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Coronita.
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August 17, 2007 at 5:42 PM #77387August 17, 2007 at 5:42 PM #77391
drunkle
Participanthow is a bailout contributing to stability? gaming the system means more and more people who play by the rules becoming discontent. stability is only achieved by making the masses content, tilting things against the masses only results in political upheaval.
a meltdown in the *current* financial system means there will be chaos. people will get hurt. but as it is, people are still getting hurt anyway, it’s just a matter of who you consider are “people”.
things are apparently quite fubar. saving the current system in order to perpetuate a fubar system is a farce. seriously, what is the long term plan? what is the remediation? there is none, only day to day hand to mouth. keep things going until i get mine, then off to the caymans.
the op is merely having a revelation about How Things Work. he certainly wasn’t plotting to get rich on the situation. but, there are plenty of examples in the past of people who did indeed get rich off the misery of others. it’s a fundamental strategy, buy low sell high. be prepared and take your opportunities as they come. in the end, if the system fails, it wont matter either way. but in the face of adversity, do you damn best. lemonade, glass half full, etc.
hell, the only potential solution to the crisis is indeed betting against the house. inflation will kill your mattress backed securities, stock/bond markets around the globe are in distress, commodities are just as vulnerable not to mention, nobody actually buys physical gold…
August 17, 2007 at 5:42 PM #77414ucodegen
Participant401Ks
I have to agree with FormerSanDiegan. It is much better to have the money taken out pre-tax. It drops your taxable income. It removes the income from AGI calculations entirely. This means that if your deductions are being limited for any reason, you still get the tax reduction/effective deduction.Medical spending account:
This allows you to pay pre-tax and is not subject to the 7% of AGI minimum threshold on schedule A of the 1040.August 17, 2007 at 5:42 PM #77417Participanthow is a bailout contributing to stability? gaming the system means more and more people who play by the rules becoming discontent. stability is only achieved by making the masses content, tilting things against the masses only results in political upheaval.
a meltdown in the *current* financial system means there will be chaos. people will get hurt. but as it is, people are still getting hurt anyway, it’s just a matter of who you consider are “people”.
things are apparently quite fubar. saving the current system in order to perpetuate a fubar system is a farce. seriously, what is the long term plan? what is the remediation? there is none, only day to day hand to mouth. keep things going until i get mine, then off to the caymans.
the op is merely having a revelation about How Things Work. he certainly wasn’t plotting to get rich on the situation. but, there are plenty of examples in the past of people who did indeed get rich off the misery of others. it’s a fundamental strategy, buy low sell high. be prepared and take your opportunities as they come. in the end, if the system fails, it wont matter either way. but in the face of adversity, do you damn best. lemonade, glass half full, etc.
hell, the only potential solution to the crisis is indeed betting against the house. inflation will kill your mattress backed securities, stock/bond markets around the globe are in distress, commodities are just as vulnerable not to mention, nobody actually buys physical gold…
August 17, 2007 at 6:05 PM #77279ParticipantI don’t think you’ll have to worry about ‘stability’. This fix is only temporary. My personal opinion is that Bernanke is trying to handle the economy at too fine a grain level. Either way, there is a lot of equity to balance out. You can do it by inflating everything else up to it.. or deflating the over inflated asset.
Deflating the inflated asset:
This can cause ripples where said assets were levered to purchase other assets. It becomes a house of cards issue. It will take down other assets that are fairly valued in the process as people have to liquidate to cover. Innocents get hurt on this one through the indirect effects (as well as the complicit).Inflating everything else than the overpriced asset:
Biggest problem here is keeping wages and tax structures adjusted during the inflation. The other thing is to stay out of cash during this period because the value of the currency gets deflated. It has the advantages of also devaluing accumulated imbalance of trade. The complicit in this scenario often have their ‘proceeds’ devalued.I think the real solution is to place mortgage brokers and RE brokers/agents under similar guidelines as Stock brokers. Houses and stocks are assets that can be invested in. Margin requirements are required for stock. Likewise, margin requirements (LTV) should be required in buying a house. Disclosure requirements exist for stock, they should exist for the state of housing. Stock brokers have to be very careful about pushing a stock as an investment (in particular if they don’t have a CFA/CFP cert) because it can cause them to lose their license. RE brokers should be regulated in the same manner.
In terms of getting the guilty.. this is going to be hard. There are too many. The underlying problem is that they guilty sold off the securities.. a long time ago. They mis-represented the condition of these securities. With the CDOs/MBS(s) being devalued, it is harming innocents instead of the guilty (who are now looking for the next scam) Basically, when a CDO/MBS’s risk factors have been misrepresented, the investor in the security can force the originator to buy it back at face value (as opposed to real value). This has been happening, and is causing the bankruptcy of many of the sub-prime lenders. The problem is that once a sub-prime has gone under, the other people who are trying to force the buyback for misrepresentation, can’t. The company no longer exists.
