Economic Crisis

[dragonrescue 28]

Click on link below, it will make you sick!

[ny10570 745]

One problem when were these banks forced to make these loans. I see enabling, but it looks like corporate greed is the real problem.

[Goose 188]

One problem when were these banks forced to make these loans. I see enabling, but it looks like corporate greed is the real problem.

The liberal agenda of the democrats is the central issue here. Corporate greed is at play, no question, but we would never be here if democrats didn't feel the pressing need to help people who don't want to help themselves. And dont you know Mr. Obama wants to do the same damn thing?! His "economic plan" is welfare on a previously never before seen scale - take our income tax and give it to people who don't pay income tax!

[ny10570 745]

Fannie and Freddie begged and pleaded for those changes, which were approved by a Republican controlled house and senate. Get you head out of your arse. Neither the Republicans nor Democrats caused this. They allowed it to happen which is where they failed us. The Republicans with their love of big business overlooked the obvious risks so investment banks and mortgage brokers could make a killing. As long as interest rates stayed low people would be able to maintain their payments but also remain under their mountains of debt. It would become a never ending revenue stream. The Democrats sold out so they could continue their friend of the common man BS and went after quick money rather than being responsible and doing what may have been best for the people rather than what the people thought they wanted. This isn't a partisan issue. People on all sides were screwed by our elected officials so they could take care of themselves. Self sacrifice is long gone from political offices. Now its all about IGM.

[ajsbear 11]

Looking at what keeps going on gives all the more reason for "TERM LIMITS." 2 or 3 terms of 6 years and your gone. When they are in office 20 or 30 years and do nothing but line their own pockets and bend the rules t osuit them its time to give them their walking papers.

[ltmdepas3280 1]

The liberal agenda of the democrats is the central issue here. Corporate greed is at play, no question, but we would never be here if democrats didn't feel the pressing need to help people who don't want to help themselves. And dont you know Mr. Obama wants to do the same damn thing?! His "economic plan" is welfare on a previously never before seen scale - take our income tax and give it to people who don't pay income tax!

You might have to give up the free meal from Mcdonalds for the three hours a week that you work!

Stop the chicken little sky is falling routine....you would find that the statements you've made are without any validity...as are mine..regarding you!

[Stepjam 118]

Bigmouth Nancy Pelosi and the other Libtards are blaming the Republicans for the financial mess. Ironic, since one of her colleagues, Sen. Barney Frank (D, MA)chairs the Senate Financial Services Committee. Starting in the 90's it was he who pushed for deregulation of Fannie Mae and Freddie Mac, and pressured those institutions to loosen up their lending standards as recently as 2003.

It all boils down to this: If you borrow money, make sure that you can pay it back. It’s just the right thing to do. And maybe some people need to live within their means. It was never a mystery to me at least how some of my new nearby neighbors, who certainly aren’t wealthy, managed to move into a brand-new 3,500 sq. ft McMansion, which seems to be the only damn things developers have been building over the last ten years. Buy now, pay later. Guess what, later has arrived, and the “For Sale” signs are going up.

It began with mortgages that allowed no money down, no income verification, no principal payments (interest only) and ridiculous terms, like forty years. These

mortgages were sold to lots of people who really should have known better. Millions of borrowers moved in to their new homes, facing a $2500 or $3000 monthly payment. Add a $400 car payment or two, and maybe another $400+ on credit cards, then add all of the other suburbia “must-haves.” Next, they have to heat that big house, and furnish it too. Then the boom goes bust. It always was unrealistic.

Sorry if I sound cynical, but I’m pissed off because I, and my great-grandchildren, will have to pay for some schmuck’s financial incompetence. Our taxes are going to skyrocket and credit will get very tight, even for good credit risks. Both will happen, no matter who wins. Most of the debt-loaded nouveau-riche leased their Lexuses, Infinitis, Escalades, BMW’s, or whatever. A lot of car manufacturers have been pulling out of leasing cars in certain markets for a few years now, because the cost of “asset recovery,” also known as “repossession and resale,” is just too high. Some insurance companies won’t even underwrite a lease unless the lessee has golden credit.

Personally, I think the Government bail out is a bad deal for everyone who pays taxes and makes and honest effort to do the right thing. Maybe some of the banks deserve to fail due to pure incompetence, and the execs who allowed it all to happen should be out on the balls of their asses. I don’t have any sympathy for people who bought homes that they really couldn’t afford either, nor do I buy the Democrats’ assertion that these poor people were “misled” by the banks and by Wall Street. It’s called ignorance, what these people should have done was take off the rose-colored glasses so that theyt could read and understand the terms of the loan offering, and understand what they were getting themselves into in the first place. Obama wants to bail these numbskulls out. After the 1987 crash and the S&L scandal, lots of us learned the hard way that American Big Business thinks in the very short term. It's all about making as much money as quickly as possible, getting out, and letting the next guy pay the consequences. They don't give a crap about you, and neither do the Democrats or the Republicans. Blaming Wall Street is a cop-out; at least the Republicans aren't jumping on the "blame Wall Street" bandwagon the the Democrats have pout together.

