Wall St. wins Capt Obvious award

[smileyman]

Who created the problem. I mean really. People cant pay because they cant find work that pays. Who can blame our economic collapse on people who took a shot at getting what they wanted? Who can blame banks for making money lending? Or investors for buying up blocks of it.


The real issue as I see it is corporate America outsourcing every facet of their production to overseas entities for the sake of short term profit.

it's been going on 3-4 decades and there had to be a day of reckoning. All the other shit is just symptoms. cover them up if you want, stimulate them all you can, but it doesnt fix the problem. That is really gonna run its course until someone wises up and invests in America for the long term.

[pauldun170]

Originally Posted by Homeslice

They foreclosed after only 1.5 months? That makes absolutely no sense. It's rare to find ANY bank that forecloses within the first 6 months after the borrower stops paying.

Yup...story definitely sounds fishy.
Foreclosure is big expensive process and generally is something a bank wants to avoid.

[pauldun170]

Normal people should not be offered complex mortgages.
Normal people should not be offered a mortgage unless they have a reasonable down payment and meet stringent criteria.

However, we are a capitalistic society. If institutions figure out way to make a buck by taking a little risk and offering certain products to consumers we should be supportive.
People have had it easy for so long that they have forgotten the meaning of the word risk.

[OneSickPsycho]

Originally Posted by smileyman

Who created the problem. I mean really. People cant pay because they cant find work that pays.

Who can blame people for signing their life away without considering how they were going to pay for it down the road? I can.

Originally Posted by smileyman

Who can blame our economic collapse on people who took a shot at getting what they wanted? Who can blame banks for making money lending? Or investors for buying up blocks of it.

Who can blame the banks for taking advantage of the system our government set up and encouraged? I can't. The banks did what was smart business to do at the time, with Uncle Sugar coaxing them along the way.

Originally Posted by smileyman

The real issue as I see it is corporate America outsourcing every facet of their production to overseas entities for the sake of short term profit.

it's been going on 3-4 decades and there had to be a day of reckoning. All the other shit is just symptoms. cover them up if you want, stimulate them all you can, but it doesnt fix the problem. That is really gonna run its course until someone wises up and invests in America for the long term.

I'm not buying it. While I think we do need to be more competetive with manufacturing in the global market, I don't see the corporations as the ones holding the sole responsibility. It's not about short term profit, it's about being competitive when the shit that's made overseas costs considerably less... Unions are part of the issue making it very difficult for company's to compete with cheap labor abroad... and the other part of it is a lack of innovation in US companies.

[t-homo]

Hell, higher minimum wages are what creates more unemployment than anything. Most of the mass production jobs are minimum or just above it, and if the companies have to spend more for each employee, they can't hire as many people. Simple economics.

[EpyonXero]

Originally Posted by OneSickPsycho

Who can blame people for signing their life away without considering how they were going to pay for it down the road? I can.



Who can blame the banks for taking advantage of the system our government set up and encouraged? I can't. The banks did what was smart business to do at the time, with Uncle Sugar coaxing them along the way.




I'm not buying it. While I think we do need to be more competetive with manufacturing in the global market, I don't see the corporations as the ones holding the sole responsibility. It's not about short term profit, it's about being competitive when the shit that's made overseas costs considerably less... Unions are part of the issue making it very difficult for company's to compete with cheap labor abroad... and the other part of it is a lack of innovation in US companies.

Oh, its the Government's fault. I see.

[goof2]

Originally Posted by pauldun170

Normal people should not be offered complex mortgages.
Normal people should not be offered a mortgage unless they have a reasonable down payment and meet stringent criteria.

However, we are a capitalistic society. If institutions figure out way to make a buck by taking a little risk and offering certain products to consumers we should be supportive.
People have had it easy for so long that they have forgotten the meaning of the word risk.

I agree about the public's view of risk. If someone wants a "safe" investment they can go down to their local bank and pick up an FDIC insured Certificate of Deposit. It will pay about .3% interest over a year or about 3 bucks for a thousand dollar investment. People want investments with a larger return with no more risk and don't understand it just isn't available.

At the same time "Wall St.'s" evaluation of risk also got way out of whack. They used flawed assumptions about the real estate market which lead them to the conclusion that there was no way to lose in mortgage lending. They found out the hard way that wasn't the case.

