Bailout Bill Fails

[IndiReloaded]

Do you know what a referendum is, Eco?

Publishing a plan does NOT mean it needs to be followed. Who says so?

Such limited thinking. Yikes.

[ecojeanne]

so the country should vote on a published plan, not a bad idea. Isn't there some rush to get this sorted asap though?

[Only-virgins]

This made me happy. ****ing stupid banks. Giving loans to every poor moron that came along. Now what, dig yourself out of your own grave.

[IndiReloaded]

Eco, I'm very sorry, but I really don't enjoy replying to your posts. I should have more patience, but I don't come here to educate per se, I come to discuss & have a bit of fun. You've not got the chops just yet, tho I admire your tenacity. Keep trying, keep learning.

[ecojeanne]

oh indi, why do you bother, after all you know it all, seriously we should be grateful you grace us with your presence, i feel so blessed.

calm your arrogance will ya, it's childish

[misombra]

does every ****ing thread here have to be eco and somebody arguing for 5 pages?

snoooooooooooooooooooooooooooooooore!

[IndiReloaded]

Miso, I watched the Obama/McCain debate on utube last night. Obama is very impressive. He actually *says* something, McCain just waffles. Post an update in your Obama thread, if you have time.

[Shadow2121]

Why dont they just take out like 100 billion instead of 700 billion, and give everyone in america like 200,000 dollars whos 18 and older...everyone who lost their homes can buy them, make their payments, and people can start buying shit lol.

[Lipp]

Why dont they just take out like 100 billion instead of 700 billion, and give everyone in america like 200,000 dollars whos 18 and older...everyone who lost their homes can buy them, make their payments, and people can start buying shit lol.

Assuming that 200 million of the population is over 18 (roughly 2/3 of the total), 100 billion divided by that 200 million is $500. So 500 dollars per person.
And 4 trillion is needed to supply $200,000 to everyone over 18.

Even if you write it in haste its a serious lack of perspective. 300 million dollars sounds like a lot, spread out its one dollar per person. The bailout of 700 billion would equal about $2333 per person in the total population.

[GrkScorp]

Why dont they just take out like 100 billion instead of 700 billion, and give everyone in america like 200,000 dollars whos 18 and older...everyone who lost their homes can buy them, make their payments, and people can start buying shit lol.

I'm always hard on Republicans when it comes to fallacious arguments.., but I have to give a round of applause to Obama as well..

Not too many things bother me on the Democratic ticket.., except for one little thing.. "McCain wanted to privatize social security and gamble away your retirement!"

Gamble away? Really? Let's explore that argument a little more..

When you're taxed for an extra 15% of your income in the present.., let's say you make $40,000 a year.., that's $6,000.., $3,000 from you.., $3,000 from your employer.. into a fund that's managed.., that represents your retirement.. That's fine.. How much do you expect to collect when you retire from social security? Honestly.. $700 a month? $800 a month? That's fixed income.. And that's not in 2008 dollars.., but in 2048 dollars.., which means you can't buy sh*t with that..

But if you would instead have $6,000 each year.., earning an average return of 5% each year.., for 40 years.., how much would that leave you with for your retirement? (a lot more than $800 a month)

So why would the Democratic ticket always support the position that privatized social security is "gambling away your retirement"???

Because it's just a nicer way of saying.. "if the government isn't controlling or managing your money.., you're too financially irresponsible to manage it yourself.., and you might not even save up for your own retirement!"

For much the same reason.., lawmakers place the same faith in the average citizen.. Let's face it.., someone who purchased a home and is now in a position of not being able to make payments on that home.., is probably not the most financially responsible person out there.. Can we.., you know.., the rest of us.., taxpayers.., responsible citizens.., government.., really place any more trust in such people? Can we be certain that they will use the money we give them to pay back their debt.., or are they going to go buy an iPhone.., new pair of nikes or a car with it?

The philanthropist in you might find the idea of giving money to these individuals appealing.., but your wallet knows that's not such a wise idea.. The philanthropist in consumer banking might have liked the idea of making it possible to buy a home.., for everyone who dreamed of owning a home.., but they learned the hard way what risks follow from lending to those who are not creditworthy..

I was having a talk about this with my father who's been a real estate broker for 30 years.. Back when he was a salesperson.., he didn't know the industry or market well.., a property could have been worth $200,000.., and an owner could have been asking for $330,000.., and he would persuade buyers and try to convince them with an unshakable conviction that this property was priced at a bargain for $330,000.. And he would actually get that price! As he gained more experience in the industry and market.., this is what he would tell people..

"I can either lie to you to get the listing.., or I can tell you the truth.. The truth is.., your home is worth $600,000.."

What would happen? Salespeople would come along.., in an effort to list the property.., and say.. "no way! you're house is worth at least $800,000! I have a buyer that's willing to pay $850,000 for it and wants to close right away!"

The truth is.., in sales.., there's a golden rule.. "How much is something worth? As much as someone is willing to pay for it.."

There were really people willing to pay $850,000 for a property that was worth $600,000..

They were willing to take on so much debt in acquiring the property.., that although they "could" still purchase it.., it made no financial sense to go ahead and do so.. It would leave them with a negative cash flow each month.., which they were not in the position to absorb.., and the property would not appreciate at a fast enough rate to compensate for the negative cash flow..

