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August 17, 2007 at 6:33 PM #77450August 17, 2007 at 7:15 PM #77318
davelj
ParticipantRegarding Chris’ comments…
Maybe I’m wrong, but I don’t think many people here actually want “financial armageddon.” Speaking for myself, I’d just like to see a recession, a cleansing of the system, so to speak. There have been some bad financial actors – Countrywide, WaMu, and lots of hedge funds – that NEED – I repeat NEED – to go out of business in order for our economy to function better in the future. This would lead to some financial pain and a recession, to be sure. But I don’t think anyone here – “think” being the operative word – is hoping for a depression. Maybe I’m wrong, but I think your assumption that people here want the world’s financial structures to collapse is incorrect. But, please, anyone feel free to correct me if I’m wrong.
A friend called me a couple of hours ago and told me what happened last night. Countrywide’s Mozilo, Sambol (President) and Sieracki (CFO) had a conference call last night with all eleven of their lenders and Janet Yellen, president of the San Francisco Fed. The asian markets were going apeshit and it looked like today was going to be a bloodbath. Yellen asked, “How can we help, outside of a Fed Funds rate cut?” The response was “lower the discount rate.” And so it was done. And here we are. I, along with many others, thought that maybe this Fed would be different, but clearly the Fed is still in the bailout business, plain and simple. Get used to it.
August 17, 2007 at 7:15 PM #77439davelj
ParticipantRegarding Chris’ comments…
Maybe I’m wrong, but I don’t think many people here actually want “financial armageddon.” Speaking for myself, I’d just like to see a recession, a cleansing of the system, so to speak. There have been some bad financial actors – Countrywide, WaMu, and lots of hedge funds – that NEED – I repeat NEED – to go out of business in order for our economy to function better in the future. This would lead to some financial pain and a recession, to be sure. But I don’t think anyone here – “think” being the operative word – is hoping for a depression. Maybe I’m wrong, but I think your assumption that people here want the world’s financial structures to collapse is incorrect. But, please, anyone feel free to correct me if I’m wrong.
A friend called me a couple of hours ago and told me what happened last night. Countrywide’s Mozilo, Sambol (President) and Sieracki (CFO) had a conference call last night with all eleven of their lenders and Janet Yellen, president of the San Francisco Fed. The asian markets were going apeshit and it looked like today was going to be a bloodbath. Yellen asked, “How can we help, outside of a Fed Funds rate cut?” The response was “lower the discount rate.” And so it was done. And here we are. I, along with many others, thought that maybe this Fed would be different, but clearly the Fed is still in the bailout business, plain and simple. Get used to it.
August 17, 2007 at 7:15 PM #77465davelj
ParticipantRegarding Chris’ comments…
Maybe I’m wrong, but I don’t think many people here actually want “financial armageddon.” Speaking for myself, I’d just like to see a recession, a cleansing of the system, so to speak. There have been some bad financial actors – Countrywide, WaMu, and lots of hedge funds – that NEED – I repeat NEED – to go out of business in order for our economy to function better in the future. This would lead to some financial pain and a recession, to be sure. But I don’t think anyone here – “think” being the operative word – is hoping for a depression. Maybe I’m wrong, but I think your assumption that people here want the world’s financial structures to collapse is incorrect. But, please, anyone feel free to correct me if I’m wrong.
A friend called me a couple of hours ago and told me what happened last night. Countrywide’s Mozilo, Sambol (President) and Sieracki (CFO) had a conference call last night with all eleven of their lenders and Janet Yellen, president of the San Francisco Fed. The asian markets were going apeshit and it looked like today was going to be a bloodbath. Yellen asked, “How can we help, outside of a Fed Funds rate cut?” The response was “lower the discount rate.” And so it was done. And here we are. I, along with many others, thought that maybe this Fed would be different, but clearly the Fed is still in the bailout business, plain and simple. Get used to it.
August 17, 2007 at 7:16 PM #77321temeculaguy
ParticipantChris is right on more than a few levels. Ben used his wd-40 can to keep the engine from seizing, he didn’t save the world. Even if there was a 100 pt basis drop of the fed funds rate (read interest rate drops a full percentage) it will not start the housing craziness again and will not keep housing prices from falling. Even if fannie and freddie raise the conforming limits, we will not have a 2005 flashback. The game has changed permanently back once again, the institutions that give out money have realized that giving money to people without verifying if they can pay it back, or setting them up with a payment that will jump beyond their means or letting them in without any skin (o down) doesn’t work for the lender. It can work in certain circumstances but as the dominant loan product, it will come back to bite the lender. The secondary market has lost their appetite for the higher risk product probably for the rest of this cycle until the next genration is in place or the memory of what crow tastes like fades from this one. The economy will not tank but the housing market in So Cal will still return to normal levels on schedule, regardless of what the interest rates are. This can all be explained using my friend Bob and his dating exploits. Bob hit a streak where he was quite successful picking up girls to the point that he stopped asking too many questions and stopped using personal protection. Life was good for a while until Bob caught something, fortunaltely for Bob it was curable but it frightened Bob and he changed his ways. Initially he stopped going out and swore off his hedonist lifestyle. Now Bob is back to his old ways, wiser and more cautious, he asks questions and is never without protection. The lenders will end up like Bob, they will get their liquidity and interest rates back but they won’t look at customers the same, the scare will bring back balance. Didn’t think I could make a comparative argument using STD’s and the financial markets, HAH.
