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Discussion Starter #1
Boy after watching Bernanke and Paulson on C SPAN and I wouldn't trust these guy's with a broke dick dog. They talk like Las Vegas Casino Owners. They keep saying that it's because of this or that. I'd could give a rats butt what they say caused it. They were in charge for two years when it happened. They are basically saying that if they (the Treasury) buy worthless paper, second and third mortgage loans, personal loan debt, Blah blah blah. that is somehow going to boost the economy so they can borrow more money to do the same damn thing.

Let these Terds fail. No bail out.

Fact: Over the last 20 Years corporations have sent tons of US manutaturing jobs overseas. We used to have 30% of our workers in Manufacturing and 10% in finance. Now a days those numbers are reversed. Finance workers only make one thing. DEBT.
 

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I heard recently that the Feds (FBI) are investigating the first fourth companies that went under. I watched a little bit of that last night as well, Paulson was talking about buying the "troubled assets" at their "potential value" meaning using tax payer money to give these guys the financial returns they expected with their crappy business practices. No way, how is anything learned by anyone with this mentality.
 

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Well I think I am probably alone on this one.

We have to free up the banks to start lending money again to American companies who need to make payroll, ie GM, Caterpillar, etc. as well as individuals who want to buy houses, cars etc. No banks are lending money anymore because the are saddled with all these bundled undervalued mortgages. Ideally, a private investor (if one existed) would come along and buy up all this bad debt at $0.50 on the dollar and sit on it until the economy starts to rebound. Capital would free up and banks could start loaning money again. The investor could sit on the mortgages and then resell in the future when the economy is back on track and actual make money. These aren't worthless pieces of paper - they are real houses and real land. The problem is there is no private investor out there with the money or the patience to do it. The only entity with that kind of money and the time to make the investment and then wait for the return is the Fed. You guys make it seem like the gov would be throwing 700 billion dollars out the window. The 700 billion would buy actual hard assets - all the bad mortgages - and buy them at a discount and then have the opportunity to resell them in the future. It is an investment that would free up the banks to keep the economy from seizing up and keep us out of a depression.

The problem for me is more of an ideology question. Do you really want to nationalize the real estate market? Who is going to control it? Who is going to make the decision when to start selling back? Where do you draw the line when the auto industry, the airline industry, Silicon Valley all start asking for bail outs? How do you pay the individual tax payer back on "our" investment once the Fed begins to start selling these properties back when the economy rebounds? And most importantly, how do you restructure the economy so that we stop being a nation that , at the individual and corporate level, lives on credit and not capital. If we dont answer those questions, no matter the type of rescue plan/bailout, we will be right back in the situation a few years from now.

No one want to give Wall Street any money. No one wants to reward greedy investment bankers for unethical business practices. I dont want to bail out anyone because I got a mortgage I can afford but my neighbor locked in to a ARM that he knew he couldn't afford when it came due but did it anyway thinking the market would keep going up and he could jump out of it after 4 years and turn a profit. I don't want to support any of those people but the truth is, if we dont get the banks to start lending money again, we are headed towards a Depression.
 

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So the gov buys the mortgages and the banks can start lending again (hopefully with more sense) What happens to all those millions of families that cannot make their current house payments? Do they all get foreclosed on and have to rent apartments? Do they get to stay in the house rent free? Do their loans get restructured back to an interest rate they can live with? If they are foreclosed on, what will happen to the housing values, there will be millions of empty homes and no buyers.

Is this what they are trying to figure out right now and have in place by tomorrow?
 

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All very good questions. I think, unfortunately, the market needs to reset to some degree. A lot of those families are people who bought houses with no money down and subprime rates thinking that housing prices would continue to increase and they could survive off the equity they would gain in their homes or resell in a couple of years before the rates adjusted. Bad decision. I think a lot of those folks will find themselves out of luck. Is it their fault? To some degree but a lot of the blame needs to be placed on the predatory lenders who, with no regulation, were lending money to people who couldn't afford it. And some of the blame has to go to the administration of the 90s who encouraged home buying by deregulating lending practices - albeit with good intention - so that more people could afford homes.