I do disagree with not offering complex mortgages to consumers. I believe it is incumbent on borrowers to understand the obligation they are agreeing to. If a borrower is incapable of doing so they should either get help or not sign the document. That also includes the depressing number of people who don't understand a 30 year fixed mortgage. The mortgage market shouldn't be restricted to catering to the lowest common denominator.

Originally Posted by OneSickPsycho

Who can blame the banks for taking advantage of the system our government set up and encouraged? I can't. The banks did what was smart business to do at the time, with Uncle Sugar coaxing them along the way.

This goes to what I was saying about "Wall St.'s" evaluation of risk. If they had stuck to risky mortgages only when they were federally insured (FHA loans) that would be one thing. Instead they offered high risk loans to everyone. The only reason "Wall St.' thought it was smart business at the time was based off some seriously messed up assumptions. If I invest in an FDIC insured CD and the bank goes under it doesn't matter because my money is insured by the government. Alternatively, if I invest in a stock thinking it can't lose, but it tanks anyway, I'm the one to blame. I hold "Wall St." to the same standard.

[pauldun170]

Originally Posted by goof2

I agree about the public's view of risk. If someone wants a "safe" investment they can go down to their local bank and pick up an FDIC insured Certificate of Deposit. It will pay about .3% interest over a year or about 3 bucks for a thousand dollar investment. People want investments with a larger return with no more risk and don't understand it just isn't available.

At the same time "Wall St.'s" evaluation of risk also got way out of whack. They used flawed assumptions about the real estate market which lead them to the conclusion that there was no way to lose in mortgage lending. They found out the hard way that wasn't the case.

I do disagree with not offering complex mortgages to consumers. I believe it is incumbent on borrowers to understand the obligation they are agreeing to. If a borrower is incapable of doing so they should either get help or not sign the document. That also includes the depressing number of people who don't understand a 30 year fixed mortgage. The mortgage market shouldn't be restricted to catering to the lowest common denominator.



This goes to what I was saying about "Wall St.'s" evaluation of risk. If they had stuck to risky mortgages only when they were federally insured (FHA loans) that would be one thing. Instead they offered high risk loans to everyone. The only reason "Wall St.' thought it was smart business at the time was based off some seriously messed up assumptions. If I invest in an FDIC insured CD and the bank goes under it doesn't matter because my money is insured by the government. Alternatively, if I invest in a stock thinking it can't lose, but it tanks anyway, I'm the one to blame. I hold "Wall St." to the same standard.

Its a little more complex.
Years ago (1960's)...in order to make an extra buck so that they could raise capital to offer more loans Freddi Mac started selling mortgage backed securities.
Nothing wrong with it.

Year later some folks decide to maybe up their game a bit, make a lot more money with the risk that goes along with it by taking some products normally offered to low risk high wealth clients and offering them to lower income folks.
Nothing Wrong with it as long as you manage the risk.

Meanwhile some asshole decides "We're holding all these mortgages and thats a risk. Lets sell them off to those dudes putting together mortgage backed securities. We'll get some dough and we'll get this risk off our lap."
Nothing wrong with selling off some of your risk.

Soon...assholes didn't give a fuck about what kind of mortgage the put together and who they offer it too because "Hey...we're just gonna sell the fucker off anyway...no risk to us"

While this is happening jerk offs are buying and selling bundles of these off. Bundles of Mortgages packaged up as happy little money makers.
Ratings agency's having spent years dealing with all the freddy mac bundles figure...fuck it this shit is historically good so we just mark it as triple AAA funbagtastic.

Other assholes have the idea to insure these little bundles and sell insurance on em. Sell insurance on these bundles to anyone...even those with no stake in it.

I could go on for an hour and ten pages so I'll stop there. Lets just say its a complex issue.

My original post that most people shouldn't be offered complex mortgages still stands in the way that teens shouldn't be given "big people" credit cards.

[OneSickPsycho]

Originally Posted by EpyonXero

Oh, its the Government's fault. I see.

Not exclusively... I hold the homebuyer more responsible than anyone... Just because you can, doesn't mean you should...

[pauldun170]

Originally Posted by OneSickPsycho

Not exclusively... I hold the homebuyer more responsible than anyone... Just because you can, doesn't mean you should...

In your opinion who should be able to buy a house?(of those that can)