August 17, 2007 at 7:16 PM #77442temeculaguy
ParticipantChris is right on more than a few levels. Ben used his wd-40 can to keep the engine from seizing, he didn’t save the world. Even if there was a 100 pt basis drop of the fed funds rate (read interest rate drops a full percentage) it will not start the housing craziness again and will not keep housing prices from falling. Even if fannie and freddie raise the conforming limits, we will not have a 2005 flashback. The game has changed permanently back once again, the institutions that give out money have realized that giving money to people without verifying if they can pay it back, or setting them up with a payment that will jump beyond their means or letting them in without any skin (o down) doesn’t work for the lender. It can work in certain circumstances but as the dominant loan product, it will come back to bite the lender. The secondary market has lost their appetite for the higher risk product probably for the rest of this cycle until the next genration is in place or the memory of what crow tastes like fades from this one. The economy will not tank but the housing market in So Cal will still return to normal levels on schedule, regardless of what the interest rates are. This can all be explained using my friend Bob and his dating exploits. Bob hit a streak where he was quite successful picking up girls to the point that he stopped asking too many questions and stopped using personal protection. Life was good for a while until Bob caught something, fortunaltely for Bob it was curable but it frightened Bob and he changed his ways. Initially he stopped going out and swore off his hedonist lifestyle. Now Bob is back to his old ways, wiser and more cautious, he asks questions and is never without protection. The lenders will end up like Bob, they will get their liquidity and interest rates back but they won’t look at customers the same, the scare will bring back balance. Didn’t think I could make a comparative argument using STD’s and the financial markets, HAH.
August 17, 2007 at 7:16 PM #77468temeculaguy
ParticipantChris is right on more than a few levels. Ben used his wd-40 can to keep the engine from seizing, he didn’t save the world. Even if there was a 100 pt basis drop of the fed funds rate (read interest rate drops a full percentage) it will not start the housing craziness again and will not keep housing prices from falling. Even if fannie and freddie raise the conforming limits, we will not have a 2005 flashback. The game has changed permanently back once again, the institutions that give out money have realized that giving money to people without verifying if they can pay it back, or setting them up with a payment that will jump beyond their means or letting them in without any skin (o down) doesn’t work for the lender. It can work in certain circumstances but as the dominant loan product, it will come back to bite the lender. The secondary market has lost their appetite for the higher risk product probably for the rest of this cycle until the next genration is in place or the memory of what crow tastes like fades from this one. The economy will not tank but the housing market in So Cal will still return to normal levels on schedule, regardless of what the interest rates are. This can all be explained using my friend Bob and his dating exploits. Bob hit a streak where he was quite successful picking up girls to the point that he stopped asking too many questions and stopped using personal protection. Life was good for a while until Bob caught something, fortunaltely for Bob it was curable but it frightened Bob and he changed his ways. Initially he stopped going out and swore off his hedonist lifestyle. Now Bob is back to his old ways, wiser and more cautious, he asks questions and is never without protection. The lenders will end up like Bob, they will get their liquidity and interest rates back but they won’t look at customers the same, the scare will bring back balance. Didn’t think I could make a comparative argument using STD’s and the financial markets, HAH.
August 17, 2007 at 7:17 PM #77324hipmatt
ParticipantChris S said:
I personally do not want to see people’s lives ruined who were tricked by dishonest people into the situations they are in... dude I can see you not wanting bad things to happen to all the FBs out there, but when you say that they were “tricked” into the situations that they are in… it makes you look like an idiot. Why are you so quick to forgive the lack of responsibility, research, common sense, and thriftiness that anyone who buys a home should have. Anyone who practices any one or two of the preceding traits could have avoided the “crisis” they are facing now.
Many of those who are currently struggling to make the 100% financed mortgage on their MCMansion are doing so due to greed, pride, and complete recklessness in regards to spending and the responsibilities that come with taking on debt.
