Can the Govt really fix the economy?

Re: Can the Govt really fix the economy?

PostBy: jpete On: Wed Mar 04, 2009 8:03 pm

djackman wrote:So redlining is ok in your book? Statistically you can show area A has a higher rate of default than area B, but that has nothing to do with an individual in area A's ability to repay a loan.
Hope you can explain how my living in the lower-rent part of town makes me more unable to repay my mortage than someone in the million dollar neighborhood or my friends in the same situation as me? And any RE agent can tell you the "first rule" has nothing to do lending practices.


How does your ability to pay the electric bill relate to your ability to drive? Don't know but your insurance company checks your credit rating when it decides how much to charge you for insurance.

djackman wrote:"there's no income" was proven wrong.


If there was enough to make it worth their time, don't you think those "greedy" banks would have done it?

djackman wrote: But there was no reason for them to do that when they could rake in large profits regardless of the quality of the loan.


When the Fed is giving money away at 1%, what bank ISN'T going to take it? Back up an armored car full of money to your neighborhood, throw open the doors and yell "FREE MONEY!" and see if you don't get a feeding frenzy. Banks are like people, the want to make money.
jpete
 
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Re: Can the Govt really fix the economy?

PostBy: mikeandgerry On: Thu Mar 05, 2009 1:14 am

djackman wrote:You're somehow twisting "equal opportunity lending" into "equalizing income" which is not what this is about. All the banks had to do was deny anyone who couldn't qualify - if they couldn't find enough good borrowers, they should have gone back and explained. But there was no reason for them to do that when they could rake in large profits regardless of the quality of the loan.


I don't doubt that the banks were culpable in this mess; they were the major force. I am saying that it all started with the CRA and ACORN. That is where the marxian philosophies came into play to create this equal outcome desire on the part of both parties: to achieve the American Dream of everyone owning a house. That was followed by loose monetary policies by the gov/fed and so on until we had ourselves a great big housing bubble on which we built a banking house of cards.

No twisting.
mikeandgerry
 
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Re: Can the Govt really fix the economy?

PostBy: ken On: Thu Mar 05, 2009 9:42 am

No.
ken
 
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Re: Can the Govt really fix the economy?

PostBy: Cyber36 On: Thu Mar 05, 2009 3:02 pm

This is a trick question??? :down:
Cyber36
 
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Re: Can the Govt really fix the economy?

PostBy: billlindley On: Thu Mar 05, 2009 3:19 pm

leowis1 wrote:
But we live in a different world than the 30s. Green energy is NOT going to be a catalyst for growth. How much more can you sink into education? America is developed. I think people lived way past their means and this new lifestyle is a permanent correction. But a lot of pain is going to come from that. Without a job, I cannot pay my mortgage. Nobody can. I'm working. Thank God for that. But I hope that ax doesn't fall on me.


I think you have it hear. I am 27 and had my troubles with "living beyond my means." At 22 I had 3 cars, an expensive girlfriend, no college education, was living at home with mommy and 24K in credit card debt. I was living like nearly every other kid my age not thinking about tomorrow but thinking about the present. 5 years later I have a bachelor’s degree, and I have no recurring credit card debt. I cut the expensive girl lose and traded her in on a better model with fewer needs. O, and I own a home with a 30 year fixed mortgage. However it makes me nearly sick to spend money knowing how deep in debt I was before.

I don’t have many extras but I live well. I pay for everything besides the student loan debt and mortgage with the money I make each week. I do have a nice big TV but I have no debt associated with it. I bought a “dirty” coal stove to save money while my friends keep their houses at 75 in the winter burning thru nat gas or oil. The central air is kept at a nice 70 degrees during the summer my friends keep their window air conditioners on constantly chilling the house to cool 60. Many of my friends call me cheap because I don’t buy a new wardrobe every season and I don’t have the fanciest “necessities.” I know the value of a dollar and I make smart necessary decisions. They have it all, or so it would seem. They all live in apartments or have houses that they are underwater on if they even made it out of mommy’s house. They live credit card bill to credit card bill paying only the minimums on tens of thousands of dollars in credit card debt. They appear to be living well but they really own nothing.

Take a look around at the teens with cell phones, cars bought for them, crazy wardrobes etc. How do you think these kids will acclimate to living paycheck to paycheck? They won’t, they don’t want to. They want to live to impress others. Society has been this way for many years and now it is coming home to roost. Why do some many people struggle to live when their home equity lines are cut off or their credit cards cancelled? No one knows how to live on what they make.

Who can you blame? Ourselves. Greed anywhere requires an individual to give in to it. People had to use those credit cards. People had to sign papers to get mortgage’s they couldn’t afford. The bankers and the government shouldn’t have to tell someone they can’t afford something. We the people should tell ourselves.
billlindley
 
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Re: Can the Govt really fix the economy?

PostBy: mikeandgerry On: Thu Mar 05, 2009 10:04 pm

billlindley wrote:Who can you blame? Ourselves. Greed anywhere requires an individual to give in to it. People had to use those credit cards. People had to sign papers to get mortgage’s they couldn’t afford. The bankers and the government shouldn’t have to tell someone they can’t afford something. We the people should tell ourselves.


Are we victims? Only of ourselves.

No one knows the lesson better than the one who is reformed.

Good for you, Bill. I applaud your efforts. You were given opportunity and seized it. That's what it's all about.

And by the way, those high maintenance women.....are they ever worth it?
mikeandgerry
 
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Re: Can the Govt really fix the economy?

PostBy: Black_And_Blue On: Thu Mar 05, 2009 10:19 pm

ken wrote:No.


