Hello, friend, your urgent help needed

[kittle]

Finally somebody with a clue...

....
They allowed people with lower incomes to buy a house that they previously couldn't afford.

And if they could not afford it before... the price of the house didnt change (in fact it probably went up)... whats to make them afford it now?
oh yeah.. ARM. people seem to forget the first word in that acronym - Adjustable. your rate now will not be the same in 3-5 years. But people snap up this loan, fulfill their American dream, and continue to live the lifestyle that could not afford them a house in the first place. 3-5 years later, the Adjustment comes.
homeowner: 'Holy &#**@! I cant afford that payment'
my comment: "shoulda thought about that BEFORE you signed the mortage papers"

....
As for the bailout, I'd rather see the money go into financial education of the general public, so people can be more aware/conscientious of the significance of these types of dealings. Just because a bank is willing to lend you a certain amount of money to buy a house, doesn't mean you can afford it...

Amen to that!
Banks do NOT have our best intrests at heart (im sure people can find an exception somewhere). So folks who ask a bank "What can I afford?" are setting themselvs up for disisaster. The bank will be all to glad to take your money in any form they can find.
Instead people should be telling the bank "this is what I can afford"

but such is life in our buy it now, pay later society.

[rbrodka]

I heard a commentator on TV this evening mention that the bailout plan might include buying these toxic securities from foreign banks. Has anyone heard this? Are the US taxpayers going to be bailing out foreign banks?

[aristide1]

Tonight I was watching "Kelly's Heroes". It was at the point where Kelly & Co had gone into the small town behind enemy lines. They were now stuck. Their tank had broken down and the lone German tank was in the town square, the only thing standing between Kelly and Co and the millions in gold. Telly Savalas was talking to Don Rickles about the situation.

Rickles: So make a deal.
Telly: What do you mean deal?
Rickles: A deal deal. Business is business. Maybe he's (the German) a republican.

[qviri]

I heard a commentator on TV this evening mention that the bailout plan might include buying these toxic securities from foreign banks. Has anyone heard this? Are the US taxpayers going to be bailing out foreign banks?

How do you define whether a multinational corporation is "foreign"?

[aristide1]

I heard a commentator on TV this evening mention that the bailout plan might include buying these toxic securities from foreign banks. Has anyone heard this? Are the US taxpayers going to be bailing out foreign banks?

How do you define whether a multinational corporation is "foreign"?

Which peoples it sells out the most frequently and most severely.

[aristide1]

Regulation without accountability won't matter.

[Faster_Madman]

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had a crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailoutattreasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with
detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

Are the modalities demurraged?

[qviri]

How do you define whether a multinational corporation is "foreign"?

Which peoples it sells out the most frequently and most serverely.

Vast majority of them are Indian or Chinese, then?

[aristide1]

homeowner: 'Holy &#**@! I cant afford that payment'
my comment: "shoulda thought about that BEFORE you signed the mortage papers"

Hey, it's a 2 way street. Ethical banks don't lend to people that clearly can't pay. Lots of people used to be routinely denied mortgages. You also can depend on someone more when they have 20% down as opposed to zero down.

What happened to the mortgage seller and his relationship to the stockholders of his bank/firm? Did the seller perform what was in the best interest of the company? The stock price alone of these firms answers that question. Should the stockholders be allowed to sue? Well, that won't matter in a corporate-ocracy, you simply won't be allowed.

As a customer I want my bank to be stable at the expense of high earnings. If the bank is taking a gamble with my money that's not acceptable. I chose the degree of risk, or at the very least I get a clear and truthful (100% truthful, not M0002a style) picture of what's going on.

[aristide1]

How little things have changed, and certainly not for the better.

Ripley comparing aliens to humans, 1986:

You know, Burke, I don't know which species is worse. You don't see them f__king each other over for a goddamn percentage.

[m0002a]

As a customer I want my bank to be stable at the expense of high earnings. If the bank is taking a gamble with my money that's not acceptable. I chose the degree of risk, or at the very least I get a clear and truthful (100% truthful, not M0002a style) picture of what's going on.

