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A home without a wall, |
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| The Alley |
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Main Street or Wall Street? |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
Wall street and in particular the American banking sector looks, at least from my somewhat distant view from across the pond, to be in terminal disarray. Companies, many of them previously held up as shining examples of the best financial system in the world, seem to be going to the wall faster than a bricklayer on a bonus. In an effort to avert a total meltdown the government is proposing that the real bricklayers, shopkeepers and candlestick makers - Joe public, the American taxpayers - stump up $700 billion to bail them out. Do you think that’s a good idea? If it does go ahead what safeguards do you think need to be put in place? I’ll get the ball rolling. I think it’s a bad idea, that there’s a real possibility that when given the bailout those companies that managed to get themselves into this pickle are highly likely to resume the pickling process and end up back in the same position at some point in the future. Apart from that there’s an obvious conflict of interest involved in the government having a financial say in the success of the banking sector’s bottom line. How tenable is it to have a government, reliant on the revenue controlled by interest rates, being at the same time the same people that set the interest rates? On a cold wet Monday morning when the obvious fiscal policy is to reduce interest rates do you think it’s right that the deciding factor against such a reduction may be how that’ll affect the governments $700 billion investment? If it does go ahead, and that’s highly likely, what safeguards should be put into place? In my view I’d be pushing for one clause and one clause only. If a company decides to avail themselves of the offered bailout the board of that company have to take a leaf out of the Japanese code of honour and fall on their swords. I don’t mean that literally of course, the board members can just step down to be replaced by a government vetted board. That one caveat will ensure that the government has clear oversight of how the companies use the money, it’ll ensure that the numbwits that got the company into the state it is get their just reward - and I mean the boot rather than a golden handshake. It’ll also ensure that companies don’t simply dip into the bailout pot just because it’s there and take the opportunity to offload all their toxic investments without any painful consequences to consider. What do you think. |
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SEA 
Moderator
Member Seraphic
since 2000-01-18
Posts 22676with you |
I think the government should stay out of it. I don't want some greedy politician or otherwise government affiliated person with an agenda in an already corrupt company(ies). They knew the loans were risky, so did the people getting those loans. They knew it was interst only and that the rate would go up, that is what an ARM loan is. They knew that when they signed their names and they did not care, they only saw the big house and the small payment. It's all crap as far as I see. I say make the people pay their loans and if they can't, that sucks. They should not have a house they can not afford. Those places that did those loans have mostly closed. There are next to none left. Almost every single place is requireing FHA or their direct endorsement from an underwriter. It's so they can do the government loans. those risky loans are gone. For the most part, I'm sure folks can find shady deals if they really look. But should the government bail out these companies? NOPE. I think the people should be held accountable for the bad deals they made, customers and lenders alike. If your company closes, then they should not have been so quick to do bad deals and give loans to people who clearly could not afford them. If the government takes over these companies we are heading for a socialist society. You don't get something for nothing people.... But? That's just my thoughts.  |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
Do you think that’s a prevalent view among Americans Sea? I have to admit I get that impression, I read an article that suggested that representative’s phones were ringing off the hook with advocates in favour of the bailout being outnumbered by a reported 100 - 1. The early signs seem to be that the British government is trying to avoid going down that path, preferring to deal with each company failure as and when they happen instead of putting a £50 billion bailout in place. I keep coming back to the often touted mantra when times are good “Market forces set the price”, does it make sense to artificially manipulate the market when times look bleak instead of allowing it to find it’s own level? |
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SEA
Moderator
Member Seraphic
since 2000-01-18
Posts 22676with you |
I think it was around 70% that want the bailout. Not everyone does. I just don't think this is a good idea. It's not going to fix the problem. The banks just need to clean house and start fresh with higher standards. Greed is a big monster and I don't know how else to make that go away other than chopping heads. |
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rwood Member Elite
since 2000-02-29
Posts 3793Tennessee |
I'm not sure it matters what we think when many who are in control of such a bailout may also be deeply invested in the greedy turned needy. Each and every one of those companies pay professionals to produce projections of losses. The bottom lines are tabled, quarterly, and poured over and over and over by other professionals, suits and company investors, and these figures are presented to the board, and the books are audited and their figures are produced to the board. Any investor/auditor could/can walk into a finance office and ask for a printout of every penny on the books, both profitable and delinquent, since most banking and finance companies also have intricate computer finance systems which produce any and all figures with the press of a button. AND each financial institution, by law, has a reserve for losses in place, prior to the grand opening, prior to the first loan ever made, and it is fed by every loan payment made, directly out of profit, and then it fits neatly into the fund that isn't taxable, isn't that nice? And then when there are losses, those are neatly deducted, per IRS allowance. If such advantages for the banking industry doesn't help them stay afloat, then the officers are simply not qualified. When the percent of delinquencies becomes more than the allowable percentage set in place than that of the reserve for losses, it doesn't take a genius to figure out how belly up the company is. It's simple math. If your office is only allowed 2% delinquency a month and your prestomatic-uber-expensive-financial-program has just printed out a bottom line of 4% with $600,000 in delinquencies, well, guess what. It ain't damn time to go play golf. I guaran-tee you, a lot more sweat was shed on a betting golf shot or a company bar tab, than over the bottom lines. I say No. No bail. They didn't even have to do the damn math. It's done for them. There are too many people involved, too many state and fed audits to pass, too many pieces of investigative information, too many legal forms, too many policies, too many inspections, and too many signatures required, for the company and the signing party to NOT know the risks involved with each and every penny or piece of property they signed on the contractual line for. Though if I had to pick a bail term? I say give the banks a balloon note of 5 years at 2% interest then roll them at 20% interest on the balance at term. If they fail to meet the balance? Liquidate them. Let the tables be turned. Bush can take the loan out of the millions of dollars of taxes the IRS has sitting there, from stolen identities and illegal aliens who pay taxes but have never claimed them. |
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serenity blaze Member Empyrean
since 2000-02-02
Posts 27738 |
I think I don't really understand everything enough to say what I think I think. Is that wrong? It seems to me that it is people like me, fussing over the "trivialities" of check-to-check living that are getting duped, and because we are the "machine" we don't have the luxury of deeper thought. We are too damned tired. Is there really a "bad guy" who is counting on that? Was paying off the (our) mortgage a MISTAKE when having a mortgage in a flood-prone area guarantees affordable insurance? Is it all a lie? How afraid should we be?  What about retirement? Do we trust that? From a government that left us high and dry after a flood? Do we really trust the investments of a proven corrupt government? I'm so confused. Somebody talk itty bitty plain words to me? I am genuinely frightened, and I know I'm not alone. |
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Balladeer
Administrator
Member Empyrean
since 1999-06-05
Posts 25505Ft. Lauderdale, Fl USA |
Well, you ask a good question, grinch, and I wish I had answers, too. How do most Americans feel about it? My guess would be that most are against it, who feel that the companies who engaged in shoddy loan-giving and the dumb donkeys who took loans that they knew were too good to be true should be the ones to pay for their actions. How do I feel about it? Same way. People who have done things the right way, took responsible loans, make their payments every month should not be punished along with the donkeys. My blood also boils over the millions the CEO's are walking away with from these failed companies. BUT....I also think that one has to look at the ramifications of such actions. I'm not smart enough to do that, I confess. Would it be cutting off the nose to spite the face? Would it be like cutting out a cancerous spot without taking into consideration how it would affect the rest of the body? THAT is what people a lot smarter than I have to decide. I'd like to be screaming "Burn the witches!", too, but I wouldn't want the flames from the bonfire to burn down my house or the town. Hoping for the best and prepared for the worst.... Me |
