Government says, "All your banks are belong to US." (was Freddie and Fannie thread)
- Thread starter FoolKiller
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- 21,286
- GR-MI-USA
- YSSMAN
- YSSMAN
I know, and its terrible. Either way, House Republicans just blocked the bill and it has failed in the House.
I now do not know what will happen. The DOW did sink to nearly -800.00 on the day for a short time, but it has recovered a bit. Either way, this whole deal has been an absolute disaster.
I now do not know what will happen. The DOW did sink to nearly -800.00 on the day for a short time, but it has recovered a bit. Either way, this whole deal has been an absolute disaster.
- 24,553
- Frankfort, KY
- GTP_FoolKiller
- FoolKiller1979
Careful, I heard interviews this morning from House members that were upset they didn't get a full day to review the final draft or examine the long-term implications.
It may not be that some of them felt obliged to turn it down as bad, but to tell the Senate to screw off and let them run their end their way.
Hard to say though
- 38,917
- Application hell
- MP-Omnis
Yeah, someone on another website commented, "For all we know they're just delaying its passing to prevent riots in the streets."
Hopefully this is the end of it.
Joey D
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- Lakes of the North, MI
- GTP_Joey
- GTP Joey
Err as much as I hate to say it something needs to be done about the market collapse. The country will end up shutting down if something isn't done and I would like to have a job when I get out of college after paying tens of thousands of dollars. Do I think a government bail out is right? Probably not, but something needs to be done or you will see riots in the streets.
- 21,286
- GR-MI-USA
- YSSMAN
- YSSMAN
I think at this point we're looking at a meeting point between the re-election of a given Congressman or doing what is right for the country. Take your pick as to which one you'd like to follow, then proceed to sending your congressman a letter...
It appears as though my Congressman, Vernon Ehlers (R) of the 3rd Congressional District did vote YES earlier today. Good job Vern!
It appears as though my Congressman, Vernon Ehlers (R) of the 3rd Congressional District did vote YES earlier today. Good job Vern!
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Danoff
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I wasn't commenting on the bailout. Only the notion that the government should be concerned with a decline in stock values.
That being said, I think there are some major issues with the bailout.
Bailout Political Analysis: Sep-29 on the link below
Bailout Financial Analysis: Sep-25 on the link below
More good Financial Analysis: Sep-27 on the link below
http://www.cato.org/dailypodcast/podcast-archive.php?podcast_id=745
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Keef
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I wonder what would happen if everyone just sat back and let capitalism work. Or has that already been compromised by government regulations and whatnot? If we just let the system go I'm sure lots of companies would go out of business and all hell would break loose; it has before. But then everything will heal and new businesses will spring up and it'll all come back to normal eventually. Aaaand then a hundred years later it'll all come to a crashing halt again. Is that actually the way it works? It's happened before. Maybe it's a good idea to let it play out, or maybe in this complicated world it would ruin the country so bad it won't recover. I say let the system do what it does instead of screwing with it artificially.
- 23,800
- Philippines
Unsurprisingly, Wall Street is dropping through the floor.
I can understand Congress taking its time... such a bill isn't to be taken lightly... in my experience, every time somebody tries to rush you into signing over money, there are a few loose strings that need to be tied up to make sure they aren't trying to stick one up your behind.
The sentiment is right, though... why should the common man pay for the rich man's mistake? But the reality is, someone's got to do something or everyone is going to get the shaft, one way or the other.
Oh well... I can start farming coconuts for a living... it's a decent job.
I can understand Congress taking its time... such a bill isn't to be taken lightly... in my experience, every time somebody tries to rush you into signing over money, there are a few loose strings that need to be tied up to make sure they aren't trying to stick one up your behind.
The sentiment is right, though... why should the common man pay for the rich man's mistake? But the reality is, someone's got to do something or everyone is going to get the shaft, one way or the other.
Oh well... I can start farming coconuts for a living... it's a decent job.
- 29,185
- Glasgow
- GTP_Mars
This is what I don't get about the argument that some people are touting... on the one hand, it is the bankers/fat cats etc. who are to blame for making mistakes, on the other hand it is the individuals on main street who borrowed more than they could afford who are to blame. If the latter is correct, then why shouldn't main street be paying too? I know this is a simplistic argument, but so is the frankly ridiculous argument that George W. Bush has suddenly become a socialist...
Personally, I don't agree that borrowers are entirely (or even mostly) to blame. If a doctor prescribes medicine to you and you take it, you must have a great deal of confidence that your doctor knows what he is doing... and although I have no sympathy for speculators/gamblers who are losing their shirts over this, there is also the average man in the street whose savings (in supposedly no-risk accounts) suddenly find that their savings are indeed exposed to a huge element of risk because the people they trusted with their money have used it to trade toxic financial products that are way beyond the understanding of the initial investor (i.e. the man in the street) - and this is pretty evidently true, since most of the banking sector doesn't seem to have any clue as to just how much financial trouble they are really in...
