Intentional defaulting, not subprime mortgage is the problem

[Anonymous]

People keep saying how the taxpayer gets screwed, but if banks repay the bailout money, haven’t they effectively absorbed the fullimpact of a default?

I probably just don’t understand, but I would appreciate it if someone would enlighten me.

[davelj]

[quote=jpinpb][quote=XBoxBoy]
If you want to cure the current problem, you need to allow the foreclosures to happen. If you want to keep this problem from happening in the future, you better make sure that banks only make loans to people that can/will pay them back.
[/quote]

Some banks are not suffering from any of this. Remember, the taxpayers are bailing them out. It’s a win-win for them. Give bad loan. If they make payments, bank wins. If they don’t make payments, government gives them money. Bank subsidy.

They won’t care much if this problem happens again (and I can see it happening again, maybe in our lifetime). No one will have learned from this b/c no one suffered but the taxpayers.[/quote]

The only banks who are “not suffering from any of this” are the banks who didn’t get involved in subprime lending, construction lending, or absurd CRE lending. Every bank that has had any involvement in the aforementioned areas has suffered. Perhaps not as much as you’d like, but they’ve suffered. The KBW Bank Index is down 70% from its peak. Trust me, shareholders of large banks have suffered a plenty.

And the preferred and bond holders of banks that have failed have been wiped out as well. And this is going to continue for a few years on a large scale. Now, perhaps the bond holders of some of the large banks should have taken haircuts as well, but certainly there’s been some degree of suffering on the fixed income side as well. Moreover, there have been hundreds of thousands of folks laid off in the banking industry.

My point is that while you may believe that the suffering among bank management/shareholders/other investors/etc. hasn’t been enough – and that’s a debatable point – more than just taxpayers have suffered from this banking debacle. That should be pretty clear at this point.

[davelj]

[quote=jpinpb][quote=XBoxBoy]
If you want to cure the current problem, you need to allow the foreclosures to happen. If you want to keep this problem from happening in the future, you better make sure that banks only make loans to people that can/will pay them back.
[/quote]

Some banks are not suffering from any of this. Remember, the taxpayers are bailing them out. It’s a win-win for them. Give bad loan. If they make payments, bank wins. If they don’t make payments, government gives them money. Bank subsidy.

They won’t care much if this problem happens again (and I can see it happening again, maybe in our lifetime). No one will have learned from this b/c no one suffered but the taxpayers.[/quote]

The only banks who are “not suffering from any of this” are the banks who didn’t get involved in subprime lending, construction lending, or absurd CRE lending. Every bank that has had any involvement in the aforementioned areas has suffered. Perhaps not as much as you’d like, but they’ve suffered. The KBW Bank Index is down 70% from its peak. Trust me, shareholders of large banks have suffered a plenty.

And the preferred and bond holders of banks that have failed have been wiped out as well. And this is going to continue for a few years on a large scale. Now, perhaps the bond holders of some of the large banks should have taken haircuts as well, but certainly there’s been some degree of suffering on the fixed income side as well. Moreover, there have been hundreds of thousands of folks laid off in the banking industry.

My point is that while you may believe that the suffering among bank management/shareholders/other investors/etc. hasn’t been enough – and that’s a debatable point – more than just taxpayers have suffered from this banking debacle. That should be pretty clear at this point.

[davelj]

[quote=jpinpb][quote=XBoxBoy]
If you want to cure the current problem, you need to allow the foreclosures to happen. If you want to keep this problem from happening in the future, you better make sure that banks only make loans to people that can/will pay them back.
[/quote]

Some banks are not suffering from any of this. Remember, the taxpayers are bailing them out. It’s a win-win for them. Give bad loan. If they make payments, bank wins. If they don’t make payments, government gives them money. Bank subsidy.

They won’t care much if this problem happens again (and I can see it happening again, maybe in our lifetime). No one will have learned from this b/c no one suffered but the taxpayers.[/quote]

The only banks who are “not suffering from any of this” are the banks who didn’t get involved in subprime lending, construction lending, or absurd CRE lending. Every bank that has had any involvement in the aforementioned areas has suffered. Perhaps not as much as you’d like, but they’ve suffered. The KBW Bank Index is down 70% from its peak. Trust me, shareholders of large banks have suffered a plenty.