Brevity is the soul of wit.
Black_And_Blue
 
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Re: Can the Govt really fix the economy?

PostBy: Don_t_Say On: Fri Mar 06, 2009 9:01 pm

Short answer - Not this government! :cry2: :cry2: :cry2: :cry2:
Don_t_Say
 
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Re: Can the Govt really fix the economy?

PostBy: Poconoeagle On: Fri Mar 06, 2009 9:03 pm

Young Chuck in> Montana bought a horse from a farmer for $100.> The farmer agreed to deliver the horse the next> day.> > > The next day the farmer drove up and said, "Sorry> son, but I have some bad news... the> horse died."> > > Chuck replied, "Well, then just give me my money> back.">
> > The farmer said, "Can't do that. I went and> spent it already."> > > Chuck said, "Ok, then, just bring me the dead> horse."> > > The farmer asked, "What ya gonna do with> him?"> > > Chuck said, "I'm going to raffle him> off."> > > The farmer said, "You can't raffle off a dead> horse!">
> > Chuck said, "Sure I can, Watch me. I just> won't tell anybody he's> dead."> > > A month later, the farmer met up with Chuck and asked,> "What happened with that dead> horse?"> > > Chuck said, "I raffled him off. I sold 500> tickets at two dollars a piece and made a profit> of $998."> > > The farmer said, "Didn't> anyone complain?"> >
> Chuck said, "Just the guy who won. So I gave him> his two dollars back."> > > Chuck grew up and now works for the government. > He's the one who figured out how> this "bail-out" is going to> work.
Poconoeagle
 
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Re: Can the Govt really fix the economy?

PostBy: billw On: Fri Mar 06, 2009 10:16 pm

Good one but I think Chuck founded Bear Stearns. :)
billw
 
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Re: Can the Govt really fix the economy?

PostBy: gambler On: Fri Mar 06, 2009 11:27 pm

A little song for ya!!
Boy i'm having fun with you-tube tonight'




My favorite words from the song "doin nothin means a lot to me"
gambler
 
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Re: Can the Govt really fix the economy?

PostBy: billlindley On: Wed Mar 11, 2009 10:53 am

mikeandgerry wrote:
billlindley wrote:Who can you blame? Ourselves. Greed anywhere requires an individual to give in to it. People had to use those credit cards. People had to sign papers to get mortgage’s they couldn’t afford. The bankers and the government shouldn’t have to tell someone they can’t afford something. We the people should tell ourselves.



And by the way, those high maintenance women.....are they ever worth it?


Of course looking back no, at the time you can never really see it.....
billlindley
 
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Re: Can the Govt really fix the economy?

PostBy: JLF53 On: Fri Mar 13, 2009 12:36 am

One has to consider that under the Bush administration we had run away spending. If spending, regardless of where, would fix the economy we would not be in this position. If your household was in dire financial straights would you go out and spend more?

The government needs to relax the mark to market requirements of Sarbanes-Oxley. When securitization products become illiquid one cannot mark them to single digits. The bonds still have intrinsic value based on cash flow and the 95%+ (general) performing assets within the securitizations. This low valuation for the annual Sarbanes-Oxley requirement is leading to under valuation of financial service firms and other firms like GE. The valuations, due to Sarbanes-Oxley, are artificially low and adding heat to the panic. A more prudent requirement would be a three or five averaging mark to market number. This would improve the health of many low valued firms.

The real question is whether bank lending, bolstered by cash injections from the federal government, can take the place of the now illiquid securitization mechanism. I have yet to see any data measuring the annual volume of lending, based on securitization, whether it be residential mortgages, commercial loand, credit cards, home equity loans or other assets, compares to historic mere bank loans. I suspect that the liquidity of the present banking system and banking stimulus is insufficient to meet historic demand on its own. Until there is previous measurement of securitization volume versus conventional bank lending, the government is taking a shot in the dark. The government needs to scrutinize the data and measure previous volumes for traditional lending, securitization and present lendable assets. Relaxing of the harsh and unreasonable Sarbanes-Oxley mark to market requirement would be a huge step in the right direction for increased liquidity and more realistic valuation. It would prevent further calls on reserve requirements due to low valuations, and the downward valuation spiral of the financial service firms.

editing due to poor typing
JLF53
 
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Re: Can the Govt really fix the economy?

PostBy: Yanche On: Fri Mar 13, 2009 5:49 am

Interesting opinion. Sounds like a subject that must be work related. Do others share your opinion? Could you provide references that discuss it in more depth? Sarbanes-Oxley seemed to be a need jerk reaction to some other accounting crisis, don't remember the details. Small businesses seem to not like the cost of complying and say it shouldn't reply to them. Is there some professional society group that would have an opinion on it? Accounts professional society, etc.? Just trying to learn more.

This might be a key to picking stocks. I find it hard to believe a company like GE who has great skills and assets in many areas and strives to be #1 or #2 in their business interests has taken such a stock hit. Perhaps GE Capital is dragging it down and a more studied analysis would show it to be largely accounting rules.
Yanche
 
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Re: Can the Govt really fix the economy?

PostBy: Richard S. On: Fri Mar 13, 2009 6:21 am

leowis1 wrote:I realize that this is an incredibly deep topic.


Not really it's quite simple. The U.S. Government needs to be run like a business and that means some hard decisions and pissing a lot of people off including the people voting for them. Since the hallowed halls of congress are filled with a bunch of spineless saps who's only thought is getting reelected they will never succeed in getting us out of the mess but will in fact make things worse.
Richard S.
 
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