Please lets not confuse the issue here.. borrowers borrowing more than they can afford has absolutley nothing to due with lenders lending on "market value" and suffering balance sheet losses on reduction of value.
Its not about people not being able to pay their mortgages, its about Fannie&Freddie holding receivables at 5 on properties worth 2. In the end they (F&F) made bad investments becasue they cant foreclose on the properties, sell them and payoff the receivable and recoup their investment. Plan and simple, any other explanation is B/S.
If the borrower cant pay the monthly mortgatge then they can be foreclosed on and they are out in the cold. If the lenders made bad investments (lending money on inflated FMV of property) then they are out in the cold, scratch that, then they run to the govenment with there lobbyist and promise to take care of the incumbents.
Absolutlely nothing has been done for the Shmoe that purchased the house and cant pay for it, and nothing should be. There are limited cases where the mortgages were reworked but it only applied to less than ten percent of the total.
Well they were once worth fives but people started to lose home equity and figured if my mortgage is worth more than the equity in my house why pay it. Many people in that situation said fuck it and walked away from their obligations. 9.2% of mortgages are delinquent right now, not saying that is all of it but its part of it.
...
I remember that bet.
And I was supposed to be wandering around the mountainous regions of Arizona, looking for food and water because my home in Orange County was supposed to be under 20 feet of Pacific Ocean.
...
Then... he was going to shoot me.
i'm almost disappointed. that all sounded kind of exciting. now i don't even have the proper satisfaction of gloating.
Actually, there is precedent for this. It happened in Norway in the early 90s. We had a period of liberalized banking that quickly led to overlending and a banking crisis when the general economy took a plunge, and house mortgages couldn't be paid for. Several banks went under and was saved by the government to secure the savings there-in. At the same time there were implemented stricter rules for how much the banks need to have in reserve and for loans in general. Since then, things have picked up considerably.
So we have had that property market downer amid a recession, had the government intervene and regulate, and come out on top again. So it might work for the US too.
Peace
Dan
Intersting. Pretty much same scenario we have today.
Fuck off.
I moved down to Georgia for the sole and specific reason that i wanted to spend time with my ailing grandparents before they died (they were both 90+) ... i spent the last 12 months taking care of my grandmother, held her hand and kissed her forehead repeatedly in her last week on earth, and was by her bed when she died.
Excuse me for being excited about receiving an inheritance.
My wording was poor because i was being rushed out of the house by my girlfriend.
I hope you bought gold early or have at least taken some money off the table because its down over 25% from its high. Commodity boom is over.
I didn't buy it as early as i would have liked, but i did take some off the table.
I do not think the boom is over though. I think we are going to see another spike here at some point after all this BS cheerleading over the bailout subsides and the reality about the broader nature of this crisis is realized. Remember the dollar amounts involved in the 80s with the S&L and remember how long that took to clear. And that wasn't about the ENTIRE housing market, or about ALL the major banks, it wasn't global, and the numbers were nothing compared to this.
wow, $250. you're really putting your money where your mouth is. if money is so worthless, why are you doing anything that requires cash on hand?
I said FACE VALUE.
Now you are REALLY showing your ignorance. A $250 dollar bag of 90% silver US coins is worth about $2800 now, and was worth about $4,000 a few months ago.
As far as cash on hand goes, its called life, buddy.
Contrary to what most of you yuck yuks believe about me i do have one, and i do intend to live it day by day for as long as i can until (if\when) this shit really hits the fan. Business requires CASH, not silver or gold, unfortunately.
Ah fuck it.
Just go ahead and ban me kat.
I can't take it anymore.
If I was to smile and I held out my hand
If I opened it now would you not understand?
...
I remember that bet.
And I was supposed to be wandering around the mountainous regions of Arizona, looking for food and water because my home in Orange County was supposed to be under 20 feet of Pacific Ocean.
...
Then... he was going to shoot me.
LOL. I was going to bet OLS $100,000 but he wanted to have me put it in escrow. I didn't really want to liquidate assets to tied up $100,000 in escrow for a bunch of years, and he didn't think we could do the bet with just a written piece of paper, so it never happened. Probably just as well since it appaears OLS was a fraud anyway.
"I'll use the magic word - let's just shut the fuck up, please." EV, 04/13/08
Intersting. Pretty much same scenario we have today.
There are at least similarities to the situations. Norwegian media highlights it as sort of "we have been through it, now it's America's turn". They also talk to norwegian economists that are surprised that the US government would do this, since it's very much a socialist move, but maintain that it's a good thing they did, as it could have gotten a lot worse.
And if it is done after the "norwegian model", what happens is that the boards are fired, the stock holders have forfeited their investment, and the government pick up the accounts to prevent many people from losing their everything. So the banks/companies are history, but the government lessens the impact for those affected (which in this case was 1/2 the mortgages in the US?) in order to prevent the economy to crash completely.