As a customer, your deposits are insured by the FDIC up to $100,000 per account. The FDIC is backed by the US Government. That's the truth from m0002a.

[NeilBlanchard]

Hi,

Right, if the person writing the mortgage actually thought about how they were sabotaging their own company, nay their own country -- or the whole world -- by writing what they know to be a bogus loan; or a whole bunch of bogus loans, they might have realized that the $10-15,000 fee they got for signing each loan really was not worth it?

And what about the CEO of that company that needed to match what the other guys were doing, and make unbelievable profits for the shareholders (and thereby for themselves) that were knocking down their doors with fistfuls of cash -- all saying gimme some o' 'dat!?

It takes a willing lender to make a loan, and I guess it only takes $10-15,000 for a few days work to get people to falsify a loan application -- because hey, we can just sell this one on up the line, and it'll get sliced and diced up, and no one will be the wiser! And the fee we are paying to the folks who are rating our wares should be good for something?

Do you really think that millions of everyday people all figured out how, at the same time -- to hoodwink those straight-laced and honest mortgage companies into loaning them inflated amounts of money to buy a house?

Oh, and you wouldn't want to stifle our economy with a whole lot of pesky regulations, now would you? Oh, and by the way -- we have to talk about that capital gains tax... Here's a nice little campaign contribution to remember me by, in that next subcommittee meeting...

[m0002a]

Hey, it's a 2 way street. Ethical banks don't lend to people that clearly can't pay. Lots of people used to be routinely denied mortgages. You also can depend on someone more when they have 20% down as opposed to zero down.

What happened to the mortgage seller and his relationship to the stockholders of his bank/firm? Did the seller perform what was in the best interest of the company? The stock price alone of these firms answers that question. Should the stockholders be allowed to sue? Well, that won't matter in a corporate-ocracy, you simply won't be allowed.

Unfortuneately, it is more complicated than that. Maybe a three-way street. So long as real estate prices continued to rise, the assets that secured the mortgages were worth more than than mortgage (even with most 100% mortgages).

You will be allowed to sue (I would recommend John Edwards, since he is an excellent plaintiffs lawyer and made millions suing people). But there is probably no money left that can be paid in a judgment in your favor even if you win. Bankruptcy is bankruptcy, and anyway the owners of a company should not be rewarded if the company fails. Just like a bank should be leery of giving money to a borrower, a stockholder should be equally leery of buying stock in a company. Caveat Emptor.

There are plenty of advisors who have told people that the bank stocks are too risky. In fact, the reason why many of these banks went under is because most people came to believe the banks where insolvent, even before they were. Banks run on the basis of confidence, since they don't keep your money in a vault (they loan it back to other people and secure it with non-liquid assets). Once the confidence is lost, the bank will go under even if it might otherwise survive if given enough time to liquidate its assets.

[aristide1]

Unfortuneately, it is more complicated than that. Maybe a three-way street.

The point I tried to make in my response was it was clearly not a 1 way street, as he implied.

[aristide1]

As a customer I want my bank to be stable at the expense of high earnings. If the bank is taking a gamble with my money that's not acceptable. I chose the degree of risk, or at the very least I get a clear and truthful (100% truthful, not M0002a style) picture of what's going on.

As a customer, your deposits are insured by the FDIC up to $100,000 per account. The FDIC is backed by the US Government. That's the truth from m0002a.

And just how many banks do you think that will last?

[m0002a]

Hi,

Right, if the person writing the mortgage actually thought about how they were sabotaging their own company, nay their own country -- or the whole world -- by writing what they know to be a bogus loan; or a whole bunch of bogus loans, they might have realized that the $10-15,000 fee they got for signing each loan really was not worth it?

And what about the CEO of that company that needed to match what the other guys were doing, and make unbelievable profits for the shareholders (and thereby for themselves) that were knocking down their doors with fistfuls of cash -- all saying gimme some o' 'dat!?

It takes a willing lender to make a loan, and I guess it only takes $10-15,000 for a few days work to get people to falsify a loan application -- because hey, we can just sell this one on up the line, and it'll get sliced and diced up, and no one will be the wiser! And the fee we are paying to the folks who are rating our wares should be good for something?