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Local Rebel Member Ascendant
since 1999-12-21
Posts 5767Southern Abstentia |
For the largest financial crisis to hit the United States since the Great Depression – I'll come out of retirement. Blazey – in as plain English as I can muster; A few decades back – the political climate in this country turned from the reforms that were put in place after the Great Depression to favor less regulation and towards 'trickle down' economics. This was preceded by the separation of the value of the Dollar from the Gold Standard a few years earlier. The effect this had on the value of everything was that nothing has any value – other than what you can get for it on the open market. Stock values were no longer traded on the actual value that companies were building – but rather – traded in a giant ponzi-scheme. This being the case – most companies that were traded publicly decided that it wasn't really in the interest of the stockholders to actually make things that made profit anymore – but that it was better to make decisions based on what would drive up the market capitalization – or the price that people were willing to pay for their stock. When each scheme would hit a bubble and burst – the companies that were the ponzi-scheme masters – namely – the insurance companies – needed newer and better places to make investments. Enter then, with the collapse of the Dot.com bubble – the real-estate bubble and the sub-prime mortgage. Stripping away nearly all of the regulations that were designed to keep banks from collapsing (also known as check-kiting) a new system of loaning money to people who couldn't pay it back at loan-shark interest rates was developed – with the stated intention that real-value would increase because along with an increasing population there would be an increase in the actual rate of real-estate development – so that Mike's swampland in Florida he's been trying to sell me for the last decade would finally, actually be worth something. Now, the banks and mortgage lenders didn't want to actually have to wait for these risky loans to be repaid in order to have more money to lend out – so – they took all of the paper these loans were written upon – and sold them to people who were completely unregulated – who then bundled them together with some less risky mortgage and loan paper they had purchased and put them up for resale on Wall Street. So, like kiting checks – this money was sold over, and over, and over, and over, and over, and people were skimming from it every time that it sold. What's even better is that with the invention of the 401k retirement fund, and money-market funds – when ordinary people who had taken out those mortgages needed a place to save for retirement – there became no better place than the inflating balloon of Wall Street – so that – in effect – they were re-investing, at a greatly inflated price, in their own mortgage. Meanwhile – the companies they worked for that made those 401k's possible – kept sending their jobs overseas and laying them off, and laying them off, and laying them off, and laying them off – because every time a company announced to Wall Street that it was downsizing it's stock PRICE would shoot up. So, being laid off from work – the people who were supposed to be repaying those mortgages started defaulting on them. Especially when the interest rates on them shot up to the point when they were no longer affordable. But, not to worry – they were told – when borrowing – when the time came all they were going to have to do was re-finance those adjustable rate mortgages with a lower fixed rate mortgage. Now as the dominoes tumble through the financial sector – they've gone all the way up to the top of the food chain – and our entire financial system is wrecked. If we don't print some more funny money to keep the monopoly game going – people will not be able to get more financing for anything – which is the bottom-up fuel to an economy where the entire populace has a net-negative value. There will be wailing and gnashing of teeth. No new loans means no new sales means more layoffs, and more layoffs, and more defaulting, and so on and so on. Such is the nature of voodoo economics. Also known as – there are no capitalists in an economic crisis. |
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Huan Yi Member Ascendant
since 2004-10-12
Posts 6688Waukegan |
. I don’t like the idea, yet I understand the impacts if nothing is done to stem a panic which is how I view this, (Bill Clinton noted that over 50% of Americans are invested in Wall Street). The Government is not going to give 700 billion for nothing and in fact like many investors with the money and patience may and probably will, (depending on the valuation of the “toxic” assets), come out very well in the end.. Yet I also think “marked to market” needs to be looked at. Further I consider “naked short selling” to be rumor mongering, ( I am suspicious of how the financial institutions seem to come under fire in sequence like a series of targets which, then one at a time, starts everyone running out their doors). And of course there is the CRA and similar laws which need some hard review. I question the wisdom of making financial institutions put their and the well being of their investors, (which include depositors), at risk for the political sake of social policy. . |
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serenity blaze Member Empyrean
since 2000-02-02
Posts 27738 |
Thank you Reb. I have missed you sooooo much and hope you're well.  And I'm not smart enough for all of this stuff...and I quit trying to understand everything. But I sleep at night now. Every night, too! Love you sweets! Yer a doll.  |
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Denise
Moderator
Member Seraphic
since 1999-08-22
Posts 22648 |
Nice to see you again Reb. You have been missed. I was just thinking about you the other day. I heard that Fortis, located somewhere in Europe, has gone under, or is just about too. They are the company that holds my life insurance policy. They bought it from another company a few years back. Does this mean that I no longer have life insurance, or will some other company buy them out and honor the contract. I've been paying premiums since the early 1990's. |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
From the FINANCIAL TIMES - John Kay Editorial " "Fannie Mae and Freddie Mac were probably the world's most heavily supervised financial institutions. They already had this massive oversight agency examining what they do." That's what makes this even more outrageous. "They were subject to a specialist agency. It's called the Office of Federal Housing Enterprise Oversight. The office employed 236 people at the time of its last annual report. The Office of Federal Housing Enterprise Oversight did not fail because it was understaffed or not well informed about Fannie Mae's activities, but because it lacked authority. The entire staff earned less in aggregate than Franklin Raines, the CEO who masterminded the expansion." So you had an oversight agency that had no authority. " MORE government oversight hasn't worked in the past, and didn't work here. It is interesting to note, by the way, that good ol' hated Bush wanted to replace the innefective committee but Barney Frank said :"They're not facing any kind of financial crisis." 2003 The Democrats unilaterally nixed the idea. There is surely enough blame to go around, but the time for oversight was THEN, not now. 236 people were employed simply to watch Fannie and Freddie, and they lacked any teeth to do anything more than advise. How does that happen? This was a Clinton appointed committee, not Bush. The Freddie Mac CEO was Franklin Raines, a close Obama advisor and insider, who ran the company into the ground in the first place. He walked away with $100,000,000 in bonus monies after he was kicked out as CEO. He then when to work for Obama. Glass Houses and stones, Obama, glass houses and stones. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
quote: OK got that - history says that more oversight doesn’t work. quote: Presumably with another with more oversight which, according to your first statement wouldn’t have worked either. quote: Which would have made no difference whatsoever according to your first statement. quote: Or maybe not.. http://voices.washingtonpost.com/the-trail/2008/09/19/_the_ad_obama_has.html |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
The author of the Washington Post says the source of the article is no other than Raines himself: Who was the source for Ms. Huslin's assertion that the Obama campaign had solicited Mr. Raines' advice? Mr. Raines himself. "I asked Huslin to provide the exact circumstances of that passage," wrote Michael Dobbs, who writes the Post's Fact Checker blog. "She said she was chatting with Raines during the photo shoot, and asked 'if he was engaged at all with the Democrats' quest for the White House. He said that he had gotten a couple of calls from the Obama campaign. I asked him about what, and he said, Oh, general housing, economy issues.'" While oversight committees are a necessary evil, they are often prone to cronyism. It's obvious that this current committee was beholden to Clinton, and either didn't yell loud enough or have enough clout or didn't try hard enough to get the politicians attention. Unfortunately, the only solution to getting rid of a corrupt or ineffective committee is to get rid of them entirely and replace them in toto. Had the Bush proposal gone through, BOTH parties would have had a say in the selection process. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
Threadbear, The Washington post said that Huslin said that Raines said.. Sounds like a whole bunch of hearsay if you ask me, especially when Raines is telling anyone who’ll listen that it’s not what he actually said. What irritates a lot of people though is the non-sequitur logic that starts with a couple of calls from campaign aides about “general housing and economy issues” and reaches the conclusion that Raines was “a close Obama advisor and insider”. quote: Hang on, weren’t you just arguing that they never worked, something about history and all that. Why are they necessary if they don’t work? |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