Peace
Dan
"YOU [humans] NEED TO BELIEVE IN THINGS THAT AREN'T TRUE. HOW ELSE CAN THEY BECOME?" - Death
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
Yeah sounds like both CEO's are out and common stock holders wont recieve anymore dividends or any other residuals. Bond holders are safe as well as the preferred stock holders. Thing is many of these institutions that should benefit hold most of the stock of fannie and freddie, they'll probably take that tradeoff though
driftin, just sayin, if we're headed for an apocalyptic meltdown, you should have a stockpile of gold, weapons and food in an underground bunker. but it appears that you're playing the system like everybody else... still dumping cash into stocks and hoping to get rich once it all blows over. brokers are more vile than lawyers even.
Driftin is like the crazy guy on the streets of manhattan making all these prophecy's proclaiming the end is near and when you do it long enough one might just be fulfilled.
Actually, there is precedent for this. It happened in Norway in the early 90s. We had a period of liberalized banking that quickly led to overlending and a banking crisis when the general economy took a plunge...
Many countries already witnessed this and it always starts by a "period of liberalized banking". I still fail to understand how people continue to advocate 0 regulations, when there are so many examples too show that too many or too little regulations generally lead to massive failure.
Driftin is like the crazy guy on the streets of manhattan making all these prophecy's proclaiming the end is near and when you do it long enough one might just be fulfilled.
He's not crazy, he's passionate about his ideas
But whatever he says he's more right than you care to aknowledge when he says the end is nigh. Not the end of the world, or of the USA of course, but the end of the current $-based worldwide economy. Things change, and the current twitching we're witnessing is a sign of that, things will change and the reference currency is bound to change soon.
Many countries already witnessed this and it always starts by a "period of liberalized banking". I still fail to understand how people continue to advocate 0 regulations, when there are so many examples too show that too many or too little regulations generally lead to massive failure.
Indeed. In Norway's case it was the transition from very regulated banking to no regulation in the 80s that provided the crisis. We then re-regulated somewhat, and seems to have found a balance. Some regulation seems to be crucial to any financial market if you want to avoid regular crashes.
Peace
Dan
"YOU [humans] NEED TO BELIEVE IN THINGS THAT AREN'T TRUE. HOW ELSE CAN THEY BECOME?" - Death
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
Indeed. In Norway's case it was the transition from very regulated banking to no regulation in the 80s that provided the crisis. We then re-regulated somewhat, and seems to have found a balance. Some regulation seems to be crucial to any financial market if you want to avoid regular crashes.
Peace
Dan
We've had some issues like that in the US in other areas as well concerning energy deregulation and telecom ownership deregulation.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
0
g under p
Surfing The far side of THE Sombrero Galaxy Posts: 18,200
AMY GOODMAN: What do you think of the bailout?
MAX FRAAD WOLFF: Well, I think that it’s a little bit like the Bear Stearns “bailout,” quote-unquote, which is, it’s a little bit more funky and a little bit more complicated than it probably needs to be and than it’s generally represented in the media. So what the government has done is take control and assume all the risk associated with these two gigantic financial companies without fully taking them over, in a classic sense, and without fully offering as much protection as they’re telling the world they offer.
And I do think it’s a watershed moment in the history of American homeownership, and it’s a watershed moment in the relationship between financial firms and the government—another. They’ve been coming fast and furiously in the last thirteen months, as the credit crisis intensifies and drags out. But it’s a big change in the way American homes will be financed down the road, and it’s a big change in who’s to blame and who has to ultimately pay back for the mistakes of the housing bubble.
AMY GOODMAN: Max, step back. How did these institutions get established, and why?
MAX FRAAD WOLFF: OK, well, they were established for reasons that will be immediately interesting to your audience, I’m sure. In 1938, Fannie Mae, the older, larger, was born, and it was born to do two things, which I think we can relate to now: reduce the number of foreclosures and increase the amount of homeownership by middle-class Americans. Before Fannie Mae, a relatively smaller percentage of more affluent Americans owned their homes. So, in 1938, only about 40 percent, a little over 40 percent, of Americans owned their own home, whereas last year 68 percent of Americans owned their own home. So it did work, on some level.
Freddie Mac started in 1970 to give competition to Fannie Mae. And Fannie Mae was taken out of the government and privatized in 1968. So, in 1938, Fannie Mae is born; in 1968, it’s privatized; in 1970, Freddie Mac is introduced to compete. Their basic function has been, with—the way it’s done has changed a bit—but to act as an intermediary between banks loaning to households and financial markets to make more loans available at lower prices to more Americans.
The US government has seized control of the mortgage finance companies Fannie
Mae and Freddie Mac in what could become the largest corporate bailout ever. The
Treasury Department has pledged to provide as much as $200 billion as the two
quasi-public companies deal with heavy losses on mortgage defaults. We speak
with economist and writer, Max Fraad Wolff.
*We CAN bomb the World to pieces, but we CAN'T bomb it into PEACE*...Michael Franti
*MUSIC IS the expression of EMOTION.....and that POLITICS IS merely the DECOY of PERCEPTION*
.....song_Music & Politics....Michael Franti
*The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite INSANE*....Nikola Tesla(a man who shaped our world of electricity with his futuristic inventions)
LOL. I was going to bet OLS $100,000 but he wanted to have me put it in escrow. I didn't really want to liquidate assets to tied up $100,000 in escrow for a bunch of years, and he didn't think we could do the bet with just a written piece of paper, so it never happened. Probably just as well since it appaears OLS was a fraud anyway.