If someone told you that you can afford a 500k home on 70k per year with 0 down, and you believed them … that’s not being tricked.. that many other things.
The problem is that these actions did help ruin things for those who are responsible in life with their money, and possibly for our childrens, and now with the fed preparing for an attempted bailout of the markets, so as to lessen the blow to those who risked the most, we may all pay in the form of higher inflation.
I don’t want our economic system to “tank”, but it would be nice to have an economic system where people are rewarded for saving money, housing prices appreciate, yet are stable and affordable, and food and energy doesn’t double in price every 4 years. It also wouldn’t hurt to see the most irresponsible banks/lenders/borrowers be taught a lesson.
August 17, 2007 at 7:17 PM #77445hipmatt
ParticipantChris S said:
I personally do not want to see people’s lives ruined who were tricked by dishonest people into the situations they are in... dude I can see you not wanting bad things to happen to all the FBs out there, but when you say that they were “tricked” into the situations that they are in… it makes you look like an idiot. Why are you so quick to forgive the lack of responsibility, research, common sense, and thriftiness that anyone who buys a home should have. Anyone who practices any one or two of the preceding traits could have avoided the “crisis” they are facing now.
Many of those who are currently struggling to make the 100% financed mortgage on their MCMansion are doing so due to greed, pride, and complete recklessness in regards to spending and the responsibilities that come with taking on debt.
If someone told you that you can afford a 500k home on 70k per year with 0 down, and you believed them … that’s not being tricked.. that many other things.
The problem is that these actions did help ruin things for those who are responsible in life with their money, and possibly for our childrens, and now with the fed preparing for an attempted bailout of the markets, so as to lessen the blow to those who risked the most, we may all pay in the form of higher inflation.
I don’t want our economic system to “tank”, but it would be nice to have an economic system where people are rewarded for saving money, housing prices appreciate, yet are stable and affordable, and food and energy doesn’t double in price every 4 years. It also wouldn’t hurt to see the most irresponsible banks/lenders/borrowers be taught a lesson.
August 17, 2007 at 7:17 PM #77471hipmatt
ParticipantChris S said:
I personally do not want to see people’s lives ruined who were tricked by dishonest people into the situations they are in... dude I can see you not wanting bad things to happen to all the FBs out there, but when you say that they were “tricked” into the situations that they are in… it makes you look like an idiot. Why are you so quick to forgive the lack of responsibility, research, common sense, and thriftiness that anyone who buys a home should have. Anyone who practices any one or two of the preceding traits could have avoided the “crisis” they are facing now.
Many of those who are currently struggling to make the 100% financed mortgage on their MCMansion are doing so due to greed, pride, and complete recklessness in regards to spending and the responsibilities that come with taking on debt.
If someone told you that you can afford a 500k home on 70k per year with 0 down, and you believed them … that’s not being tricked.. that many other things.
The problem is that these actions did help ruin things for those who are responsible in life with their money, and possibly for our childrens, and now with the fed preparing for an attempted bailout of the markets, so as to lessen the blow to those who risked the most, we may all pay in the form of higher inflation.
I don’t want our economic system to “tank”, but it would be nice to have an economic system where people are rewarded for saving money, housing prices appreciate, yet are stable and affordable, and food and energy doesn’t double in price every 4 years. It also wouldn’t hurt to see the most irresponsible banks/lenders/borrowers be taught a lesson.
August 17, 2007 at 7:54 PM #77330cashman
ParticipantPersonally, I don’t want financial Armegeddon or wish ruin upon anyone that doesn’t deserve it from their own foolishness or greed. But there is something obviously wrong with the market action these last couple of days. Let’s take Thursday, for example. Markets all over the world tanked big time. The US market was heavily down until the last hour of trade. Then, magically it recovered to almost flat line. There was definitely some intervention. Carry trades are unwinding like crazy, the asian markets crash even more on Friday, and what does our market do? Something stinks on Wall St. Again, I’m not wishing for the world to come to an end, but I do feel that markets should be allowed to run their course without artificial respiration. It’s only going to make the inevitable outcome that much more painful.
August 17, 2007 at 7:54 PM #77451cashman
ParticipantPersonally, I don’t want financial Armegeddon or wish ruin upon anyone that doesn’t deserve it from their own foolishness or greed. But there is something obviously wrong with the market action these last couple of days. Let’s take Thursday, for example. Markets all over the world tanked big time. The US market was heavily down until the last hour of trade. Then, magically it recovered to almost flat line. There was definitely some intervention. Carry trades are unwinding like crazy, the asian markets crash even more on Friday, and what does our market do? Something stinks on Wall St. Again, I’m not wishing for the world to come to an end, but I do feel that markets should be allowed to run their course without artificial respiration. It’s only going to make the inevitable outcome that much more painful.