"Despite his short tenure on the national stage, Obama is the second-leading recipient of campaign contributions from the political action committees and employees of Fannie Mae and sister government-sponsored enterprise Freddie Mac since 1989 -- $165,400 in all -- according to the Center for Responsive Politics, which tracks the financing of congressional and presidential campaigns." CQ POLITICS 9/27 Same article: "Obama has an even stronger link to the former leadership of Fannie Mae: He tapped another former Fannie CEO, Jim Johnson, to head his vice presidential selection committee. But Johnson was forced aside when it was revealed that he had been the beneficiary of a low-interest loan from Countrywide Financial Corp." As far as credibility is concerned, Raines, is an admitted liar and conman to the tune of millions. Do you really think he didn't lie to protect Obama, after stating he had conversations with Obama about housing and economy previously? On the believability scale, I believe it would be 95% probably he DID say it, and 5% improbable that the conversations never existed. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
Threadbear, Now I’m just confused. Let me try to get this straight - Raines is a compulsive liar but we should believe what the Washington Post reported that he allegedly said to Huslin. Sorry if I’m stating the bleeding obvious but why the heck should we believe anything he allegedly said to Huslin if the guy‘s a liar? It may indeed be 95% probable that he said it but by the same logic it’s 95% probable that he was lying through his teeth when he did. |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
I admit, sir, you have a point there: which is the truth and the lie? It's been my observation that liars tell the truth initially, unless accused of something at the time, and when it goes sour, THEN lie. It's called deniability. Seldom does a liar tell a lie without a reason. In the Washington Post case, it was just an innocent question about his connection to Obama long before all this fallout began, so he wouldn't have a reason to cover his butt then, but would have EVERY reason to do it now. Maybe I'm just distrusting of CEO's and [politicians in general, but I have a tendency to go with their 'first statement not under duress' before the endless denail contradictions occur. This is said from my journalistic point of view. This is one of many tools that journalists use to determine whether further questioning is needed: did the questionee have a reason to coverup initially? If not, then the lie occured later. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
Threadbear, I think the phrase you’re looking for is “gut feeling”, that’s fine there’s nothing wrong with taking a punt on a possibility, I do it all the time, we all do. Though I’m not sure it’s a good thing when it comes to journalism, I tend towards wanting the facts from journalists’ so that I can draw my own conclusions. Reading someone else’s conclusions takes the fun out of things. Let’s say I go with your gut feeling and that Raines did actually say that he’d had contact with a couple of Obama’s campaign aides to talk about “general housing and economy issues”. How does that make him a close Obama advisor and insider? This is just a gut feeling of course but could the denial by Raines actually be a refutation that he was anything even approaching an advisor? In which case he told the truth in the first instance and the truth in the second. Maybe he’s just a bad liar. |
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Not A Poet Member Elite
since 1999-11-03
Posts 3885Oklahoma, USA |
A form of circle-speak? A paradox: This statement is not true. But if not true then false it has to be And yet, if false, then true it would be too, A paradox, this statement is not true, But false or true, it cannot be the two. With clarity, I think that all should see The paradox, this statement is not true, For if not true then false it cannot be. quote: Well, good luck there, my friend. |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
Hey, Grinch. You asked earlier: why did I recommend a committee when they don't obviously work? A committee with teeth is what i recommend. When the gov't took over Freddie/Fannie, the oversight group was formed with the intention of monitoring loans, and not punishing any violators. Any new legislation must have punitive measures; the FDIC chairman, much to his chagrin, MUST spell out loud and proud major violations in the future. Any new committee MUST be bi-partisan in nature, and possibly have two CEO heads instead of one as a check and balance system. All this wouldn't be necessary if people just did their jobs in the first place, but in Washington, you either are 'part of the team' (meaning the team in power) or you're out of the loop. For CEO's, this is doom and gloom since their stockholders and board members are high ranking officials and peers for the largest companies. I really don't think the public as a whole has any idea of how head-nod deals take place in Washington, and I'm not talking about politicans necessarily. Each of these lobbyists, CEO's and politicians involved in burying this story have one of two interests: power or money. It's a rare person in Washington who puts the public's interest first, and their personal gain second. That, my friend, is the prime reason Washington is so frigged up. So...if we want any real change, we must make sure an auditing committee has no direct ties to the government (such as the GAO), and also has some punitive powers. I walk the walk: I've been debt free for 10 years: i pay cash for my cars, don't own credit cards (except for secured ones) and don't owe one dollar in arrears to anyone except my monthly utilities. When I tell people this, 100% of the respondees say: Gee, I wish I was that lucky. Luck had nothing to do with it. It was personal choice, and nothing more. The thing that scares me is that the respondees ALL owe big bucks. How come no-one is debt free anymore or close to it? Ok, i get that everyone has a house payment, but everything else should be budgeted. I'm just sayin.... |
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Balladeer
Administrator
Member Empyrean
since 1999-06-05
Posts 25505Ft. Lauderdale, Fl USA |
What you're "just sayin'", sir, makes a lot of sense to me. |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
quote: Actually I asked earlier why you recommended a committee when YOU believed they didn’t work. I think some committees work quite well. |
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Huan Yi Member Ascendant
since 2004-10-12
Posts 6688Waukegan |
. My question: Why did 95 Democrats including Jesse Jackson Junior vote against the bill? . |
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Grinch Member Elite
since 2005-12-31
Posts 2929Whoville |
Huan, Probably for similar reasons that prompted 165 Republicans to vote against it. http://www.cnn.com/2008/POLITICS/09/30/bailout.reax/ |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
That is easily answered: across the board Congressmen have been bombarded with emails not wanting the 'bail-out' to occur. The rate of 'not wanting' was 85%. Some congressmen actually voted the way their constituents wanted (wow, there's a novel thought.) 2ndly, Democrats knew that Bush sponsored this bail-out, and some of them will NEVER vote with Bush, no matter what the circumstances. Also, the Freshmen Democrats were given a pass by Pelosi as intended votes since they are up for 2nd term re-elections, which is the critical dropping off point for any politician wanting to stay in office. In corporate heavy areas, many of the Dem's caved into political pressure of the rich and famous. Lastly, as the votes were cast, it was obvious that the vote wasn't going to pass. The late voters jumped off the bandwagon until further security measures were added to it, which was what everyone wanted anyway. Essentially, these voters jumped off the same reason the Repubs did: the bill still needs some work and doesn't need to be a knee-jerk reaction. Funny how these things work: had they passed the bill, the congressmen wouldn't have seen the huge increase today in the stock market and Dow Jones. While most economists (weathermen in suits) surmised that today would be another bloody Tuesday, but lo and behold, they were ALL wrong . . .again. Once the bill failed, the stock market was highly expected to bang further down. But it didn't. And you can thank a Jewish holiday for keeping the congressmen from rushing a bill no-one has had complete time to rework into passage. |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
It's not popular. Nobody likes to vote against something popular. Do you? It appears that unless we work out a bailout of the credit market, however, business is in trouble. I mean mid-sized bread and butter business, not large Fannie Mac and Freddie Mae (a small joke here) type businesses. The same market that has been ravaged by the housing credit problems has apparently savaged the short-term borrowing power of ordinary businesses, who need short-term business credit to survive. They borrow to be able to afford purchase of inventory of stock from manufacturers. No stock, nothing on the shelves to sell at anything approaching reasonable prices. Prices go way way way up very quickly. Businesses also on occasion borrow to pay workers because they do not always get paid on time by people who owe their companies money. Workers don't get paid on time, people starve. The bail-out doesn't go down any better than a dose of castor oil. Refusing the bailout because it doesn't taste good is like a kid not taking his anti-biotic because it doesn't taste good. He simply doesn't understand the pneumonia is more dangerous, and he's sure that the bad taste is more of a threat than the cough. It's at times like this you've got to wonder where the adults have gone. The kids seem pretty willing to run things from spite instead of reason. I find myself in agreement with Balladeer. He seems to have the good of the country in mind. |
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rwood Member Elite