NOTE: The reduction of interest rates is not really a bailout. The guilty have already flown the coop. I anticipated a drop about this time.. but anticipate further tightening down the road. Bernanke is in a bind. He has to prevent a total collapse, while getting deficit spending financed for Congress and preventing inflation. The only tools he has to do this are; the prime rate, fractional reserve rates and money supply.
August 17, 2007 at 6:05 PM #77400ParticipantI don’t think you’ll have to worry about ‘stability’. This fix is only temporary. My personal opinion is that Bernanke is trying to handle the economy at too fine a grain level. Either way, there is a lot of equity to balance out. You can do it by inflating everything else up to it.. or deflating the over inflated asset.
Deflating the inflated asset:
This can cause ripples where said assets were levered to purchase other assets. It becomes a house of cards issue. It will take down other assets that are fairly valued in the process as people have to liquidate to cover. Innocents get hurt on this one through the indirect effects (as well as the complicit).Inflating everything else than the overpriced asset:
Biggest problem here is keeping wages and tax structures adjusted during the inflation. The other thing is to stay out of cash during this period because the value of the currency gets deflated. It has the advantages of also devaluing accumulated imbalance of trade. The complicit in this scenario often have their ‘proceeds’ devalued.I think the real solution is to place mortgage brokers and RE brokers/agents under similar guidelines as Stock brokers. Houses and stocks are assets that can be invested in. Margin requirements are required for stock. Likewise, margin requirements (LTV) should be required in buying a house. Disclosure requirements exist for stock, they should exist for the state of housing. Stock brokers have to be very careful about pushing a stock as an investment (in particular if they don’t have a CFA/CFP cert) because it can cause them to lose their license. RE brokers should be regulated in the same manner.
In terms of getting the guilty.. this is going to be hard. There are too many. The underlying problem is that they guilty sold off the securities.. a long time ago. They mis-represented the condition of these securities. With the CDOs/MBS(s) being devalued, it is harming innocents instead of the guilty (who are now looking for the next scam) Basically, when a CDO/MBS’s risk factors have been misrepresented, the investor in the security can force the originator to buy it back at face value (as opposed to real value). This has been happening, and is causing the bankruptcy of many of the sub-prime lenders. The problem is that once a sub-prime has gone under, the other people who are trying to force the buyback for misrepresentation, can’t. The company no longer exists.
NOTE: The reduction of interest rates is not really a bailout. The guilty have already flown the coop. I anticipated a drop about this time.. but anticipate further tightening down the road. Bernanke is in a bind. He has to prevent a total collapse, while getting deficit spending financed for Congress and preventing inflation. The only tools he has to do this are; the prime rate, fractional reserve rates and money supply.
August 17, 2007 at 6:05 PM #77426ParticipantI don’t think you’ll have to worry about ‘stability’. This fix is only temporary. My personal opinion is that Bernanke is trying to handle the economy at too fine a grain level. Either way, there is a lot of equity to balance out. You can do it by inflating everything else up to it.. or deflating the over inflated asset.
Deflating the inflated asset:
This can cause ripples where said assets were levered to purchase other assets. It becomes a house of cards issue. It will take down other assets that are fairly valued in the process as people have to liquidate to cover. Innocents get hurt on this one through the indirect effects (as well as the complicit).Inflating everything else than the overpriced asset:
Biggest problem here is keeping wages and tax structures adjusted during the inflation. The other thing is to stay out of cash during this period because the value of the currency gets deflated. It has the advantages of also devaluing accumulated imbalance of trade. The complicit in this scenario often have their ‘proceeds’ devalued.I think the real solution is to place mortgage brokers and RE brokers/agents under similar guidelines as Stock brokers. Houses and stocks are assets that can be invested in. Margin requirements are required for stock. Likewise, margin requirements (LTV) should be required in buying a house. Disclosure requirements exist for stock, they should exist for the state of housing. Stock brokers have to be very careful about pushing a stock as an investment (in particular if they don’t have a CFA/CFP cert) because it can cause them to lose their license. RE brokers should be regulated in the same manner.
In terms of getting the guilty.. this is going to be hard. There are too many. The underlying problem is that they guilty sold off the securities.. a long time ago. They mis-represented the condition of these securities. With the CDOs/MBS(s) being devalued, it is harming innocents instead of the guilty (who are now looking for the next scam) Basically, when a CDO/MBS’s risk factors have been misrepresented, the investor in the security can force the originator to buy it back at face value (as opposed to real value). This has been happening, and is causing the bankruptcy of many of the sub-prime lenders. The problem is that once a sub-prime has gone under, the other people who are trying to force the buyback for misrepresentation, can’t. The company no longer exists.
