Can hardly wait for the new bailout plan

[glovesetc]

this has got to be a doozie ! I wonder what it is going to cost us ???? Funny that congress can not balance a budget yet they are going to handle this financial mess . Funny that people will probably fall for it and the market will be up big tomorrow no less as euphoria over rides peoples sensibilities as usual . Might go up for the next month even but boy when this comes down to the realities there is going to be a rude awakening for all !!! I am sure the banks are lining up now every deadbeat piece of crap loan they have to dump it on the Fed !!!!!! I know I would be. This will be rather interesting to say the least !!!!!!!

[zengrifter]

Originally Posted by glovesetc

this has got to be a doozie ! I wonder what it is going to cost us ???? Funny that congress can not balance a budget yet they are going to handle this financial mess . Funny that people will probably fall for it and the market will be up big tomorrow no less as euphoria over rides peoples sensibilities as usual . Might go up for the next month even but boy when this comes down to the realities there is going to be a rude awakening for all !!! I am sure the banks are lining up now every deadbeat piece of crap loan they have to dump it on the Fed !!!!!! I know I would be. This will be rather interesting to say the least !!!!!!!

Funny how card-carrying member of the Keating Five John McCain - the poster boys of previous financial institution economic meltdown and fraud - is likely to be the president withing a few months, and on top of that his son just got entangled by another collapsed institution whom he was chairing the AUDIT committee. zg

[Jeff Dubya]

Almost as funny as how Obama has taken more money from Wall Street than McCain.

http://www.bizjournals.com/stlouis/s...5/daily49.html

[zengrifter]

Originally Posted by Jeff Dubya

Almost as funny as how Obama has taken more money from Wall Street than McCain.

http://www.bizjournals.com/stlouis/s...5/daily49.html

ZZone has covered this going back a year+ zg

Look Who's Backing Obama

RENSE | 2-20-8

The names of the top 5 US corporations backing Obama speak volumes...

• Goldman Sachs - $421,763
• UBS - $296,670
• Lehman Brothers - $250,630
• National Amusements - $245,843
• JPMorgan Chase - $240,788

MORE- Obama and Corporate Fascism

[aslan]

Originally Posted by glovesetc

this has got to be a doozie ! I wonder what it is going to cost us ???? Funny that congress can not balance a budget yet they are going to handle this financial mess . Funny that people will probably fall for it and the market will be up big tomorrow no less as euphoria over rides peoples sensibilities as usual . Might go up for the next month even but boy when this comes down to the realities there is going to be a rude awakening for all !!! I am sure the banks are lining up now every deadbeat piece of crap loan they have to dump it on the Fed !!!!!! I know I would be. This will be rather interesting to say the least !!!!!!!

On the serious side, doesn't actual real estate underlie all those bad mortgages, and doesn't that mean that eventually all that appreciable property will rise to meet the losses realized in discounting all those bad loans? Kind of a long-term healing process. lol

[glovesetc]

because all the bad real estate has dragged down the good and it will not really appreciate for many years . I do not think the economy can wait all that much longer for a long term appreciation while the people are paying their mortgages on great property but they are still upside down in their loans . Upside down meaning the mortgage far exceeds the house value . The day of real estate appreciating 5-10% is all but gone except in a very few high end desirable places around the country. I would think the yearly appreciation overall will be in the LOW single digets if anything . The debt americans have is a joke . Look at credit card debt and that debt has not turned into a crisis although it should have 2 years ago . The way the banks are beating up people with late fees, over draft charges, and 34% APR in some states is short of criminal . Do I feel sorry for these people ? Not in the least . Live within your means folks or you will pay the consequences and the people who pay in full and on time will continue to reap the benefits . A good example is I receive 4% on all gas purchases and 2% on all other purchases just for being a responsible person , paying my bills in full and on time every month the way you are supposed to! I guess all the others that are paying fees , high interest, and other charges are actually donating to me! What a great country - you got to love it .Aslan my friend - we have some rugged times coming - remember where you heard it first buddy . Strange european banks have not crapped yet either ! I find it hard to believe only banks in America were affected by their greed and avarice . Might be some surprses coming from the other banks in the international financial market I think This is the start and also BOTH candidates better start saying who will raise TAXES the least instead of lying and saying tax cuts for everyone and see the light . How we going to pay for the infrastructure , health care, social security , medicare,national debt , and every other program with our current tax system ???? Oh yes and the taxpayer gets to pay for the bailout as well !!!!Lower taxes my dick!!!!!