since 2000-02-29
Posts 3793Tennessee |
quote: Things are not what they seem for all, Bob. This adult has bailed out quite a few from their contractual and very legal rip-offs, from the honestly ripped to the honestly inept in managing their monies. No spite, despite the fact that most can become financially self-educated with the help of the internet and/or the public library. A simple calculator is very useful in managing debt. If I received a nickel for every adult who has never balanced their checkbook and a dime for every signed contract that was not fully read or understood? I could retire, tomorrow. Those that operated and fatted themselves upon those that never bother to do the above already have a comfortable means. We should try to help each other, from the beginnings of beginning an independent life, to share what we know is sound, and to seek the right answers for a solid means. Not from a capitalist infomercial standpoint, (“Not that there’s anything wrong with that,” Seinfeld), but from the standpoint of human investment and management. It’s not like we all know what will happen to us when we’re too old to work anymore. Our kids will take care of us? I hate to say it, but most adults are too overwhelmed and confused about that measure for their kids to even begin to fathom it. That’s where most adults are at right now. “If I can’t work anymore, my life is just over.” To have fat cats “legally” manipulating that life for a living, is just scary and wrong as hell. The American people already pay out of their pockets a portion of what they make to adults who are assigned to the task of auditing, monitoring, regulating, examining, insuring, ensuring, teaching, managing, and representing, all the way to the top of the money chain. Yes, people have to responsibly borrow. Yes, lenders have to responsibly lend. The core reason for this national bailout is irresponsibility, and possibly even media induced panic around the mortgage sectors, and possibly opening up lending for those who really could not afford it to be afforded them! Currently, the banking system is clogged for small businesses which cannot operate in the throes of big business snafus, nor can the student-loan-student or average person who needs a small loan for a small crisis/immediate needs. The money isn’t there because investors have pulled out/frozen lending; collections are out the roof. And those that paid on time? They get penalized and are pending a day to day decision, based not upon their credit but upon the abuse of power and the actual lack of power to repay the monster others bought into. The big dippers have dipped into our lives, and I hate what is happening to people who didn’t have a thing to do with any of the decisions made by them. Use the flexibility of the financial market to get things back on track, the FDIC, all the funds already present. Not more government, unless they want to donate a portion of their salaries for not doing the job assigned to them. Independence… |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
Dear rwood, You know, rw, I think you have lots of reasons to be resentful. We all do, probably. None of us are running around with lots of cash to spare. You and T-bear have done everything right, and I haven't had the money to do anything wrong. I like to think I would have done well anyway, like you folks, but I've been pretty much personally untested. My wife, bless her, has made decent money decisions so the damage has been confined so far. I'm as nervous as anybody else. What happens, though, if we do nothing to deal with this situation, rw? Will you feel better? Is it seriously your position that the overpaid CEO folks will be the only people who will be punished? I have trouble believing that you think that doing nothing will stick it to those CEO people and will leave your friends and neighbors unpunished and undamaged, and that your own financial position will be miraculously untouched. If this is in fact your position, please take time to explain it to me; it's well beyond my reason to understand. It's not that I didn't see the solution you propose imbedded in your comments: quote: I did see this. I also believe that your language here is so abstract as to be functionally meaningless. It's on the level of saying, "We'll use the power of gravity to harness the power of the falling water in the world and solve the power problems." That is, unless you can say how exactly you're going to make this work, it's probably implausible. 1) What flexibility in which financial market to be used in which way within which extraordinarily limited time frame will keep the short term credit market functional and allow businesses affordable credit to purchase stock and pay their employees before their creditors foreclose upon them. 2) The FDIC, which covers bank deposits up to 100,000 dollars in certain kinds of banks and certain other limited sorts of investments is a very limited fund. Without money from a bail-out bill, why do you believe there will be enough to cover the potential losses to depositors, including perhaps yourself. As all insurance schemes, FDIC is based on the notion that everything does not go wrong at once. 3) What other funds, specifically, are you talking about that are already present? 4) Many regulations, including restrictions on the interest rates allowed by credit card companies and the relief available to consumers by bankruptcy laws have been done away with in the waves of anti-regulation mania that have been sweeping the country with the conservative turn the country has taken since the sixties. Now that we can see where the lack of those protections has placed us, the same spirit of non-regulation suggests that we do nothing to deal with the catastrophe that looms ahead. I sympathize with your upset, rw; I feel it myself. I think we need to invest in our country, demand clear returns on the investments we make. Treat the bail-out as an investment and assert the right to apply some sane regulation so this stuff doesn't happen again. It's what you'd do if you were investing in a company that was in some trouble and you were bailing that company out. Somehow you've been convinced that you should simply toss money at the problem and let the same old thieves keep running things in the same old thieving ways. And that, rw, would be a terrible investment. If we went in trying to exert some control and to get some repayment out in the long run, that I think would be something very different indeed. What do you think about that? A modest proposal for you, rwood? Yours, Bob Kaven |
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Ron
Administrator
Member Rara Avis
since 1999-05-19
Posts 8669Michigan, US |
quote: Bob, you almost make it sound as if the only real criteria for running a business is a good credit rating. If you can borrow the money to buy inventory, and borrow more money to pay employees, the door's pretty much open to anyone willing and able to go into debt. That's not assuming risk, it's passing it on for someone else to assume. Capitalism, I think, should be based on capital, not on credit. Borrowing to ease a temporary cash flow problem should be a measure of last resort. If a business owner can't pay their bills, they probably should go to work for someone who can. Sadly, the way it should be isn't the way it is. And I'm not so naïve as to think it can change overnight. Frankly, however, a few people getting their financial chops busted just might be a good start. |
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Sunshine
Administrator
Member Empyrean
since 1999-06-25
Posts 63354Listening to every heart |
Ron, I couldn't agree more - there are way too many crooked paths on some crooked roads that the financial crooks used to confuse and confound way too innocent, and some not-so-innocent folks. |
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Huan Yi Member Ascendant
since 2004-10-12
Posts 6688Waukegan |
. "Yes, lenders have to responsibly lend." Then void CRA and similar laws which afford interest groups the power to coerce otherwise. . |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
In a do or die vote, Senators inserted at the last minute $150,000,000,000 in earmarks/pork to the bill in order to sway fence sitters and get their pet projects through. Here are some of them: Senators (D)Wyden & (R)Smith Oregon for wooden arrow production for practice for children. Film & TV production - $10 mill small and med film producers (D) Schiff & (D) Sherman – California EXXON Valdez people affected by settlement – spread out settlement over 3 years Don Young – (D) Alaska Mental Health Ramstad – (R) Minnesota controversial rules that say mental health should be same rqmts as normal health + Puerto Rican & virgin islands – rum production auto racing tracks – NASCAR track owners American Samoa Wool trust fund I have graphics of the politicans leopard spots and I can tell you unequivocally, that none of these politicians changed theirs recently. |
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oceanvu2 Senior Member
since 2007-02-24
Posts 1066Santa Monica, California, USA |