You can't blame salespeople for being salespeople.., and you can't blame owners (sellers) for wanting the highest price for their home.. The only ones in this picture that you can blame.., are the buyers.. Buyers who drove up market prices even though the price they were willing to pay for these properties didn't make financial sense.. These were not investments.., this was careless spending.., gambling on speculation at best..

The safety mechanism in place couldn't respond and prevent banks from lending out more than these properties were really worth.. When an appraiser appraises a property.., he's not doing a financial analysis.., he's doing a comparative market analysis.. "how much are similar homes worth and how much have they sold for recently?".. When the market is showing an upward trend with strong momentum.., the appraiser thinks.. "houses just keep going up.., other homes sold for $820,000.. $835,000.. I guess $850,000 is a fair appraisal for this home"..

Add on loan officers who didn't bother with a credit check.., income verification.., or even forged tax returns to qualify borrowers.. You have nothing holding back or preventing fiscally irresponsible and irrational buyers from taking on debt just to jump into a high default situation..

These same people who it would be "nice" to give money to.., are the same fiscally irresponsible people who gave rise to the current situation.. It's easy to vilify major corporations.. But in reality.., while Congress and the Fed are trying to work things out.., companies like Citigroup.., JP Morgan.., Bank of America.., HSBC.., USB.., Wells Fargo and Deutsche Bank are preventing a global collapse of financial markets.. They're taking on the debt of once existing behemoths like Washington Mutual for pennies on the dollar.., or financially distressed Wachovia.. in return for equity (common stock).., just to provide liquidity..

They know they're going to be vilified.., they know that in spite of their undeterred business ethic and sense of corporate responsibility even in times like these.., it's easier for the public to point at them as the ones most worthy of blame.. They know that when the crisis resolves.., they risk having lawmakers break up their diversified financial services business model through the Sherman Anti-trust Act.., the very business model that's allowed them to be the only source of strength that holds the market together while those same lawmakers decide what to do..

Unless you're one of the people who makes poor financial choices and can sympathize with the individuals at the heart of this crisis.., you should try and really understand the whole picture a little deeper than just what's on the surface.. When you do.., you might have a change of heart as to where to best put your tax dollars.., and to whom to lend a helping hand to..

[Mish]

Bad investors exist everywhere and over inflated house bubbles burst all the time all over the world, but why to such an extent in US?

In California and much of the rest of America, there is a powerful incentive for homeowners such as Ms Trainer to walk away from their mortgage obligations. Though banks can repossess and sell the homes of borrowers who stop paying their mortgages, under a legal quirk originating in the Great Depression of the 1930s, banks cannot easily pursue borrowers for any balance outstanding on the main mortgage on their homes.

Consequently, by walking away from her apartment, Ms Trainer has also walked away from the loss on her property.

Her bank gets stuck with that

[url]http://news.bbc.co.uk/2/hi/business/7529277.stm[/url]

In Australia the only way to get out of a home loan that i know of is to declare bankruptcy (passing an evaluation that you no longer have any assets), in US according to above people just walk away from their loans with only consequence, their house (for which they paid a one digit percent deposit) is repossessed and a dent in credit history. Banks have little protection from defaults.

[starbuck]

so the country should vote on a published plan, not a bad idea. Isn't there some rush to get this sorted asap though?

Maybe I'm not following this debate correctly. But I believe that the bill is posted online on the government's website. People can go read it if they want. And yes, there is a rush. Normally there would be congressional hearings before a vote, as Indie mentioned.

[IndiReloaded]

Maybe I'm not following this debate correctly. But I believe that the bill is posted online on the government's website. People can go read it if they want. And yes, there is a rush. Normally there would be congressional hearings before a vote, as Indie mentioned.

+1

I was just reading the senate site this evening. Tho it seems the main bailout package link has been removed. Anyway, here's the main link & a couple others regarding housing reform and a commentary on the last financial bailout package. Fascinating stuff.

[url]http://www.senate.gov/pagelayout/legislative/b_three_sections_with_teasers/active_leg_page.htm#F[/url]

[url]http://thomas.loc.gov/cgi-bin/query/F?c110:1:./temp/~c110AnGeBf:e8119:[/url]

[url]http://thomas.loc.gov/cgi-bin/query/D?r110:2:./temp/~r110ohv04W::[/url]

[bluesummer]

I agree with this except you post as if 'the government' is some kind of entity separate from the ppl it governs.

People ARE the government. So the statement "Why isn't the government doing something?" should be replaced with "I don't understand what is happening, perhaps I should find out."

If there's a problem with government, its b/c WE'VE let it happen. Obama is NOT the new US saviour, he's your wakeup call.

Hmmm?

Unfortunately Indi, in most people's minds, the gov't IS separate from the people it governs. Why do you think the people are so eager for the gov't to 'fix' their mistakes......also known as their ignorance?

I don't paint society as a whole with a very intelligent brush. I would say the majority of people are just ignorant, and are used to being coddled in a society where they know someone (ie the gov't) will take care of them if they can't or just won't do it themselves. They don't want to educate themselves. They just want what they want, and they'll take the easiest route to get it.

[IndiReloaded]

I'm an optimist, Blue. Just b/c ppl act a certain way, past tense, doesn't mean they WILL in future.

Of course, I don't bank of that, but I do allow for the possibility. I try to keep separate in my mind those who need reminding and those who choose to be ignorant. The former can still act. The latter are lost anyway.

I don't despise much, but I do despise voluntary ignorance. Eyes wide shut.