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ParticipantThe goal of this bailout isn’t to stabilize anything, it’s to transfer tax dollars to banks and hedge funds so that they’re not penalized for making and purchasing bad loans. See sdrealtor’s “golden rule”, above. And as far as having “enough money”, the US has an infinite amount of money — at least according to our Vice President. I’m sure many of our senators and representatives feel the same way…
As for what this portends for the housing market, I think you’re right, it will prolong the ridiculousness. We might even find ourselves in a similar situation to the Netherlands, where the housing bubble continues to grow with each additional government intervention and bailout. A lot of Japan’s financial troubles in the 90s were caused by government bailouts of banks that had made bad loans, if I remember correctly. Maybe something similar will happen here.
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ParticipantThis is a payout to the banks and hedge funds disguised as a giveaway to middle-class “homeowners”. What the banks and hedges want is to adjust the mortgages so that the victims can continue to pay — and they want the government to kick in the difference. The spin is that this benefits the “homeowners” when in reality it will just extend their misery. The only real beneficiaries are the banks and the hedges. Both political parties win — the dems are seen as being kind and caring and helping people in need and the repubs will get angry at the handout and rail about democratic waste and government interference in the free market. Both sides miss the real crime which is that the banks and hedges are getting rich off of your money. A poster earlier compared this scheme to 3-card monty, and that’s a good analogy. Everyone is watching the moving cups and missing what’s really happening. A quick look at Charles Schumer’s top donors will tell you who’s really behind this (I think DrChaos posted that either here or in another thread).
Someone earlier mentioned that there was no bailout when Enron went belly-up. That’s not entirely true — many pension funds held Enron stock and these funds are backed by the government PBGC, so when the pension funds get in trouble it’s your tax dollars that will bail them out. What you are witnessing is an unprecedented transfer of wealth from the poor and middle classes to a tiny group of super-wealthy people at the top. These stories about borrowers in trouble and bailouts to help them are all designed to hide the real truth from you.
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ParticipantWhen winter comes you will be able to tell the ants from the grasshoppers. Until then you’ve really got no idea. In this land of easy credit, you can’t tell how much money someone has by looking at them, their house, or their car. All you can see is how much they’re spending…
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ParticipantHeads up Vitaly — looks like partypup is a prime port-scanning target. Hell man, with a salary like that he won’t even notice if you ACH $80K or so out of one of his accounts.
partypup, I hope you are behind a good firewall or Vitaly from Kiev is gonna buy himself a nice little Black Sea villa with some of that dough you’re so proud of.
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ParticipantI agree with Andy, PS, and others — the consumption hamster wheel is spinning faster and faster and Joe Sixpack’s little legs are working harder and harder to keep up. I followed that link PS posted, which is interesting and informative, but check out the author’s blog which has posts from many CPAs and CFPs from around the country.
My guess is that birds of a feather flock together – most of the folks on this board are financially responsible and thus have financially responsible friends so we don’t see the real situation like the CFPs and CPAs would. My mom worked at a bank in the 90s processing loan apps and she always told me that I would be shocked if I could see how bad most people’s financial situations really were.
April 5, 2007 at 9:33 AM in reply to: Some housing market newspaper clippings from the last Iraq war #49289blahblahblah
ParticipantThat’s kinda funny. At least Clinton wanted fair trade.
Free trade with a totalitarian communist country that has no respect for human rights, a country that uses slave labor, a country that killed peaceful protesters en masse at Tianamen? Yeah, Clinton was a big friend to democracy and human rights.
Anyway, my point is that by moving so much of our industrial base to China we have allowed the Chinese to grow their economy and now they are beginning to purchase and drive cars in large numbers. The original complaint in this thread was about the price of oil — increased Chinese demand is a bigger component to this than anything Bush has done. I’m no fan of Bush of course, but I don’t like to see him blamed for things he has no control over.
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ParticipantHahaha, yeah maybe we should all post that we’re in financial trouble so they won’t bother with us! I spent all of my HELOC money on jet-skis and plasma TVs, I have an $800K toxic voodoo mortgage on my 1300sf clairemont home, and $3 in my wallet. I am using a public library computer to type this because my electricity has been turned off.
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ParticipantI can’t believe that people post their salaries and bank balances on an internet site. You guys better hope that no Ukranian hacker ever 0wnz the piggington log, or you’ll be the target of some serious port-scanning. Hopefully you’ve all got good firewalls or some of that money you’re so proud of may be on its way to Kiev in the near future.