And the preferred and bond holders of banks that have failed have been wiped out as well. And this is going to continue for a few years on a large scale. Now, perhaps the bond holders of some of the large banks should have taken haircuts as well, but certainly there’s been some degree of suffering on the fixed income side as well. Moreover, there have been hundreds of thousands of folks laid off in the banking industry.

My point is that while you may believe that the suffering among bank management/shareholders/other investors/etc. hasn’t been enough – and that’s a debatable point – more than just taxpayers have suffered from this banking debacle. That should be pretty clear at this point.

[davelj]

[quote=jpinpb][quote=XBoxBoy]
If you want to cure the current problem, you need to allow the foreclosures to happen. If you want to keep this problem from happening in the future, you better make sure that banks only make loans to people that can/will pay them back.
[/quote]

Some banks are not suffering from any of this. Remember, the taxpayers are bailing them out. It’s a win-win for them. Give bad loan. If they make payments, bank wins. If they don’t make payments, government gives them money. Bank subsidy.

They won’t care much if this problem happens again (and I can see it happening again, maybe in our lifetime). No one will have learned from this b/c no one suffered but the taxpayers.[/quote]

The only banks who are “not suffering from any of this” are the banks who didn’t get involved in subprime lending, construction lending, or absurd CRE lending. Every bank that has had any involvement in the aforementioned areas has suffered. Perhaps not as much as you’d like, but they’ve suffered. The KBW Bank Index is down 70% from its peak. Trust me, shareholders of large banks have suffered a plenty.

And the preferred and bond holders of banks that have failed have been wiped out as well. And this is going to continue for a few years on a large scale. Now, perhaps the bond holders of some of the large banks should have taken haircuts as well, but certainly there’s been some degree of suffering on the fixed income side as well. Moreover, there have been hundreds of thousands of folks laid off in the banking industry.

My point is that while you may believe that the suffering among bank management/shareholders/other investors/etc. hasn’t been enough – and that’s a debatable point – more than just taxpayers have suffered from this banking debacle. That should be pretty clear at this point.

[davelj]

[quote=jpinpb][quote=XBoxBoy]
If you want to cure the current problem, you need to allow the foreclosures to happen. If you want to keep this problem from happening in the future, you better make sure that banks only make loans to people that can/will pay them back.
[/quote]

Some banks are not suffering from any of this. Remember, the taxpayers are bailing them out. It’s a win-win for them. Give bad loan. If they make payments, bank wins. If they don’t make payments, government gives them money. Bank subsidy.

They won’t care much if this problem happens again (and I can see it happening again, maybe in our lifetime). No one will have learned from this b/c no one suffered but the taxpayers.[/quote]

The only banks who are “not suffering from any of this” are the banks who didn’t get involved in subprime lending, construction lending, or absurd CRE lending. Every bank that has had any involvement in the aforementioned areas has suffered. Perhaps not as much as you’d like, but they’ve suffered. The KBW Bank Index is down 70% from its peak. Trust me, shareholders of large banks have suffered a plenty.

And the preferred and bond holders of banks that have failed have been wiped out as well. And this is going to continue for a few years on a large scale. Now, perhaps the bond holders of some of the large banks should have taken haircuts as well, but certainly there’s been some degree of suffering on the fixed income side as well. Moreover, there have been hundreds of thousands of folks laid off in the banking industry.

My point is that while you may believe that the suffering among bank management/shareholders/other investors/etc. hasn’t been enough – and that’s a debatable point – more than just taxpayers have suffered from this banking debacle. That should be pretty clear at this point.

[jpinpb]

After reading all about Goldman Sachs, I question the suffering. Sure, if you’re a teller and got laid off, you’re suffering. If you invested in bank stocks, as an individuals or cities, whatever, etc, you’re suffering. But unless a bank closed it’s doors like Lehman, and went under, I imagine that it hasn’t happened b/c of taxpayer assistance. But maybe I’m completely misinterpreting where the bailout money went.

From Kelly’s story, it doesn’t appear that loan mods are rampant. Banks are not foreclosing on all NODs and selling to public. I’m sorry. I’m not seeing suffering in relation to the vast amount of outrageous loans that have occurred. There is no lesson that will be learned. In fact, the opposite. People have learned that if they fuck up, help will be there for them. I say for the most part, generally. There are always the exceptions.