NOTE: The reduction of interest rates is not really a bailout. The guilty have already flown the coop. I anticipated a drop about this time.. but anticipate further tightening down the road. Bernanke is in a bind. He has to prevent a total collapse, while getting deficit spending financed for Congress and preventing inflation. The only tools he has to do this are; the prime rate, fractional reserve rates and money supply.
August 17, 2007 at 6:21 PM #77297Pasadena Broker
ParticipantJesus H. Christ!
Thank you for posting that Chris. Whenever I’ve read posts regarding ‘swooping up cheap property’ it makes me smirk. It’s all hubris.
And for the people that are wishing for our economic system to tank, doom/gloom, peak oil, water, oxygen guys/gals, what gives? What affects your neighbors/neighborhood will affect you, no matter how financially impervious you might think you are.
August 17, 2007 at 6:21 PM #77418ParticipantJesus H. Christ!
Thank you for posting that Chris. Whenever I’ve read posts regarding ‘swooping up cheap property’ it makes me smirk. It’s all hubris.
And for the people that are wishing for our economic system to tank, doom/gloom, peak oil, water, oxygen guys/gals, what gives? What affects your neighbors/neighborhood will affect you, no matter how financially impervious you might think you are.
August 17, 2007 at 6:21 PM #77444ParticipantJesus H. Christ!
Thank you for posting that Chris. Whenever I’ve read posts regarding ‘swooping up cheap property’ it makes me smirk. It’s all hubris.
And for the people that are wishing for our economic system to tank, doom/gloom, peak oil, water, oxygen guys/gals, what gives? What affects your neighbors/neighborhood will affect you, no matter how financially impervious you might think you are.
August 17, 2007 at 6:30 PM #77300Participantuco:
i’m not really concerned about political or financial stability at this point, i do believe the economic systems of “developed” countries are resilient enough. japan has yet to dissolve, right? but in the context of chris’ post, i didn’t agree that his tone was necessary with regards to the op.
as to “stability”, he *is* in a far better position than i to prognosticate on the situation, so if a “total collapse” is in the cards, i will take his word for it.
as a layman, i agree with everything else you wrote. to add, i’m not as concerned about “getting the guilty” as they were certainly acting within the bounds of the law. enough so, anyway, that it wasn’t a big deal at the time. but planning for the future… as you say, homes are assets. home builders to re agents, we’ve had enough of unregulated “free trade”.
August 17, 2007 at 6:30 PM #77421Participantuco:
i’m not really concerned about political or financial stability at this point, i do believe the economic systems of “developed” countries are resilient enough. japan has yet to dissolve, right? but in the context of chris’ post, i didn’t agree that his tone was necessary with regards to the op.
as to “stability”, he *is* in a far better position than i to prognosticate on the situation, so if a “total collapse” is in the cards, i will take his word for it.
as a layman, i agree with everything else you wrote. to add, i’m not as concerned about “getting the guilty” as they were certainly acting within the bounds of the law. enough so, anyway, that it wasn’t a big deal at the time. but planning for the future… as you say, homes are assets. home builders to re agents, we’ve had enough of unregulated “free trade”.
August 17, 2007 at 6:30 PM #77447Participantuco:
i’m not really concerned about political or financial stability at this point, i do believe the economic systems of “developed” countries are resilient enough. japan has yet to dissolve, right? but in the context of chris’ post, i didn’t agree that his tone was necessary with regards to the op.
as to “stability”, he *is* in a far better position than i to prognosticate on the situation, so if a “total collapse” is in the cards, i will take his word for it.
as a layman, i agree with everything else you wrote. to add, i’m not as concerned about “getting the guilty” as they were certainly acting within the bounds of the law. enough so, anyway, that it wasn’t a big deal at the time. but planning for the future… as you say, homes are assets. home builders to re agents, we’ve had enough of unregulated “free trade”.
August 17, 2007 at 6:33 PM #77303Participant“Jesus H. Christ!
Thank you for posting that Chris. Whenever I’ve read posts regarding ‘swooping up cheap property’ it makes me smirk. It’s all hubris.
And for the people that are wishing for our economic system to tank, doom/gloom, peak oil, water, oxygen guys/gals, what gives? What affects your neighbors/neighborhood will affect you, no matter how financially impervious you might think you are.”
i’m pretty sure chris is no pollyanna.
August 17, 2007 at 6:33 PM #77424Participant“Jesus H. Christ!
Thank you for posting that Chris. Whenever I’ve read posts regarding ‘swooping up cheap property’ it makes me smirk. It’s all hubris.
And for the people that are wishing for our economic system to tank, doom/gloom, peak oil, water, oxygen guys/gals, what gives? What affects your neighbors/neighborhood will affect you, no matter how financially impervious you might think you are.”
i’m pretty sure chris is no pollyanna.
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