUME everything you want at all times.

It is about POLITICAL FREEDOM, and had nothing to do with modern concepts of material excess.

Interesting you mention that.

Did you know that in 1776 Thomas Paine wrote a pamphlet called Common Sense?

Pretty Cool huh? Sorry I have to post a link this way as links not working today but you can google it.

http://en.wikipedia.org

/wiki/Common_Sense_(pamphlet)

[flying]

I understand your point. You are referring to one situation and we don't even have the whole story. How do we regulate mortgages given to seniors? What constitutes a senior? If young people want to live beyond there means, can we forbid the elderly from doing this? Do we give them a sanity exam?

My point is that we can't solve this crisis by analyzing the extremes. The root of the problem is that mortgages were given to people that weren't financially setup to repay them.

There you go I think you mentioned the problem & the answer.

Of course the loan is not a matter of a sanity test for the elderly but then you said...

"The root of the problem is that mortgages were given to people that weren't financially setup to repay them. "

That was & is the problem. If the lender is not smart enough to determine their ability to repay then serves them right for what happens next.

Same as if I did something irresponsible like giving my car keys to a drunk & saying here ya go take a spin I know your good for it.

or something like that

[siamamerican]

Bottom line for me is Yes there are folks who should not take financing but during this whole fiasco I saw banks give crazy loans to totally unqualified folks. ( I am a building contractor )

That is why I was so against the bailout.

That is all it was a bailout for their misbehavior...the lenders I mean.

They should have got their fingers burned off

I'm not claiming you did this (contractor isn't the builder on record), but builders were definitely pushing the envelope. Builders pushed hard for lenders to loosen up an their lending guidelines. Many builders convinced lenders to do 100% plus loans and if the lender wouldn't comply, they took their business elsewhere.

Many builders got so frustrated with the perceived tight lending standards that they began originating loans themselves. They also had a large part in forcing lenders to accept seller contributions. They would inflate the price, at times using their appraisers, and then make up to a 6% down payment on the inflated price.

Nobody held a gun to lenders heads and for that matter to borrowers heads. A lot of blame to pass around ( Lenders, government, builders, borrowers...).