April 4, 2007 at 4:45 PM in reply to: Some housing market newspaper clippings from the last Iraq war #49217blahblahblah
ParticipantThere are primarily three components to the price increase in oil from 1991 until today: inflation, which accounts for about $9/barrel, increased demand not only from China and India but also Central and South America as well. The whole world is-a-gettin’ cars and they’re burning a lot of fossil fuels. Also, we are running out of “easy” oil (the kind that shoots out of the ground when you stick a pipe in) and are having to work harder to get the oil that is left using more expensive techniques in harder-to-get-to places.
We can complain about oil companies all day long, but at the end of the day they’re just giving people what they want. Don’t like Exxon? Stop buying their product. Quit your commuter job and work from home making less money. Stop running your air conditioner and turn off your computer when you’re not using it. Shop at the farmer’s market and buy local produce. Ride a bicycle. There are many many reasons to disagree with the current administration (and the previous one!) but we can’t pin all of the world’s woes on them. Oh, and why are the Chinese doing so well and buying so many cars? Because of Clinton’s free-trade policy, so he’s as much or more to blame than Dubya.
April 4, 2007 at 9:55 AM in reply to: Some housing market newspaper clippings from the last Iraq war #49160blahblahblah
ParticipantUmmmm, there was another president in office for 8 years between 1992-2000, you know. You can’t blame Dubya for everything. Big Al’s easy money ride was in full swing during the 90s — he just had to turn up the speed a bit since 2001 to keep us all from noticing that it was no longer attached to the ground.
It is fascinating to see the names in those clippings, though! These people are like the undead, they never go away. Remember when Kissinger crawled out of his coffin to advise Bush on the middle east last year? Just imagine if Jeb Bush or Hillary Clinton gets the white house in 2008 and serves another 8 years. Then Chelsea or Jenna will be old enough to ascend to the throne. I sure am glad we kicked out the British so we could get rid of dynastic rule.
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ParticipantThere will be a lot of pressure on the government by both the lenders and the lendees for a bail-out. Everyone, from the dumbest FBers to the high-paid executives of mortgage companies wants to keep their winnings to themselves but transfer their losses to somebody else. “Privatize profit, publicize risk.”
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ParticipantLindy, can your family actually afford this home? Here is my definition of “afford”, which by the way used to be the standard. Calculate the monthly payments when financing the home with 20% down, and an 80% fixed-rate 30 year mortgage. (If you do not have a 20% down payment, or at the very least a 10% down with a 10% second, you cannot afford the home.) If the monthly payments with this financing are less than 1/3 of your gross (before-tax) income, you can afford the home. Otherwise you can’t. If you can’t afford the home, you should sell it. It’s that simple. Painful, but simple. Some would probably argue with me, saying “I bought my home in 1999 and I put 0% or 5% down, I can afford my home!” That may be true in 2007, but those people are also very lucky and got to ride a huge wave of appreciation that has already stopped.
Best of luck to you and your family, I hope everything works out well for you…
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Participantjg, I worry about our dollars too, but there are a few differences between the US of the early 21st century and the old Weimar Republic. First, we’re still the world’s most powerful country by a long shot. Our manufacturing base has eroded, that’s true, but we still have a huge, growing population (unlike Western Europe which is pretty stable population-wise), and we have a great deal of influence worldwide via our network of military bases and a huge deep-water navy. The Weimar Republic was a crippled, broken country hobbled by the Versailles Treaty and the aftereffects of a lengthy, expensive war.
Our government’s foreign debt obligation is big and worrisome, however, it is comparable to the foreign debts of other western countries when adjusted for population size. We as a country need to get serious about rebuilding our manufacturing base and exporting high-value-add goods again and we can start reducing that debt. Imagine a presidential candidate promising to rebuild the US as the world’s leader in energy-efficient technologies! Republican or Democrat, he’d win by a long shot.
I have seen a lot of folks get burned (including myself!) investing for these “worst-case” bearish armageddon scenarios and I’ve sworn off of them for good. These are once-in-a-lifetime or possibly even rarer events, so they’re nearly impossible to time correctly. Also, a lot of very powerful people with a lot more money than you and I have a vested interest in preventing financial armageddon from happening, so it’s a fair bet that they will succeed.
Inflation is a worry, however the fed will be forced to raise interest rates if it becomes a problem; that’s good news for those with cash in short-term CDs. You’re not going to get rich but you won’t lose too much of your money either. IMO, gold and stocks are gamed too much by the Wall Street Pig Men to be suitable for small fry like me…
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ParticipantClassic. This joker works in the FRAUD DETECTION DEPARTMENT at Ameriquest, yet he somehow qualified for a DTI ratio of 90% ($36K/$40K) on his interest-only toxic voodoo loan. Even if you include the (unreported to the IRS I’m sure) rental income from his roommates, the DTI is still a 45%. Must have been a NINJA (No Income, No Job or Assets) loan!
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