Hi all -- Well, OK, the first "immediate crisis week" passed and the market went up an down. The second crisis week, this being Thursday, I think, is about to pass and the market goes up and down. I agree that there seem to be problems with enormous implications for many citizens, but maybe we can "can" the immediate crisis rhetoric in favor of a less time intense attempt solution. None of this happened overnight. It won't get solved overnight. Placing blame and gut level solutions seem less relevant than a systematic approach, requiring thought, as to how the economy might be better managed. Free market economics as subject to abuse, and government oversight seems less than competent as currently structured. One difficulty, politically, seems to be that the next Presidency of whatever stripe is going to inherit these problems, and the problems will be ascribed to that Presidency. Not particularly fair, but probably the way it will go. I'm not an advocate of laissez-faire, but I am an an advocate of lets think about it a little more. I'm not sure I can agree with Ron completely. Their has to be an initial source of capitalization available fopr businesses -- loans -- unless one is blesed with John's fifty million to spend/invest/or squander at will per choice. At the same lending and borrowing, from the mini (these days) capitalization of small business through the SBA to the maxi-capitalization of, say General Motors by wing and prayer, needs to be based on carefully considered potential of returns. This leads me to a couple of thoughts, to which I have no answer: Is it possible to be socially liberal and fiscally conservative at the same time? Is it time to retrench and cut back on programs which further political aims overseas, and, uh, take care of ourselves? Is it time to let free market economics take care of themselves, whatever the failure or success, or does the government need to become more "socialistic" in the sense of managing basic industries such as banking and major industries. Is the current "crisis" being trumpeted a bit too loudly in the Chicken Little sense, or is the sky really falling, in which case not much can be done with money to prop it up" I don't have answers. I do have great empathy for the individuals whose realistic expectations of reasonable return and reasonable security are being affected by some unconscionable deeds and outright fraud. Having nothing, I have nothing at stake. Watching so many other citizen's lives being affected adversely is still personally painful. But maybe there is something to the adage "Act in haste, repent at leisure." Jimbeaux |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
Dear Ron, When the deregulation of credit card interest came up in congress, the people why are crying out now about greedy companies and CEOs were mostly on the other side. We should not stand in the way of business with cruel and unnecessary regulation. That was pretty much the Republican position. That was pretty much the Libertarian position. I did not agree with it at the time because, while I do believe in Capitalism, I've also seen what happens when Capitalism goes unregulated. I wish I had a more clear and concrete set of proposals to offer, a set that is as clear as the Libertarian position, whose clarity is exceptional. But I don't. I know enough to know that any single position is bound to be wrong a significant amount of the time, and that we need to use the best intellect we have guided by the best knowledge of history and economics we can come up with to have any hope of making something like a civilized transit through our own segment of history. Some systems, like heartbeat or breathing, are probably best not messed with most of the time, since our attempts at regulation aren't as good as the native systems that govern them outside of emergency situations. Other systems may be better dealt with by a constant light touch on the tiller, such as learning how to manage seamanship in a sailboat; you don't want your boat to sail itself all the time, once you've accomplished a basic level of competence. You'd most likely get yourself killed. Oftentimes we simply spend our time fighting among ourselves about what kind of system it is. If it's a planetary ecology or an economy, I'm generally in favor of saying that our very presence affects it, and we need to take some responsibility for the effect we have and for making decisions about what the effects are that we will take responsibility for creating. Lots of people disagree with me. Having decided that not regulating the economy was the way to go on the way into this mess, especially on the credit card side of things, and on the increased difficulty in declaring personal bankruptcy side of things, I am somewhat surprised to see the reaction people have today. The short term effects of what the de-regulators did was to encourage a boom. For many years right wing folks have been telling those of us on the left that we were idiots for telling the world that the consequences of such a policy is generally a bust. I have had that discussion myself in these pages with some of the more conservative of my friends here. They have laughed long and loud at my silliness in assuming that busts follow deregulation after an initial boom cycle. The solution that many of them offer—though I will say with great pride that my friend Balladeer has been a stand up guy, and that while he hasn't loved the notion of a bailout, he is patriot enough to know that something needs to be done to manage the situation—is to do nothing. I submit nothing is less than a great option. I believe we do have time to think. I believe that even if we don't think we have it, it would be smart to make it and take it. We can get a copy of the bail-out bill. We can plough through it. We can look at it. We can think about it and we can talk about it. We do not have to repeat the mistake of Iraq. We should not repeat the mistake of Iraq. We should not repeat the mistake of The Patriot Act and sign off on a bill we can't read or understand. It would be stupid of us to do so even if this were the first time it had happened to us in the past ten years. It would be criminal of us since it's been less than ten years and it's been more than once. And Ron, you're right that business isn't done the way you think it should be done. I'm not sure, though, that cash and carry is the way that people do business most places anymore. To arrange things otherwise would probably require some interesting regulations; and—as I understand you are a healthy streak of the Libertarian in you—I'd find myself tickled pink to see your suggestions for what such regulations might be. I, on the other hand, have nothing against such regulations in principle, if the regulations serve some useful purpose and may be modified as conditions warrant. I hope I haven't been too scattered in my response to you today. I hope all is well with you. My admiration and appreciation—Bob Kaven |
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Ron
Administrator
Member Rara Avis
since 1999-05-19
Posts 8669Michigan, US |
quote: I didn't have fifty million dollars, Jim. I also never borrowed money to start a business. And, among the people I called friend and acquaintance, I certainly wasn't unique. There was a pop culture movement in the Seventies that tried to convince people that the key to success was OPM; i.e., Other People's Money. I suspect most who lived through that period heard of it? It was, of course, just another Get Rich Quick scheme. I suspect it never quite died. Don't get me wrong. There are times when borrowing money makes a lot of sense. But I honestly don't think it should ever be the foundation upon which a business is built. quote: Bob, I think you're in danger of assuming a cause and effect that hasn't been demonstrated. In my opinion, neither the boom nor the bust were the result of deregulation. You can't, when all is said and done, regulate either greed or stupidity. quote: LOL. Bob, I thought about just posting an empty entry here and letting you deduce my suggestions from that. We don't need regulations to protect people from themselves. We need to let them learn how to do that for themselves. We need to let people make their own choices so far as those choices don't hurt anyone else. When credit is too loose in a cycle the inevitable result is a cycle where credit becomes too tight. I think you might be surprised how quickly cash and carry could become the rule again instead of the exception. All without passing a single law, too. Let the pendulum swing. It will any way. |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
Dear Ron, Pendulums swing. Economic cycles are pendulums only by analogy. We can talk about pendulums usefully if we don't allow the metaphor to obscure the reality. Perhaps we disagree on that, but I suspect not. I don't suggest that borrowing is the only way to start a business. Never did. I didn't think you had fifty million bucks to start a business. Nor did I believe you were unique in starting one without borrowing. There are plusses and minuses to borrowing as a business strategy. As a businessman, you know something about this. You also know that one of the major reasons that beginning businesses fail is—what?—that's right, under-capitalization. And it may be important for businesses with outstanding debt, during times when they have a fair about of liquidity, to purchase their debt back to get onto more solid ground. Also an honored business tactic. Other People's Money was a vital business tool well before the seventies. It's not only still in style, it's be in style for a very long time and for good reason; it limits your own liability. Some folks might say this is the whole basis of the insurance industry, where a business gets one group of customers to pay for the losses that another might incur while the company in the meanwhile gets to invest most of everybody's money and earn a profit from that over and above the various payouts. As Richard Condon once said, the Insurance Industry is "a license to print money." Banking is run on much the same principles. When done cautiously, it's not a bad deal at all. Much of the financial services industry is built on these principles. Historically, the basis of this industry has qualified as being so miserable as to qualify as a sin in most of the Western world: Usury. Historically the differences between Usury and plain old Interest have often been difficult to draw. Ron's low opinion of borrowing as a business tactic has a long history. Businessmen and politicians have bent their efforts on getting around the difficulties for an awfully long time as well. Ron is correct in saying that I haven't established a causal connection between deregulation and bust or economic difficulties. On the other hand, I wasn't aware that I needed to do so here, though I probably should have been. I am loathe to put time into economic research right now, though I may be forced into it. I might suggest that when I was studying economics in college, this is what was being taught. But I need to refresh my information before reasserting it as fact today. I would suggest that both greed and stupidity may not be utterly controlled with regulation, but regulation is not designed to be a foolproof control system. Both taxes and laws, I might suggest, are regulations. We keep both in place because there are clear needs for some laws