So although I support the idea that a rescue plan ought to be as fair as possible to the taxpayer (like yesterday's nationalisation of the Bradford & Bingley here in the UK), I also think that a rescue plan is essential to protect the average taxpayer whose savings are at risk through little if any fault of their own. Of course, here in the UK, savings are effectively insured by the banks to the tune of about £35,000 per person, but I don't know if a similar thing exists in the US, hence why I'd support a bailout that specifically puts the interests of the taxpayer first, rather than no bailout at all.
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Which is fine, until you reach UK shores and note that a lot of the problem (particularly in the case of Bradford and Bingley) is self-certification. Then the analogy is going to your doctor with some joint pain and getting him to prescribe you drugs based on the supposition that you have lung cancer.
I know someone who self-certed, and I have no sympathy for them whatsoever. Especially as it now turns out that their mortgage is my problem - as my FTSE-linked savings dwindle because of them.
- 29,185
- Glasgow
- GTP_Mars
Same here - the self-cert mortgage issue is a prime example of what was wrong with the property market (and it seems the financial sector generally), which was that lenders were prepared to give ridiculous amounts of money to people with pretty much no security whatsoever.... it begs the question, who is more stupid - the person who borrowed as much as they could and who therefore didn't have anything to lose (other than a house they shouldn't rightly "own" in the first place), or the banks who are effectively using our money to finance the whole thing...
As someone who plays by the rules and who lives within their means/doesn't take risks with his money, I would (and do) feel decidely jipped that my savings could be put at risk because of the banks' pandering to those types of customer who did take the risk...
- 86,864
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- GTP_Famine
At the time, the security wasn't relevant to the banks - they owned the house and, if they had to repossess it, they could sell it for 2% per month more than for what it was originally purchased. It was win-win for them - the lender gave them more money that they gave them (up to 50% more, depending on the term) or they got an asset that was rising in value by 20% plus a year - it also got more homeowners, and more homeowners means more people with mortgages in the first place and more collateral for other loans. And this works just fine until the house market goes tits-up (which at the time just didn't seem likely - and for long-term investment, property is unbeatable).
From the borrowers' point of view, they could claim any income they want and get the house of their dreams, with only 1 in 20 being checked. And let's not forget that fraudulent self-certification is just that - fraud (or "obtaining money through deception").
So on the one hand the problem is banks lending money indescriminately, but from the other side it's people committing fraud to get it.
From the borrowers' point of view, they could claim any income they want and get the house of their dreams, with only 1 in 20 being checked. And let's not forget that fraudulent self-certification is just that - fraud (or "obtaining money through deception").
So on the one hand the problem is banks lending money indescriminately, but from the other side it's people committing fraud to get it.
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Apparently it's the buy-to-let market that's caused a lot of the initial problems. People with enough money for a deposit (you generally need a much bigger deposit for this kind of mortgage) have seen others making a tidy profit from buying a house specifically to rent out and wanted a piece of the action. The rental market is now heavily over saturated and landlords are now defaulting in huge numbers. There are currently double the amount of buy-to-let mortgages in arrears then traditional mortgages. If house values on average drop by another 20%, almost half buy-to-lets will be in negative equity.
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- FoolKiller1979
Funny, on the news this morning (Good Morning America, I believe it was) you had politicians acting like the Great Depression was just around eth corner. But then when they were actually interviewing people on Wall Street they compared it to 1987. I wonder who is correct, the guys playing politics or the guys who do thsi for a living? I mean, the eighties weren't all happy days, but it was far from The Great Depression.
I suggest you quit listening to the politicians.
Wait, I don't get it. I have a student loan and no problems. I also have an auto loan.
Danoff
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Main street is paying already by losing hundreds of thousands in house value. To give away 700 billion to keep the other side from paying as well is a little unbalanced.
I can't imagine relying on the bank to tell you how much house you can afford or what kind of loan you should buy. That's like walking into a BMW dealership and asking them to tell you how much car you can afford and how much you should pay for it. Horrible, horrible idea. I don't see the doctor analogy at all.
Savings accounts with any reputable bank in the US are insured up to $100,000 by America's favorite insurance company - the federal government.
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- Mark T33
You're not wrong there. Many of my landlords are requesting rent increases way above the market value as there fixed rates of come to end. The only problem is that our lettings register has trebled over the last three months due to nothing being sold (we used to have about 20 properties to let any one time now we are running on about 60). This in turn has caused the rental values to drop slightly meaning that the hard pressed landlords will need to keep there rent the same or reduce to be competitive.
Although, at the same time the demand for rental property is increasing significantly as no one is able to get a mortgage without a large deposit.
The next p
- 21,286
- GR-MI-USA
- YSSMAN
- YSSMAN
One of the GOP Congressman from Connecticut was on MSNBC this morning suggesting that if we cannot address the "bailout," we need to get on to increasing the FDIC amounts sooner than later. I've heard Democrats suggest a doubling to $200K, the GOP Congressman suggested $300K.
RE: Loans and Debt
I think the issue here is that you're going to want to have cash on hand to be able to pay for things easily, not having too much debt (with interest that will likely increase) to hold you down. With the credit markets freezing up, I'm a bit concerned about how much will be able to float around in the future... But nevertheless, I know I'm going to be shifting into "pay down" mode with all of my debts.