Do you really think that millions of everyday people all figured out how, at the same time -- to hoodwink those straight-laced and honest mortgage companies into loaning them inflated amounts of money to buy a house?

Oh, and you wouldn't want to stifle our economy with a whole lot of pesky regulations, now would you? Oh, and by the way -- we have to talk about that capital gains tax... Here's a nice little campaign contribution to remember me by, in that next subcommittee meeting...

A big part of the problem is that the majority of home loans in the US are sold to FNMA/FRMAC (who purchase 50% of all home loans on the secondary market). FNMA/FRMAC then packaged the loans into mortgage-backed bonds that were held by pension funds, other banks, and little old ladies in Pasadena. Some large banks and investment companies (such as Lehman Brothers) kept the loans they made and bought other loans on the secondary market.

So many times there was no direct connection between the loan officer and the institution that eventually ended up with the loan. FNMA/FRMAC were established by FDR in the New Deal to provide liquidity to the mortgage loan market by purchasing them on the secondary market, but they apparently did not have enough controls in place (in 1968, the government freed Fannie Mae from its control and privatized it with a Congressional charter).

As mentioned before, Jim Johnson and Franklin Raines (both of them former FNMA CEO's) were advisors to the Barack Obama. Johnson at one time headed up Obama's VP selection committee.

Here is some more info on how FNMA works, and its place in the nations mortgage industry and a discussion of its current problem.
http://prorev.com/2008/09/everything-yo ... about.html

[m0002a]

And just how many banks do you think that will last?

I assume you mean how much money does the FDIC have to make good on deposits if a lot of banks fail?

The US Government will make good on any and all deposits that are insured by the FDIC. The US Treasury has a printing press to print as much money as necessary to make good on those deposits.

The FDIC and the US Government backing of it, is the big difference between 1929 (Great Depression) and today.

[m0002a]

The point I tried to make in my response was it was clearly not a 1 way street, as he implied.

Yes, and I agree with your statement.

However, the third street is FNMA/FRMAC because the people who make the loans usually don't keep them, they sell them to FNMA/FRMAC. So FNMA/FRMAC should have had stricter regulations in place before they agreed to buy the loans from those who made the loans in the first place.

[aristide1]

So you're saying that if enough money is lost they will print more and make it all worth less. I feel better already.

[m0002a]

So you're saying that if enough money is lost they will print more and make it all worth less. I feel better already.

The US Government has been printing money since Richard Nixon took us off the gold standard. I wouldn't worry too much, since the total amount of money is not that large compared to the total number of dollars in circulation. But it will cause some inflation and some devaluing of the dollar if it got totally out of hand. OTOH, the consequences of printing money are a lot less than of a bank run on every bank in the USA.

[aristide1]

Get a load of this:

http://www.wral.com/business/story/3614388/

Would you want more of your retirement funds in the hands of the government?

[m0002a]

Get a load of this:

http://www.wral.com/business/story/3614388/

Would you want more of your retirement funds in the hands of the government?

Without specfically saying whether I think the bailout is a good idea, the money is not being "given away" to anyone.

"Moore said he would provide some of the pension fund's $75 billion in assets to assist the bailout in exchange for a guaranteed interest rate to ensure the more than 800,000 North Carolinians who count on the fund would benefit from the move."

He wants to provide money to loan to the companies, which would be guaranteed by the US government. Most pension funds have very heavy investments in the affected financial stocks, so they are really trying to help themselves.

[aristide1]

Get a load of this:

http://www.wral.com/business/story/3614388/

Would you want more of your retirement funds in the hands of the government?

Without specfically saying whether I think the bailout is a good idea, the money is not being "given away" to anyone.

"Moore said he would provide some of the pension fund's $75 billion in assets to assist the bailout in exchange for a guaranteed interest rate to ensure the more than 800,000 North Carolinians who count on the fund would benefit from the move."

He wants to provide money to loan to the companies, which would be guaranteed by the US government. Most pension funds have very heavy investments in the affected financial stocks, so they are really trying to help themselves.

It's all about what he wants, let the contributors decide, not the politician. Any reasonable person gets that.