and some taxes, though we may quarrel about which ones. They do a pretty much okay job much of the time in dealing with many of the issues they're supposed to deal with. We imprison some of the less intelligent crooks as well as suppress people we think are stupid for not agreeing with us politically or morally and—God help us— religiously and racially when we can get away with it. I'm sure others will disagree with some of my language here. Substitute your own, if you wish; I'm attempting to account for the way I see things, but I don't insist you have to agree with the exact details. I only intend to make the major point: That we do attempt to regulate the greedy and the stupid and others we consider dangerous, and that we mostly believe we should do it. Nobody suggests we repeal regulations against murder and theft. In fact we keep trying to regulate more and more greedy and stupid people. We imprison the highest proportion, I'm told, of our population of any industrialized country on earth. We're simply inclined to let off people who can buy their way clear. If they were poor, they'd be in jail. I'm not terribly interested in regulating victimless situations, Ron. I know you might have trouble believing that, but it's true. I believe if people want to drink, they should drink, and if they want to do drugs, that's what they should do. So long as they can manage not to drive with any drug in their system, it's fine with me, because when they drive, they affect other people. If people want to tote guns, I'm not thrilled because they are a threat to the people around them. I was at a party once where a guy started to wave a pistol around and make veiled threats. That affected everybody. Somebody might talk me out of that position if the stars were right and the wind was warm enough, but for right now, the man was a dangerous bully. If we were in Switzerland, I might think differently. But when somebody is in Ohio is sending acid rain onto the streets of Boston and New York, that's not a victimless situation. The farmer in Massachusetts didn't say he wanted to buy some acid to improve his crop yields, and the steel plant in Cleveland or Canton is trying to avoid any responsibility for controlling his behavior or taking responsibility for the damage he is doing. There, Ron, is a situation for Regulation Man. The decision not to upgrade emission controls does affect the folks in New Hampshire or Maine. quote: Here too is an example of where we differ. Yes, the pendulum will correct the marketplace. I know of no way we can become independent of the business cycles. But it may be possible to keep the full fury of the cycles from crashing down on us by some judicious use of regulation. There is, after all, considerable space between a totally controlled centrally planned economy and an absolutely wild and unregulated one. As population edges higher and the environment becomes more and more chaotic due to the elimination of more and more niches within it, the effects of these cycles threaten to become more and more serious. Exactly how serious they threaten to become is something that I encourage you to consider without regard to preconsidered positions, simply by looking at the world situation and thinking it through as best you can, and talking it through as openly as possible. Much as I enjoy the give and take of debate, I believe the stakes are higher than who wins on points here. In fact, I'd rather be wrong and lose, truth be told, than be right in a situation such as we're trying to deal with today. Sincerely, Bob Kaven |
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nakdthoughts Member Laureate
since 2000-10-29
Posts 19200Between the Lines |
"You can't, when all is said and done, regulate either greed or stupidity." "We don't need regulations to protect people from themselves. We need to let them learn how to do that for themselves. We need to let people make their own choices so far as those choices don't hurt anyone else." I agree, Ron. I have had alot of hardships recently and in the last 7-8 years ( some of which those friends of mine on here know about and others I have written about.) I have less than 4 months of a mortgage left, don't have a large savings or even a future savings but have managed to not use a charge card or even write a check in the last 8 years. I only work off of cash now ( which oddly enough does make it a bit hard at times when needing to rent a car when mine broke down in another state 2 months ago). After a separation in marriage(although he still lives in the "barn" apartment behind me) and had a major accident New Years, without medical coverage and no income on his part for 5 months, I "tightened my belt" and have been able to hold onto everything. It can be done if one does not spend more than what one can afford. Somewhere in my generation the charge card and "owing" became popular. I see people charging a soda and sandwich at stores or breakfast at a restaurant ...or a pack of cigarettes...I can't understand that. Anyway, I just wanted to say that I have learned to be satisfied with what I have and don't have to keep up with the Joneses, whoever they once were. M p.s. I do feel for those who are losing their homes through no fault of their own, but for those buying the mini mansions or thought to buy several homes to make a buck off of those who have foreclosed... I don't have much sympathy. Also: My husband had a concrete business and the capital came from the money he and his father and partner had to begin with. It wasn't alot but was enough to start small and grow from there. And when weather was bad during spring or winter and there was a loss of work, you couldn't get a low interest loan to help them out, as did many swim clubs and ski resorts etc... so I have always had a hard time understanding who could get aid when needed, without going bankrupt, which we never did. |
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Balladeer
Administrator
Member Empyrean
since 1999-06-05
Posts 25505Ft. Lauderdale, Fl USA |
Ron, you are advocating that people live within their means....how radical is that?  Before you know it, you'll be advocating taking all those cute commercials off tv, the ones like DON'T LEAVE HOME WITHOUT IT - IT'S READY WHEN YOU ARE -GETTING STUCK UP TO YOUR NECK IN DEBT? PRICELESS!! Unfortunately, there's only one thing money can't buy.....poverty.  |
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Local Rebel Member Ascendant
since 1999-12-21
Posts 5767Southern Abstentia |
First -- I'm a complete advocate of paying down debt -- as far as personal finance goes -- because -- you're hard pressed to find a passive investment (as opposed to investing in yourself and starting a business) that will yeild an annual percentage rate to offset the rates that most people will be paying on a credit card -- especially when it balloons up to 29 percent. Second -- I'm also an advocate of one of the most cherished and patriotic acts envisioned by the Founding Fathers -- the ultimate check on predatory lending -- bankruptcy -- a measure taken by Jefferson himself several times. The debtor prisons of England were inspirational to the Founders -- in that they wanted no such prospects for future generations of American citizens. Now -- when it comes to business -- it would be irresponsible to NOT borrow money if doing so makes more money. Many businesses -- such as car dealerships -- floorplan all the inventory -- floorplanning makes a larger selection available on the lot -- which increases the opportunity for sales. It's a common practice in other retail sales environments as well. Some businesses, like general contractors, tool and die, capital equipment builders -- don't get paid until the job is done -- which may take months, or years (and also have huge investments in capital equipment) -- so in order to have cash-flow at all a steady stream of borrowing is required -- to buy the materials, make the payroll, pay the taxes, etc. In a business setting credit shouldn't be thought of the same way as in a personal realm. Credit is a means to capitalization -- a kind of selling of stock, short term, to a very, very, very, silent partner -- until a payment is missed. |
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Local Rebel Member Ascendant
since 1999-12-21
Posts 5767Southern Abstentia |
Denise -- without getting into any specifics about particular insurance companies -- in general -- no matter if an insurance company is owned domestically or not -- it still has to operate according to the laws of this country -- which means that a liquid reserve has to be kept in order to pay out claims/cash values of policies. Even if one insurance company goes belly up -- another one -- in most cases the re-insurer -- would be happy to take over that cash reserve and the policies that represent an income stream in the form of premiums. So, I wouldn't sweat it -- but if you don't want to wait for the letterheads to change on your statements -- just check with your Secretary of State's office or whichever state agency would have jurisdiction. Threadbear -- um... so, the reason that we have speeders is because we have troopers patrolling and writing tickets? Nope, wait, that's not it-- it's because we have speed limits. Yeah -- that's it... we should eliminate speed limits -- then we wouldn't have any speeding Yeah -- that de-regulation thing works every time... Do some research on New Zealand: quote: [This message has been edited by Local Rebel (10-04-2008 12:05 AM).] |
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rwood Member Elite
since 2000-02-29
Posts 3793Tennessee |