August 17, 2007 at 7:54 PM #77477cashman
ParticipantPersonally, I don’t want financial Armegeddon or wish ruin upon anyone that doesn’t deserve it from their own foolishness or greed. But there is something obviously wrong with the market action these last couple of days. Let’s take Thursday, for example. Markets all over the world tanked big time. The US market was heavily down until the last hour of trade. Then, magically it recovered to almost flat line. There was definitely some intervention. Carry trades are unwinding like crazy, the asian markets crash even more on Friday, and what does our market do? Something stinks on Wall St. Again, I’m not wishing for the world to come to an end, but I do feel that markets should be allowed to run their course without artificial respiration. It’s only going to make the inevitable outcome that much more painful.
August 17, 2007 at 8:47 PM #77333one_muggle
ParticipantFormer,
I see your points, but they generally only apply if you do not manage your taxes.
Taking 401K contributions it off the top of income helps actually those who don’t itemize
Filing separately the limit is 7850 and joint is 10,700, so unless you came in under that for retirement, plus say daycare, you would have exceeded the standard deduction.
Since the 401k limit is 15.5k, and daycare, as you say, is more than 5k, it is very easy to hit that limit quick, especially if you are married filing jointly.
A family can easily have 15.5k for dad, 15.5k for mom, and 5k for junior(s), adding up to 36k, which is way over the standard w/o having a mortgage.Re Medical spending account claims –
They pay medical when you submit a claim and do not wait for all the deductions. If you use your entire election by February for example, they reimburse you the whole enchilada BEFORE they deduct from your paycheck.No, that’s not true, at least not for any health care deduction program I have seen (UniAccount and FedGov). One may put in a claim, but you are not reimbursed until the money comes in. I would really like to see a program that reimburses prior to getting funded–what is yours?
Yes, the dependent car portion reimbursements are held up until after deducted from your check. However, these are typically regular predicatble amounts that you have to spend for day care.
If they are regular and expected, as you say, then you can easily take the deduction at the beginning of the year when you fill out your W-4. You do not need to wait until the end of the tax year–unless you enjoy lending Uncle Sam money.
And, if for some reason you don’t use up either account–you still give up the money.My point was (and is) that if they really wanted to help the taxpayer, rather than help a little while pandering to the financial institution lobby, they would simply let you write it off.
It is simply wrong, in my book, for a family to put 31k into retirement, and 5k into daycare, but not get one dime closer to the standard deduction.ucodegen
It is much better to have the money taken out pre-tax. I agree, sort of (after all you can reduce your tax burden ahead of time with the W-4), but my issue is that it does not apply to your deduction limit–which was done on purpose, and that is my beef.-one muggle
August 17, 2007 at 8:47 PM #77454one_muggle
ParticipantFormer,
I see your points, but they generally only apply if you do not manage your taxes.
Taking 401K contributions it off the top of income helps actually those who don’t itemize
Filing separately the limit is 7850 and joint is 10,700, so unless you came in under that for retirement, plus say daycare, you would have exceeded the standard deduction.
Since the 401k limit is 15.5k, and daycare, as you say, is more than 5k, it is very easy to hit that limit quick, especially if you are married filing jointly.
A family can easily have 15.5k for dad, 15.5k for mom, and 5k for junior(s), adding up to 36k, which is way over the standard w/o having a mortgage.Re Medical spending account claims –
They pay medical when you submit a claim and do not wait for all the deductions. If you use your entire election by February for example, they reimburse you the whole enchilada BEFORE they deduct from your paycheck.No, that’s not true, at least not for any health care deduction program I have seen (UniAccount and FedGov). One may put in a claim, but you are not reimbursed until the money comes in. I would really like to see a program that reimburses prior to getting funded–what is yours?
Yes, the dependent car portion reimbursements are held up until after deducted from your check. However, these are typically regular predicatble amounts that you have to spend for day care.
If they are regular and expected, as you say, then you can easily take the deduction at the beginning of the year when you fill out your W-4. You do not need to wait until the end of the tax year–unless you enjoy lending Uncle Sam money.
And, if for some reason you don’t use up either account–you still give up the money.My point was (and is) that if they really wanted to help the taxpayer, rather than help a little while pandering to the financial institution lobby, they would simply let you write it off.
It is simply wrong, in my book, for a family to put 31k into retirement, and 5k into daycare, but not get one dime closer to the standard deduction.ucodegen
It is much better to have the money taken out pre-tax. I agree, sort of (after all you can reduce your tax burden ahead of time with the W-4), but my issue is that it does not apply to your deduction limit–which was done on purpose, and that is my beef.-one muggle
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