This all would have hit the fan no matter who was minding the store, and if anyone wants to criticize Palin for taking a cheap shot at Obama, they should dial it back and listen to Obama's economy rhetoric on the Republicans. The war is certainly a factor in the economic mess, but the Dems need to take some medicine too. I’m not a Neo-Con or a Republican; I’m not a Democrat, either, although I will admit to being a few degrees to the right of center most of the time. After "putting my foot in my mouth" cutting and pasting something that I later found to be inaccurate, I took some of the acidic advice that I recieved from some fellow forum members, and checked on the veracity of this nine year old New York Times article below. It is verbatim, as published. If you've follwed my rant this far, you may as well read it:

FROM THE NEW YORK TIMES, 9/30/99

http://query.nytimes.com/gst/fullpage.html...xprod=permalink

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups. The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

Edited October 6, 2008 by Stepjam

[Guest alsfirefighter]

This is very simple..any policy that went into effect was approved by Congress. What happened to that big speech Nancy "left wing wack job" Pelosi gave about how congress was going to get x amount of work done while in session and that they would fix things up. Great job Nance!

[ex-commish 490]

This is very simple..any policy that went into effect was approved by Congress. What happened to that big speech Nancy "left wing wack job" Pelosi gave about how congress was going to get x amount of work done while in session and that they would fix things up. Great job Nance!

Nancy Pelosi did what she and Barney Frank do best...LIE !!!

[SageVigiles 1,194]

I still fail to see how the government has the responsibility to manage the financial sector. Free market economy means just that. Some other countries let the government manage national markets, most notably China, Cuba, Venezuela, and the former Union of Soviet Socialist Republics...

[ny10570 745]

It was still approved by a Republican controlled house and senate. No one party can dodge this as both parties were in favor of it. Democrats were able to parade around as friend of the common man and Republicans were able to make bank for investment firms, mortgage brokers, etc. There was no big outcry about the potential dangers. Interest rates were incredibly low and the economy was growing. No one thought about the down side and now we're paying for it. Politicians are the problem, on both sides of the political spectrum. And now here we are entrusting them with 300 Billion Dollars to try and fix a mess that no one knows the solution to.

[jack10562 414]

I still fail to see how the government has the responsibility to manage the financial sector. Free market economy means just that. Some other countries let the government manage national markets, most notably China, Cuba, Venezuela, and the former Union of Soviet Socialist Republics...

The US gov't has been regulating the US financial markets since forever, BUT, they had no control over the "credit default swaps" an unregulated financial "insurance" derivative to hedge risk ultimately involving trillions of dollars. Add in all the defaulting sub-prime mortgages, and these were responsible for the current financial institution implosions.

Had the gov't previously managed to regulate these "insurance" schemes , we probably would not be having this conversation right now.

[mfc2257 464]

This isnt just our problem, other countries (trading partners) are going into the same situation.

How long before the next revolution/revolt?

Put your money in govt bonds and not the smarket.

Why would you want to put all your money in government bonds? Do you know that you CAN lose money by purchasing government bonds? Take some of the factors below?

What maturity would you purchace? How many pieces of individual paper would you need to be properly diversified across the yield curve? What is your risk tolerance? Are you planning on holding those bonds until maturity? If not, are you aware of the inverse relationship between yield and price? What will you do if you put all of your money in government instruments and need to access that money before the bonds reach maturity AND the bonds are trading a a discount? Are you looking for income or total return from these bonds?

I wouldn't be handing out that kind of advice or authoritive statement unless you know how to navigate the tricky waters of investment management!

Edited October 9, 2008 by mfc2257

[helicopper 1,050]

Looking at what keeps going on gives all the more reason for "TERM LIMITS." 2 or 3 terms of 6 years and your gone. When they are in office 20 or 30 years and do nothing but line their own pockets and bend the rules t osuit them its time to give them their walking papers.

It has been said to me when I've raised the same issue that there is a term limit every November and if we're all too stupid, naive, apathetic, or whatever to vote the incompetent or corrupt out of office shame on us.

It's a valid point! Do you duty on November 4th and if you're not happy, let the elite ruling class hear it!

[exmrvfc 0]

This may have to be the best reporting on the entire topic. Colbert sums up the ntire problem.

http://www.colbertnation.com/the-colbert-r...siness-syphilis

[27east 19]

This is more then a crisis, this is a crash.

Neither of the two candidates have any clue or financial knowlege. This is why senators make bad presidents. At least governors have some background in budgets. McCain is a bumbling old idiot and Obama thinks social welfare is the way out. Neither of them are "outsiders." McCain has been in Washington since before the wheel and Obama is hardly the "common man."

I am a registered Republican.

People thought I was crazy why I said Mitt Romney was the best candidate.

[ex-commish 490]

Donalt Trump stated:

"Anytime we pay more than $50.00 a barrel we are in a depression."

[Guest]

I am a registered Republican.

People thought I was crazy why I said Mitt Romney was the best candidate.

Man, I am in your camp on this one.

[TRUCK6018 50]

Put your money in govt bonds and not the smarket.

I wouldn't touch a gov't bond (or a single stock for that matter). All my money is stuffed in diversified mutual's. Yeah, they're down right now but so what? I don't plan on pulling them anytime soon. The current price makes them "on sale" to buy more!

Unless you plan on withdrawing with in the next 18 months or so, they're not going anywhere.

Nancy Pelosi did what she and Barney Frank do best...LIE !!!

Question: How do you know when a politician is lying????

Answer: Their lips move!