Dear Bob, Your assumptions have missed the target. This crisis is nothing new to me. I’m an insider who became an outsider, 5 years ago. On January 1st, of 2003, I no longer had a job. The amount of new qualifying loans became sparse. I wouldn’t do junk loans, nor would I purposefully over-estimate/appraise the worth of property. Nor would I finance a person over 75% of the appraised value. I also wouldn’t shave the numbers to qualify them on their debt-ratio or any other reported figure. And I refused to tack-on sneaky insurance products which gained the industry pure profit and the customer a higher monthly payment. I’ve never issued a variable interest rate and feel such is nothing but a shark tactic that needs legal examining. My earlier suggestion was pure sarcasm but no less fair for them if they enforced a variable rate. According to the bank I worked for, I didn’t do anything “right.” They were the 4th owners I’d had in 10 years, and they were no different, fundamentally, than each of the prior owners. Fear and greed, is as ingrained in the money industry as the tiny red fibers of our bills. I took my own personal losses and I went home. Within one year of my layoff, the entire office was liquidated because the pressure from the suits finally broke my fellow employees and they put on junk they couldn’t collect. 9 out of 10 of the loans that went bad were completely expected. Do you think that when the bank sold those accounts that they didn’t make a profit? $4,000,000,000. In less than 3 years of operation. quote: What are they really doing with a bail-out?? Since this isn’t the first one, how are we dealing with it? What could I possibly feel better about? That I had to adjust my income to 1/4 what it was with unemployment? Yes, actually. I feel fine. I stuck to my principles, and I went back to college, and I started my own business without borrowing a penny. I worked really hard to rework and rethink my standing and I didn’t ask you or anyone to bail me out. quote: ? My position is that the people in charge of monitoring the practices of the CEO’s didn’t do their jobs, and now everyone is paying for it, again. Because we’re already been paying out for their salaries. A bail-out is just a national spanking for many who don’t deserve it and those that do still get to keep their bonuses for yanking the money chain the wrong way. And I’m seriously not untouched. What do you want to start with first? My marriage? Over. My home? Sold and downsized. My kid’s college education? Had to push and pray for damn good grades. My retirement plan? Rolled it. Health insurance? Are you kidding? But you know what? Life isn’t over as long as this lady has a voice. I’m making it, day by day, and I’m helping others to do the same. I don’t know anyone who does everything right. quote: Uh, ok. But just so you know, my utilities/power here in Tennessee is supplied directly by TVA. Google it. You’ll see how plausible it is. quote: Every financial market is flexible or else we’d still be perpetually stuck on Black Tuesday. Floating a business from week to week on nothing but borrowed funds is a red-flag business that is bound to go belly-up. No one goes into business without the risk of failure being a very real risk, regardless of whether I feel badly for them or not, no one can float their way to retirement without making a true profit. quote: With our without a bail-out bill, you underestimate the power of the FDIC. And you underestimate just how far they will expand when it comes to a crisis. As I have expressed, the FDIC has just released an increase to $250,000. They also have the power to extend loan modifications, which means mortgages can be reworked to a fixed and affordable rate, preventing a foreclosure. Again, Google FDIC and it’s on their front page. They can walk in and take over a banking institution, anytime they see fit, and the business is “absorbed” into the veins of the government, so it’s much much more than an insurance scheme. Just ask Indy Mac. I may not agree with their complete set-up, but they are an entity already at work. 3) What other funds, specifically, are you talking about that are already present? I’ve already mentioned the reserve for losses funds. Nearly every state has a buyer’s program funded by that state which can help with refinances and new loans. October is the usual fiscal renewal of that fund from taxpayers throughout the year. The VA fund for the military seems sound. I’ve already mentioned the unclaimed funds the IRS is sitting on. Open that up to the small businessman who needs a small loan ! State sponsored Lotteries are supposed to support student loan funds! Oh, and how dare I neglect to mention small business grants offered and given by the federal government. They are not just available to foreigners. These are the common funds off the top of my head with too many more to invest time in. quote: Well, Bob. Many are already in the loom, and have been. It doesn’t always take a national catastrophe to be in one. I’m not uncaring by no means and by no means can I afford to be. That’s my point. I know my worth. Unless more people start to realize this and live within their means there will be more government and less independence, and how can that ever be more for the people? Where the heck was a bail-out for Katrina victims?? I’m sorry but unless it hits home, people just don’t get it. Maybe now, they will. |
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rwood Member Elite
since 2000-02-29
Posts 3793Tennessee |
On a bottom note: quote: Thanks, and I'm sorry you're upset. quote: No, Bob. I can't say I share your thoughts on that. I'm not even sure how a body could ever demand a clear investment? That doesn't hold water. Risk is the muddy variable. quote: Not hardly, Bob. I tossed my money at the COMPETITION!! Who had better proven standards and principles than the bank I worked for. |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
Dear rw, Thank you for your detailed and thoughtful response to my comments. Some of what you say in your response to me was, I believe, addressed in my comments to Ron in the thread between my comments to you and your response above. I usually address my comments specifically, but understand that the forum is a public one. I'll try to address as much of your letter as I can at this time and try to get back to whatever I miss as some later date. quote: I'm uncertain about the meaning of what you're saying here. I mean I'm literally uncertain of what you're saying here. Assumptions are not arrows. I'm not sure which assumptions of mine you're addressing; but at any rate assumptions are preconceptions about the nature of things or conditions and are what arguments are grounded in. And exactly what is the target you are talking about? I am apparently missing something with something, you believe—and you may, by the way, be right—but I can't tell because the point of what you're saying here is lost to me. I assume the fault is mine and that I have simply failed to follow the obvious, but I would be grateful if you'd fill me in so I can further clarify your point, contest your point or concede it. quote: I have a great admiration for you. It sounds as though you managed to get out with your integrity intact, though still feeling considerably bruised from putting up with the greedy and rapacious folks for as long as you did. I'm admiring, as I said before. I suspect it's more than computer-geek talk when people say "garbage in, garbage out;" it may be some sort of cosmic law of karma. I can hope so at least a little bit, can't I? and of course the loans ended up in the trash—no quality control on them at all, was there? quote: I think that's wonderful. I mean this without any under-text at all. I think this is wonderful that you have the wherewithal to manage this. You sound proud, and I believe you should be proud. There still are businesses you can start without borrowing a penny, and there are jobs for people to work at if you look hard enough. The less money people have overall, however, the more difficult it becomes to start a business and to keep it going. The more the business and manufacturing segments of the economy contract, the less money businesses have to hire people. What you have done here, I believe, is offer a micro-economic answer—that of your own personal experience—for a macro economic problem. The answers on two different levels of scale may be completely different. Take physics, for example. On one level of scale, one uses Relativity to make decisions, on another level one uses Newtonian mechanics to make decisions, on yet another level one uses quantum mechanics to make decisions. It may be possible that these are all related, but until we know how, the answers must be arrived at differently and they don't seem to be consistent across the board. Nor is it at all clear that your micro-economic example applies to macro-economics. It gives people a certain comfort and sense of control to make that connection, but the connection is probably not that direct. quote: I think I need to respond to this exchange in two pieces. In the first piece, you respond to my question about the consequences of not bailing out these real estate and, more importantly, consumer credit situations, and reforming the bankruptcy laws? Your response is that you think that this is a national spanking for us, the public, and that we don't deserve it. I happen to agree with you on this point, by the way. I believe that the government has run up a massive debt through its tax and deregulatory policies, has invited industry to dine at the trough, and is now attempting to hand the bill to the public. It has done so, I believe, on purpose to attempt to dismantle the efforts of the progressive movement in this country to put in a safety net in the firm of social security and medical coverage. In handing us this bill and an ongoing war, I believe the neoconservatives are attempting to make spending on such programs impossible for at least another generation, and that they are heedless of the actual social cost to the nation. That is, however, my own private hobby horse. No we don't deserve it, but we are being held for ransom for fear of what will happen to the macro-economic picture should we not pay off the cost of drunken spending spree run up over the past eight years. My fear is the crumbling of the economy, including the one that supports you and your neighbors, rw, should somebody not try to get this debt paid off and to get some sane regulation in place to prevent it happening again. The second part of my response is to your list of your losses. I'd asked about what you thought the consequences might be of not doing a bail-out, and your response was to offer a list of things you've already lost. I don't know how to go ahead and say this without seeming to diminish the massive effects of the losses you've listed and the efforts you've made to overcome them. I