[Brutus]

Originally Posted by aslan

On the serious side, doesn't actual real estate underlie all those bad mortgages, and doesn't that mean that eventually all that appreciable property will rise to meet the losses realized in discounting all those bad loans? Kind of a long-term healing process. lol

yes, but...

wages will have to come up to meet the high cost of housing, or a tremendous amount of inflation will need to occur. or both

my issue is *debt forgivness for some, but not for others.* specifically these damned corporations that got us into this. corporations can essentially walk away, where individuals are stuck with it.
debt forgiveness should take place at the individual level, so that most consumers can have some kind of credit to buy stuff with. buying stuff is what will make the economy go again. hopefully stuff made right here.

I understand that some politicians tried to stop loose lending practices, but since it didnt cook in washingtion, why didnt they stand up on soapboxes, and scream from mountaintops? or the local news?

[N&B]

Actually we're all in this together. Yes, its bad mortgages. But then, you could bet on wether or not the bad mortgage got paid off. You could also hedge that position. Meanwhile, the average Joe, and the wealthier Joe could tap into the unrealized gain that "might" exist and borrow against the said gain that "might or might not" exist. Credit agencies said it was OK, and some institutions insured it.

Fact of the matter is, everything after sentance #2 above is based on intangibility and/or a guess. So it seems incumbent that the original mortgage, good or bad, that fails is a tangible asset that failed. Everything else is truly toilet paper from the initialization, and has no value, and never did have value, excepting for the words of a few people with the supposed knowledge that there WAS a value.

[N&B]

I thought to expand a bit. Lets say you bought a house in 1995 for 200 grand. You put 40 grand down (20%) and mortgaged 160 grand for 15 years at 6% compounded monthly. The interest costs $392,654.97 plus the principal of $160,000 for a total of $552,654.97. You have to ask yourself... at any time during the mortgage, was the house ever valued at more than the total? I'll go out on a limb and state that the answer is no for 1.5 sigma (86.6%) of the mortgages so written.

Now lets bet for or against the mortgage holder... will they pay-off? We'll allow one to hedge that bet. Since the mortgage is in a pool of many mortgages, we'll allow one to bet for or against the pool, since it has a mixture of risk... and let one hedge that risk.

At the same time, we'll tell the mortgage holder that his house is worth more than he thinks, and let him/her borrow against this perceived increase of value. Thus a second loan, tied to the mortgage can be written to borrow against this perceived gain. Naturally, this elevates the cost of the mortgage itself, having the 2nd loan tied to the mortgage. And thus the COST of the mortgage increases. Lets say its 50 grand over a period of 10 years at 6% compounded monthly. The interest is $90,969.84 plus the $50,000 principal... total $140,969.84. The COST of the mortgage of the presumed $250,000 house is now $693,624.81.

Now, how many mortgages will cover THAT final amount? This is plainly the law of diminishing returns at work. And lets say that while all this is going on, that this $50,000 equity stake has bee re-evaluated as being only worth $30,000. Now the mortgage holder has to pay that $20,000 difference, and guess what, we'll give him/her a loan... and you wonder why we're in a mess?!?!? Its conceivible that the original mortgage cost increases by 50%!, and the price of the house has changed very little for the good, and is decreasing.

[Jeff Dubya]

In my mind... any financial firm that receives so much as $1.00 in federal funds to cover bad debts caused by corrupt practices, the CEO (or in some cases, CEOs) and the rest of their management team should be going to prison.

They made bad loans. And now it's costing US while they walk away with million dollar severance deals. There's a lot of criminality involved in this whole cluster-foxtrot, but those responsible need to pay. Dearly.