Radical bailout plan has a jawdropping price tag

[Martrae]

A few months ago the news agencies wouldn't give him the time of day. Now they're all creaming themselves to get him in an interview.

[Arlos]

Felt that was somewhat appropriate. heh.

-Arlos

[Trielelvan]

LMAO!

[brinstar]

Felt that was somewhat appropriate. heh.

-Arlos

hah i saw that too, i still read that shit every day

[Eziekial]

I'm thinking of maxing out my credit, take the cash and buy guns, ammo and gold and wait for the riots to start.

[Martrae]

Gardening supplies wouldn't hurt either.

[Eziekial]

Women garden, men hunt the caribou.

[ClakarEQ]

Washington Mutual, goodbye

[Nusk]

a friend of mine is an exec at freddie mac and she was telling me that no one in the news is talking about what she calls the 500lb gorilla in the room.

apparently freddie and fannie were FORCED to make subprime loans to minorities because of affirmative action legislation, so she is saying that it is because of regulations pushed through by the clinton admin that are causing this current problem.

[ClakarEQ]

I'm calling BS on that one. I would need more info from someone who isn't going to lose their job and their investments and isn't looking to lash out at someone, let me guess, your friend is a bit conservative?

Are you implying the 500lb gorilla is the GOV? I agree the GOV is the root of the problem but that is because the GOV let private company run amok with money they never had.

Are you saying the GOV is why folks were borrowing 30 to 1?

[Tossica]

Yeah, I also call BS. It's not the "minorities" that are the problem here it's the fact that people refinanced their houses to max value, bought houses out of their price ranges with ARM's thinking they'd refi when it was time for the ARM to reset and are now unable to because the value of their homes have dropped so much.

[Nusk]

she isnt the only one who thinks this

http://www.takimag.com/site/article/the ... e_housing/

while i do not think it is the only cause it is pretty obvious to me that political correctness in lending is pretty damn retarded

thought it would be fun to put some more wood on the fire

[Eziekial]

Wait, I though everyone on this board KNEW what caused this sub-prime crisis. You guys aren't reading Ron Paul articles that Mart posts are you?!

There is no single reason why we are in this mess. The Community Reinvestment Act of 1977 requires bank to lend to high-risk borrowers in an effort to make home-ownership among minorities (who tend to be poorer) more viable. I believe the Fed's artificially low interest rates coupled with this policy set the table for this melt-down. Too much government meddling, lack of personal responsibility and a "get rich quick" mentality of our citizens are a volatile mix. Throw in some market speculation and irrational overreaction and "BOOM!" All hell breaks loose. Like i've said before, if we are not willing to change course, the next best thing we can do is speed up the train wreak, and start on picking up the pieces.

I'm heading to a tropical paradise for the weekend with the girl. If the world ends, I'm going to go out with a bang

[leah]

so uhhhhh i really don't know much about what all this mortgage collapse stuff means for Average Joe, but . . . they're not going to take my house away from me, are they?? sorry if that's a stupid question but i guess i just don't know/understand the specifics of how this trickles down . . .

[Reynaldo]

Pay your bills and you're fine. Nothing magical about it or anything.

[Martrae]

Aside from the rising cost of everything because of the depreciation of the dollar? Not much.


http://finance.yahoo.com/loans/article/ ... ns-for-You

[ClakarEQ]

I don't disagree with what RP, Ez, or Mart have said but I do have issue with someone saying it was "clinton" that did it. It started LONG before Clinton.

However things got bad when that act was put in AND no regulations added to control it. There was an assumption that the companies in question would / could just grow slowly, or at least act ethically, that act didn't force companies to bet on ratios of 30 to 1.

[Martrae]

Just goes to show what happens when the government dictates what private companies should do. If there had been business stability in offering loans to high risk debtors then legislation would have been unnecessary because the banks would have already been doing it.

[ClakarEQ]

However you could only guess the number of homeless poor or even what middle class actually is had the '77 act not been done.

It wasn't just the act that did it, but to Ez's point of too many greedy folks that would sell their soul for a buck.

[Martrae]

Yeah, because if you don't own a home you're homeless. :rolleyes


Do you realize that if home prices hadn't risen so much because of this act, then so many people wouldn't have had to work 2-3 jobs to just afford one?

[ClakarEQ]

I didn't mean how that sounded LOL, homeless, i meant in the sense of not being able to have a home (e.g. rent), I wrote too quickly. I do think the number of poor would be much greater though, and the gap between the haves and have nots would also be much greater.

The act in of itself did not force companies to make 30 to 1 bets on money they didn't have. That was a choice the company made not to sustain itself but to maximize profits for shareholders at HUGE risks.

The problem was the act was put in and no regulations along with it to control greed because at the time I think there was a some stupid assumption that the rich in our country cared more about the people here than the paper in their wallets, THAT was a huge oversite.

Just like the STUPID assumption that money flows down, that has NEVER happened yet many (like McCain) still think the rich care about the workers MORE than they care to maximize their bank account.

[Martrae]

Just because you rent, it doesn't mean you're poor. And how many of these so-called poor people were priced out of the housing market anyway?

And I think the middle class wouldn't have diminished so fast if it wasn't for ridiculously high house prices. When you go from a society that can survive just fine on one income to one where 2 incomes is almost mandatory to afford a house, you are widening the gap between the haves and have nots.

[Tossica]

Hahaha, classic. The rich people fuck up BIG TIME and then blame the poor people. CLASSIC.

[ClakarEQ]

Mart, back in 77, i was just a wee lad, but from what I do know, I think mortgage rates something like 14%? Most loans being 30years. I think you're looking to find some scapegoat to the troubles we're in, jumping on the RP badwagon, putting on blinders, and following along.

That act was an attempt, and it worked but too good IMO, to force down interest rates, make homes more affordable, etc. It was the rich and greedy shareholders, you know the ones that are suppose to trickle cash down, that broke the system.

While I do like a lot of what RP has to say, and I do agree to a point, they guy is a radical and in some ways borderline insane with some of his suggestions and desires.

[Arlos]

Mart, Warren Buffet explained exactly what the problem was and what was going to happen in 2003. http://news.bbc.co.uk/2/hi/business/2817995.stm

It was the massive leveraging the Wall Street firms were doing (hell, Lehman Brothers was at a 35 to 1 ratio), to trade in these derivitives that were all based on a house of sand (the subprime mortgages) that got us into this mess. Yes, there were other contributing elements, but without those insane "new financial products" like the CDSs and CDO-squareds that were allowed to be created because there was no functional oversight and regulation are at the heart of the problem.

Now, if a presidential candidate REALLY wanted to impress me, they could promise to hire Buffet to run the economy, if they could get him to agree to it. However, Id oubt he ever would, why would he want the headache?

-Arlos