Yes, the gov will be saddled with mortgages that are worth less today than they were 3 or 4 years ago. However, the Fed buys those now at the reduced rate, get banks to remove the burden off their assets sheets so they are willing to start lending and then the Fed sells the mortgages as the economy starts to pick up. I think you asked the $64K question (or in this case the $700 billion question). If the plan works and the economy stabilizes, whose to say that we won't continue down the same road and find ourselves in the same position 4 or 5 years from now? I think the bailout is a short term solution. The key will be how the next administration restructures the economy to require more companies to hold more capital on their books without bankrupting them and how to "motivate" everyday people to stop living on credit and hedging their incomes on risky investments like houses they should have never bought in the first place. They can figure that out over the weekend right?

ETA - Hey since I have all the answeres, I'd figure it all out but I was going to go fishing this weekend :D
 

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This is funny, bouncing back and forth between two threads on the same subject... I'm getting dizzy. :evil:

Well, the lending practices have to go back to the way they were before 1999.

10 to 20 percent down payment for a mortgage, car, boat, whatever. And fixed rates.

Good intentions have once again bit us on the ass. Life is hard folks. It cost money and commitment to buy a home. That is the way it should be. A couple needs to save up for years to get into a house. They will not want to flippently jeopardize their investment. They will not buy the biggest house they can, they will buy what they get by in. They will make sure they have enough in savings to make a few payments in case hard times hit. They will be carefull in their decisions on the purchase.

Just like everything else in our screwed up society, all the bleeding hearts want to make things easier. Artificial grades in schools, free health care, easy financing. Look where that gets us.

Make school HARD. Make owning a home tough. It builds charecter and gives the successful pride in their accomplishments.

We let the bleeding hearts turn people into pussies expecting a free lunch. It's embarrassing.
 

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Exactly - I couldn't agree more. The Ideology of Individual Responsibility. I think it not only applies to the economy but cultural issues in this country as well. Not to get on my soapbox....too late...but too many people in this country expect something for nothing, a quick buck with no hard work, no personal responsibility for their actions whether they are financial decisions, family decisions, legal decisions, etc. We need to return to a system of core values based on responsibility and family. And I blame it all on.....this is probably where I am going to lose anyone reading this......ON TV!

YES TV. For too long TV has portrayed family life as an idealistic, upper middleclass fun fest where all of lifes problems are solved in 30 mins and where we idolize and make role models out of idiots like Paris Hilton and that fat Kardisian chic. Too many people watch TV today and think "why shouldn't my life be like that" and get wrapped up in the 3 car garage, mini McMansion, private school life that they can't afford and aren't willing to work for. It all started with the Cosby Show. They see it on TV, they perceive it as "reality" and they get in over their heads with 4 credit cards at 23%, a mortgage they can't afford and a Hummer that gets 6 miles to the gallon. Put the remote down, go out and work for a living and live within your means. If you don't like your current situation, do something about it and stop thinking you are entitled to it.

If I run for president some day, I am sure this post will come back to haunt me.

:)
 

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Discussion Starter #9
Hahaha, Interesting point dumapus. Look their is alot of things that we could point at as to how we got where we are.

Over the last 6 years we have spent almost 600 billion on Iraq. Misplacing 8 billion dollars in the process and hiring Merc's at $1,300 dollars a day for 6 years (you do the math).

In 2007 we spent 20.3 billion dollars on foreign aid.

We spend Billions on grants to study bat droppings and the sex life of the african tesse fly.

We have over 700 overseas military bases.

I could go on and on... Our Government is as corrupt if not more than any third world country.

But back to the problem at hand... The bail out. My dad always used to say that "you can't get out of debt by borrowing more money". What I think this country might need is a little tuff love. Is it going to be painfull? Yep. Are good people going to get hurt? Probably. What is the other solution going to do? Kick the terd down the road to my kids. How is that fixing anything?
 

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In 1974 I bought my first brand new, off the showroom floor automobile. I went into one of the biggest banks in Dallas to apply for the loan. I filled out the papers and about twenty minutes later the loan officer asked if I would meet with the vice-president of the bank. The VP sat me down in his office and gave me one of those fatherly lectures on the responsibilties of borrowing money and owning a car. I was a young adult and married with our two incomes at the time, but the banker still wanted to stress to me how serious borrowing money was.

In 1954 my father, who owned his own home and had no major debt, went into a bank to borrow money to buy a new Chevy Corvette. The banker told him, "Son if you need to borrow money for a car like that then you don't need a car like that."

Maybe if things were still that way in this country, we wouldn't be having these kinds of problems.
 

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Discussion Starter #11
Manhattan neighborhoods, the median price for condos is about $8.6 million, in 2008. What does that tell you.
 
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