[jpinpb]

After reading all about Goldman Sachs, I question the suffering. Sure, if you’re a teller and got laid off, you’re suffering. If you invested in bank stocks, as an individuals or cities, whatever, etc, you’re suffering. But unless a bank closed it’s doors like Lehman, and went under, I imagine that it hasn’t happened b/c of taxpayer assistance. But maybe I’m completely misinterpreting where the bailout money went.

From Kelly’s story, it doesn’t appear that loan mods are rampant. Banks are not foreclosing on all NODs and selling to public. I’m sorry. I’m not seeing suffering in relation to the vast amount of outrageous loans that have occurred. There is no lesson that will be learned. In fact, the opposite. People have learned that if they fuck up, help will be there for them. I say for the most part, generally. There are always the exceptions.

[jpinpb]

After reading all about Goldman Sachs, I question the suffering. Sure, if you’re a teller and got laid off, you’re suffering. If you invested in bank stocks, as an individuals or cities, whatever, etc, you’re suffering. But unless a bank closed it’s doors like Lehman, and went under, I imagine that it hasn’t happened b/c of taxpayer assistance. But maybe I’m completely misinterpreting where the bailout money went.

From Kelly’s story, it doesn’t appear that loan mods are rampant. Banks are not foreclosing on all NODs and selling to public. I’m sorry. I’m not seeing suffering in relation to the vast amount of outrageous loans that have occurred. There is no lesson that will be learned. In fact, the opposite. People have learned that if they fuck up, help will be there for them. I say for the most part, generally. There are always the exceptions.

[jpinpb]

After reading all about Goldman Sachs, I question the suffering. Sure, if you’re a teller and got laid off, you’re suffering. If you invested in bank stocks, as an individuals or cities, whatever, etc, you’re suffering. But unless a bank closed it’s doors like Lehman, and went under, I imagine that it hasn’t happened b/c of taxpayer assistance. But maybe I’m completely misinterpreting where the bailout money went.

From Kelly’s story, it doesn’t appear that loan mods are rampant. Banks are not foreclosing on all NODs and selling to public. I’m sorry. I’m not seeing suffering in relation to the vast amount of outrageous loans that have occurred. There is no lesson that will be learned. In fact, the opposite. People have learned that if they fuck up, help will be there for them. I say for the most part, generally. There are always the exceptions.

[jpinpb]

After reading all about Goldman Sachs, I question the suffering. Sure, if you’re a teller and got laid off, you’re suffering. If you invested in bank stocks, as an individuals or cities, whatever, etc, you’re suffering. But unless a bank closed it’s doors like Lehman, and went under, I imagine that it hasn’t happened b/c of taxpayer assistance. But maybe I’m completely misinterpreting where the bailout money went.

From Kelly’s story, it doesn’t appear that loan mods are rampant. Banks are not foreclosing on all NODs and selling to public. I’m sorry. I’m not seeing suffering in relation to the vast amount of outrageous loans that have occurred. There is no lesson that will be learned. In fact, the opposite. People have learned that if they fuck up, help will be there for them. I say for the most part, generally. There are always the exceptions.

[donaldduckmoore]

toddt, that is exactly right. Now that the banking system appears to be stable a bit and hopefully lending will continue. The current administration will (hopefully) put more effort to regulate the financial system. The remaining root of the housing problem will be intentional default and I hope that the government will do more to suppress this behavior although it may not be politically popular.

[donaldduckmoore]

toddt, that is exactly right. Now that the banking system appears to be stable a bit and hopefully lending will continue. The current administration will (hopefully) put more effort to regulate the financial system. The remaining root of the housing problem will be intentional default and I hope that the government will do more to suppress this behavior although it may not be politically popular.

[donaldduckmoore]

toddt, that is exactly right. Now that the banking system appears to be stable a bit and hopefully lending will continue. The current administration will (hopefully) put more effort to regulate the financial system. The remaining root of the housing problem will be intentional default and I hope that the government will do more to suppress this behavior although it may not be politically popular.

[donaldduckmoore]

toddt, that is exactly right. Now that the banking system appears to be stable a bit and hopefully lending will continue. The current administration will (hopefully) put more effort to regulate the financial system. The remaining root of the housing problem will be intentional default and I hope that the government will do more to suppress this behavior although it may not be politically popular.

[Author]

Posts