[MikeC]

another PoV, in line with the notion that any bailout worthy of support should put the endangered homeowner first, not the bankers who swindled them.:

The Birk Economic Recovery Plan

I'm against the $85,000,000,000.00 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child.

So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free. So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.
A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage - housing crisis solved.
Repay college loans - what a great boost to new grads
Put away money for college - it'll be there
Save in a bank - create money to loan to entrepreneurs.
Buy a new car - create jobs
Invest in the market - capital drives growth
Pay for your parent's medical insurance - health care improves
Enable Deadbeat Dads to come clean - or else

Remember this is for every adult U S Citizen 18+ including the folks
who lost their jobs at Lehman Brothers and every other company
that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 ( "vote buy" ) economic incentive that is being proposed by one of our candidates for President.

If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG - liquidate it.
Sell off its parts.
Let American General go back to being American General.
Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can "never work."

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC .

And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

Kindest personal regards,

Birk

T. J. Birkenmeier, A Creative Guy & Citizen of the Republic

PS: Feel free to pass this along to your pals as it's either good for a laugh or a tear or a very sobering thought on how to best use $85 Billion!!

P.P.S. Even if the number is 250 million adults, the share is $340,000 gross each!!!

($238,000 net after that estimated 30% federal tax rate)

Your state and local governments will want "their share" too, but think of all the pre-financed public works projects that could get done. More jobs!

Repave streets and upgrade utilities--that needs labor, and equipment and materials.

This is way better than "trickle-down" economics--it would be "tidal wave" economics!

Make sure the $25 billion that goes right back to Uncle Sam gets used for debt reduction.

PPPS--I heard on the radio that the total of all recent and potential near-term bailouts may reach $500 billion. Put another way, half-a-trillion dollars. Or 500,000 billion!

I would exclude all big earning people (top sales, execs, biz dev folks) connected to the big, troubled financial houses and banks demanding bailout... EXCLUDE them! That increases the dividends to those without responsibility for the mess.

[NeilBlanchard]

Hi Mike,

I love the idea -- but his numbers are off by 1000X.

85,000,000,000 / 200,000,000 = $425

[MikeC]

Hi Mike,

I love the idea -- but his numbers are off by 1000X.

85,000,000,000 / 200,000,000 = $425

[kittle]

Mike -- very nice idea.

unfortunately i dont see people paying off stuff.
Given the current mentality i see it would be more along the lines of "OMG what knida house can i get with a $297,000 down payment!" -- and off they go to bankruptcy, yet again.

Me personally - yeah id pay off the mortage.



.................. but not with only $425 :/

[yefi]

So many times there was no direct connection between the loan officer and the institution that eventually ended up with the loan. FNMA/FRMAC were established by FDR in the New Deal to provide liquidity to the mortgage loan market by purchasing them on the secondary market, but they apparently did not have enough controls in place (in 1968, the government freed Fannie Mae from its control and privatized it with a Congressional charter).

Correct me if I am wrong, but wasn't one piece in the jigsaw the credit rating agencies like Moodys and Poors, who gave these mortgage-backed securities from Fannie Mae and Freddie Mac triple-A ratings when they deserved nothing of the sort?

One reason for that, I believe, was the perception that they were government endorsed, but another was that they were percieved as "too big to fail". For the latter, it seems immaterial if FDR established them or private equity. What counted was the market dominance and how that, unfortunately for us, affected the risk-taking strategies of investors.

[m0002a]

Correct me if I am wrong, but wasn't one piece in the jigsaw the credit rating agencies like Moodys and Poors, who gave these mortgage-backed securities from Fannie Mae and Freddie Mac triple-A ratings when they deserved nothing of the sort?

One reason for that, I believe, was the perception that they were government endorsed, but another was that they were percieved as "too big to fail". For the latter, it seems immaterial if FDR established them or private equity. What counted was the market dominance and how that, unfortunately for us, affected the risk-taking strategies of investors.

Good Point. They probably bear part of the blame also. A lot of people got caught up in the real estate craze of the last 10 years, fueled n part by by low interest rates, and they just thought the prices would go up forever (making foreclosures not a big deal if they happened).