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how is the economy effecting you?
divemaster127:
Sorry Saint, I should have done the math, some what Hannity says is good, but he is also full of it a lot of the time. Doing supply for the military I see so much waste. Year end is coming up for the goverment in september if the goverment departments do not spend there money then they loose the funds for the next fiscal year. For example last year a military base in Alaska had a ton of money & told me just to ship them 5,000 4 prong dryer cords at 20.00 each we will never use them but that way we will not get our budget cut. With waste like this how is the economy every going to recover.
dm
ark_ader:
--- Quote from: divemaster127 on August 14, 2010, 12:51:11 pm ---Sorry Saint, I should have done the math, some what Hannity says is good, but he is also full of it a lot of the time. Doing supply for the military I see so much waste. Year end is coming up for the goverment in september if the goverment departments do not spend there money then they loose the funds for the next fiscal year. For example last year a military base in Alaska had a ton of money & told me just to ship them 5,000 4 prong dryer cords at 20.00 each we will never use them but that way we will not get our budget cut. With waste like this how is the economy every going to recover.
dm
--- End quote ---
I won't not for a very long time. The good time days are over. The USA needs to look at new avenues of self sustainability like freeing ones self from gasoline consumption. Using my analogy about cheap labor, to get products that are made in China, back into US factories. Regulated Union laws, so that these products do not end up being made back in China again. Ship building, electric car manufacturing, greener military armaments, unrestricted wheat and other food production for exporting. More arcade games built, etc.
Make people financially responsible for their debts. I remember in the 1990s in So.Cal when those who did not pay child support were treated to TV airtime before the news. Name and shame. Make people think twice before borrowing.
Bring back debtors' work/poor houses. It worked in the Victorian days, why not now? So you would have to change some laws. Big deal. ;D
Time for America to dig deep and find itself again. Oh and stop spending on pointless wars. ::)
danny_galaga:
--- Quote from: ark_ader on August 14, 2010, 05:00:19 pm ---
Bring back debtors' work/poor houses. It worked in the Victorian days, why not now? So you would have to change some laws. Big deal. ;D
Time for America to dig deep and find itself again. Oh and stop spending on pointless wars. ::)
--- End quote ---
That is a very bad idea. Poor houses were exactly that. places where people who were flat broke (and in those times, born into it and destined to always be) could at least be some value to society. Misguided because a better value to society (which they started to realise around Victorian times in England, earlier in the US) is to raise the standards for people. Better education, opportunities etc.
I digress. If you are referring to people who have recently declared bankruptcy working in a 'poor house', then this is a step backwards for society. In Victorian times, a poorhouse worker had no skills. They were put to work making pins or bricks or what have you. Modern american bankrupts for the most part have many and varied skills. You really want mechanics, bakers, truck drivers, sales people, pilots etc making plastic bags instead? Is that how your economy will recover?
pinballwizard79:
Dont blame the banks guys...
Blame the consumer for leveraging themselves & not planning ahead
Blame the agencies that fibbed regarding the AAA bond rating
Blame the government for pushing Fannie & Freddie to extend credit
Blame the person who was given a subprime lifeline & a chance to turn it all around but then blew it just to cry for help
Blame yourselves for having 401ks & mutual funds packed with mortgage securities to keep the wheels turning for everyone
Blame people who financed more than 25% of their monthly income
ARM loan increasing? Well you must have been a real POS before that ARM because anyone with good credit has had a 3.25% rate on their adjusted mortgage for the last 2+ years & will continue to do so for several more years since the LIBOR is so weak. America lost its 2nd chances when subprime died. The person with that subprime ARM is subprime because they already defaulted before even applying for the new mortgage, years ago. So do we blame the banks from back in the day who gave this person money back when they had good credit? I mean they created this monster thats now asking for subprime money right?
Think about this.. bad credit = difficulties with acquiring a good job (which makes the repair process take longer), higher insurance costs (which makes the repair process take longer), bad places to rent at best & no traditional ways to borrow means you get payday or title loans only (which makes the repair process take longer). Also dont think its only 7 years of bad luck either because it could take you 7 more years just to get in a position where that defaulted debt thats stacking with fees (which makes the repair process take longer) is finally PAID off & reporting as positive. So now we lost some serious ---steaming pile of meadow muffin---, a slew of people who will be unable to buy anything for a long time with no 2nd chances to fall back on.
Banks offering too much credit? Um no, banks dont lend their own money guys. Its all about agencies & investors buying paper, thats where all the money came from not the banks & thats why lenders lost their liquidity, not due to regulation but to to investors fearing the investment of buying paper.
The government blasted the banks for stated loans & 125%'s. Now the government has the HARP program that "helps people with income troubles refi up to 125%" which sure sounds a lot like the loans they regulated away wow. Let me correct myself, they mentioned regulation which scared the investors & over the course of 72 hours subprime crashed because investors didnt want to dump money into endangered species, then we lost our liquiduty & the bottom finally fell out with no 2nd chances for I dunno half our country
Endaar:
--- Quote ---The banks deserve a much bigger share of the blame from a societal perspective. When I make a bad financial decisions, I affect me (and my family).
When the bank makes bad financial decisions, they effect... well, the entire economy as we saw.
--- End quote ---
Lenders aren't stupid; they have models which are certainly well established enough to know pretty accurately who is and isn't a good credit risk. Yes banks want to make as much money as possible, but far from that being an incentive to make bad loans, it's an incentive only to make loans where the expected reward is worth the risk.
So what happened? The problem is that the banks were essentially coerced into making many of these loans. The Community Reinvestment Act first enacted during the Carter administration and then strengthened under President Clinton encouraged banks to make loans more readily available to less than ideal borrowers. Many of these loans were then repackaged and sold to Fannie and Freddie, which investors (correctly, as it turns out) considered safe because their status as government sponsored entities would preclude them from defaulting.
I'm deliberately trying to avoid placing blame on any one individual or party (not that I don't have my opinions), but the argument is pretty compelling that the federal government's involvement in housing and mortgages intefered with the free operation of the credit market. And to reiterate something I said earlier, banks have zero financial motive to make loans that are unlikely to be repaid.
I spent a lot of years in the retail auto industry, working in areas where we dealt with a ton of subprime auto loans. And while default rates were certainly higher on submprime loans than more conventional loans, they were not excessive. Why? Because subprime auto lenders demanded a tremendous amount of information from potential borrowers. Proof of income, extended proof of employment, lots of references, proof of address via a utlity bill or rental agreement, etc. Show up to buy a car with an 800 credit score and you could finance 110% with little more than a signature. Those with 550 credit scores needed 20% or more down and all the docs mentioned earlier. Were the auto lenders smarter than mortgage companies in making sure they knew the risk they were assuming? I don't see why they would be. They just operated in a less regulated market, and thus were better able to accurately assess risk and turn down loans where that risk was excessive.
So yes, banks have much more effect on the economy as a whole than any individual borrower. But the government can screw things up far more than any number of banks. And this financial mess is a direct result of too much government inteference rather than too little government oversight.
Endaar
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