don't want to do that; I respect these things. But my question was not about the past, and your answer was. I was getting at the consequences of doing nothing for us, the people who will have to bear the cost, and you were answering a different question entirely. I urge you to consider the question I asked. quote: I know it's the TVA; Tennessee is on your tag, rw. That's why I used the example. As you're aware, however, the Devil's in the details. What is a happy solution for the Three Gorges in China, though some dispute that, and for the Tennessee Valley area and for much of Quebec and upstate New York simply doesn't work for the Sahara or the Gobi, does it? It's a "black box" solution that you're suggesting, like telling the public we need more education every time another social issue comes up. Pretty soon, the school year is so taken up with mandated social issues, none of them actually get covered well and they're teaching a biased view of addition. Let me know when they start replacing gas powered cars with electric in Tennessee, by the way. There may be other reasons for non-use of a resource than availability. quote: When you find somebody who says we should run businesses on nothing but borrowed money, I will disapprove of them as much as you do. Why you should bring an idiot like that up here is beyond my understanding, unless you're suggesting I said such a thing. I did not. Nor did I suggest you might be able to retire without a profit. Who made these statements? And am I to understand that these statements are supposed to answer the questions that I asked above? They answered none of them. Why even bring them up? quote: I have not looked them up, I assume they are as you say. However, to assume that the government can cover $100,000 of all deposits was clearly not enough, which says something about the depth of the problem. There is simply not enough money to cover $250,000 worth of deposits for everybody in the country, even given the fact that most deposits are only a tiny fraction of that. Those whose money is in banks know enough to keep the monies in separate accounts or even separate banks if it's over $100,000. The move to raise the insurance was one designed to bolster confidence, not to raise actual insurance coverage on anybody but the reasonably unthinking. This government is not particularly interested in preventing foreclosures, I suspect; the banks and businesses are its constituents and not the people who own actual houses as more than a casual thing; not their major investment, certainly. quote: I thought you didn't think people should accept loans? It's probably only for business you think they shouldn't accept loans. Small business "grants," those must be different. VA loans must be different. All of a sudden you're talking about government loans and grants, but you haven't assessed the amount of money needed or the amount available from the sources the say have it. Perhaps it would be useful to check and see how much the need is and what the available funds would cover, don't you think? You have side-stepped the issue by naming potential sources of income, but not actually saying what the need is and then not saying what's available. If the initial need here is for 700 Billion dollars, then where in this group of funds that you mention is there a free 700 Billion dollars? Otherwise, you could list mom's milk money next among the programs you're talking about with such confidence. Unclaimed money in the IRS is not yet IRS money, is it? It may even be yours. quote: Sorry, rw, there's much I simply don't understand here. Again, literally. "Many are already in the loom, and have been[,]" I take for some sort of southern idiom I haven't run across before, but I don't know it. When you say you're not uncaring and can't afford to be, I want you to know that I believe you, and I know that you wouldn't have said such a thing if you hadn't have had a moment of thinking you did sound that way. When you talk about independence from the government a bit later, even though I have a disagreement with you about this point, I think you should know that I believe that this sounds like your method of caring, a sort of tough love, that really does want the best for people. I can see that you want that as I hope you can see that I want that too, though very differently. I'm with you when you ask about the bail-out for the Katrina victims. If you look at the GAO reports for that you can see where the bailout for Katrina victims went, what little there was of it. It would only upset you as much as it does me. As does the current state of things there. As for the need for government, how much and in what form, that's a talk for another time. I find much that the government does much too intrusive, especially in the area of civil liberties and the expansion of governmental power, especially executive power. I hope whoever gets elected president will have the courage to scale back on the intrusiveness of government into civil liberties, but I don't know how to unring that bell. The Patriot Act frightens me blue. I'm not at all certain anybody knows everything that's in it, and the governmental reorganization and increase in governmental powers that has gone with it is not good. Again, conversation for another time. With admiration as well as disagreement, yours, Bob Kaven |
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rwood Member Elite
since 2000-02-29
Posts 3793Tennessee |
Hey again, Bob. Your assumptions were delivered by your language of familiarity with me and who I am. Since you cannot have any direct knowledge of what I really feel or what I’ve done, I tried to clarify that for you on an interpersonal level. I feel I answered all you posed to me the best I could. I’m sorry, but now we’re just down to sciences that detach people from their efforts so they will appear more microscopic to a governing mediocrity. No use in quibbling the bits since 700 billion dead presidents have saved America! Why can’t I believe this to be true? I, for one, feel more sick inside. But since any hope of a health care reform is now toast, I’ll just suck it up and keep micro-managing my life so that I don’t become a drain on the big macs. quote: I don’t feel diminished, btw, even though you keep trying to round me into the Nothing hole, when I am squarely for something beyond the bail-out hole we are very currently in. I failed to convey, which isn’t the first or the last time. quote: Wrong. I said: Yes, people have to responsibly borrow. quote: You asked me to list some funds, Bob. I didn’t know you were asking me to audit the industry. I’m gonna step off now, because obviously it’s easier to believe the government will give us all a magic carpet ride than to actually look into several very real alternatives available. Even if such funds would not completely cover the debt it would reduce it, which reducing interest rates helped immensely. Again, it doesn’t matter what I think. It’s a done deal. quote: I’ll take that as some sort of kudos, but it’s plain English, to me, Sir: The loom of a catastrophe. In direct response to your quote of: “the same spirit of non-regulation suggests that we do nothing to deal with the catastrophe that looms ahead.” No probs. Mutual respects, and thanks for the exchange. reg |
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Bob K Member Elite
since 2007-11-03
Posts 4208 |
Dear Reg, It matters to me what you think. Nor am I happy with the bailout. I think simply that a financial gun was held to the head of the country. The country as a whole has been sticking its head in the sand for the past eight years. Nobody wants to pay, including me, but we're in hock to credit card companies and banks and some portion of that debt is to the bond market where debt was being packaged and sold. I believe this is only the beginning. The rates on some of that credit card debt runs to 24% per year, and it's very difficult to declare bankruptcy. 24% is like printing your own money, if you're the one loaning it out. If you're paying that, as many people are, it's an insane burden, and it can't be sustained unless we have runaway inflation. The whole system is leveraged against each other, if I understand it correctly. Someday a hummingbird will sneeze on its migration to Mexico, and the whole country will come down. In the meantime, we try to save it as best we can. The government during the past eight years has been trying to accomplish this with the economic policies its been following. There are some Democrats I'd like to speak to as well, mind you, but this government has not only been spending money on war, it's been giving it away as though we had no need for it and putting our infrastructure in incredible jepardy. You mentioned New Orleans yourself and the gulf coast; do you think you've gotten the aid they needed? Well, I don't mean to rant, so I'd better stop here. All my best, Bob Kaven |
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Local Rebel Member Ascendant
since 1999-12-21
Posts 5767Southern Abstentia |
Bob, I don’t think you can lay the scope of the current financial crisis on the steps of the Bush Whitehouse. After all, it was the Clinton administration and the Republican Congress (sponsored by Phil Gramm) that negotiated the destruction of Glass-Steagall act in 1999. And the Clinton administration pressured Fannie and Freddie to expand ownership in the sub-prime lending markets. This thread weaves its way all the way back to Ayn Rand, Greenspan, Reaganomics, the Republican Revolution, New Democrats, and Neo-Conservitism. While it is largely a function of ideology – one held by the Bush admin that has been extremely lax in enforcement – I don’t think it’s fair to only talk about the last 8 years. |
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threadbear Senior Member
since 2008-07-10
Posts 817Indy |
Splendid response, Reb, and while we're listing the culprits can we also mention the following concepts which had a direct effect on how we borrowed money without a conscience: - moral relativism & accountability for actions - entitlements - a 'house in every pot' philosophy - 20% down no longer required for home purchase - greed replacing common sense in financial markets |
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