...
Oh... okay... you were the one. I thought it might have been Catch22.
I remember it being a pretty decent chunk... 20K or 100K or 200K. An amount pretty ridiculous for a really ridiculous bet.
I tried to go in for 100 bucks... but he wouldn't take it because it was too cheap.
...
and yeah... eventually, my home will be under the Pacific Ocean. But, only after Orange County slide past San Francisco as the Pacific Plate spins past the North American Plate in the next million or so years...
Hopefully, I'll have moved out of that place by then.
Allen Fieldhouse, home of the 2008 NCAA men's Basketball Champions! Go Jayhawks!
Hail, Hail!!!
Comments
Well they were once worth fives but people started to lose home equity and figured if my mortgage is worth more than the equity in my house why pay it. Many people in that situation said fuck it and walked away from their obligations. 9.2% of mortgages are delinquent right now, not saying that is all of it but its part of it.
i'm almost disappointed. that all sounded kind of exciting. now i don't even have the proper satisfaction of gloating.
Intersting. Pretty much same scenario we have today.
Fuck off.
I moved down to Georgia for the sole and specific reason that i wanted to spend time with my ailing grandparents before they died (they were both 90+) ... i spent the last 12 months taking care of my grandmother, held her hand and kissed her forehead repeatedly in her last week on earth, and was by her bed when she died.
Excuse me for being excited about receiving an inheritance.
My wording was poor because i was being rushed out of the house by my girlfriend.
I didn't buy it as early as i would have liked, but i did take some off the table.
I do not think the boom is over though. I think we are going to see another spike here at some point after all this BS cheerleading over the bailout subsides and the reality about the broader nature of this crisis is realized. Remember the dollar amounts involved in the 80s with the S&L and remember how long that took to clear. And that wasn't about the ENTIRE housing market, or about ALL the major banks, it wasn't global, and the numbers were nothing compared to this.
I said FACE VALUE.
Now you are REALLY showing your ignorance. A $250 dollar bag of 90% silver US coins is worth about $2800 now, and was worth about $4,000 a few months ago.
As far as cash on hand goes, its called life, buddy.
Contrary to what most of you yuck yuks believe about me i do have one, and i do intend to live it day by day for as long as i can until (if\when) this shit really hits the fan. Business requires CASH, not silver or gold, unfortunately.
Ah fuck it.
Just go ahead and ban me kat.
I can't take it anymore.
If I opened it now would you not understand?
LOL. I was going to bet OLS $100,000 but he wanted to have me put it in escrow. I didn't really want to liquidate assets to tied up $100,000 in escrow for a bunch of years, and he didn't think we could do the bet with just a written piece of paper, so it never happened. Probably just as well since it appaears OLS was a fraud anyway.
enjoy your ban. you have no reason to be mad at me. you are the one who said it..
I wouldnt be at all excited for receiving money from my dead grandmother. I would be too hurt to care. but thats just me.
And if it is done after the "norwegian model", what happens is that the boards are fired, the stock holders have forfeited their investment, and the government pick up the accounts to prevent many people from losing their everything. So the banks/companies are history, but the government lessens the impact for those affected (which in this case was 1/2 the mortgages in the US?) in order to prevent the economy to crash completely.
Peace
Dan
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
I can't wait.
Wuss.
If I opened it now would you not understand?
He's not crazy, he's passionate about his ideas
But whatever he says he's more right than you care to aknowledge when he says the end is nigh. Not the end of the world, or of the USA of course, but the end of the current $-based worldwide economy. Things change, and the current twitching we're witnessing is a sign of that, things will change and the reference currency is bound to change soon.
Peace
Dan
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
We've had some issues like that in the US in other areas as well concerning energy deregulation and telecom ownership deregulation.
The US government has seized control of the mortgage finance companies Fannie
Mae and Freddie Mac in what could become the largest corporate bailout ever. The
Treasury Department has pledged to provide as much as $200 billion as the two
quasi-public companies deal with heavy losses on mortgage defaults. We speak
with economist and writer, Max Fraad Wolff.
Listen/Watch/Read
http://www.democracynow.org/2008/9/9/us_bails_out_fannie_mae_freddie
Peace
*MUSIC IS the expression of EMOTION.....and that POLITICS IS merely the DECOY of PERCEPTION*
.....song_Music & Politics....Michael Franti
*The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite INSANE*....Nikola Tesla(a man who shaped our world of electricity with his futuristic inventions)
Oh... okay... you were the one. I thought it might have been Catch22.
I remember it being a pretty decent chunk... 20K or 100K or 200K. An amount pretty ridiculous for a really ridiculous bet.
I tried to go in for 100 bucks... but he wouldn't take it because it was too cheap.
...
and yeah... eventually, my home will be under the Pacific Ocean. But, only after Orange County slide past San Francisco as the Pacific Plate spins past the North American Plate in the next million or so years...
Hopefully, I'll have moved out of that place by then.
Hail, Hail!!!