So, another government bail out?

[billandamy]

http://www.msnbc.msn.com/id/26787984?GT1=43001

"describing a plan that could cost taxpayers hundreds of billions of dollars to buy up bad mortgages and other toxic debt that has unhinged Wall Street."

So what say ye (pirate talk)?

How many of you like paying into saving a failed business and rescue some homeowners who spent more than they financially should have, beyond their means?

 

[Turtlesboat]

I'm cool with it. Just show me which house in Florida is now mine.

 

[gerryb]

Why do I always get these things wrong???

I bought consumer staples 10 years ago when internet was booming...

I got into bonds 6 years ago when international equities were the rage...

I bought more stock 4 years ago when housing was booming...

I paid-down my debt 2 years ago when everyone was borrowing as much as humanlly possible...

My neighbors borrowed 10x their annual salary to live in a mansion for a couple of years, now walk away from the debt and WE ALL get stuck with the bill... this is getting old..

 

[billandamy]

I'm cool with it. Just show me which house in Florida is now mine.

:lol: Put like that, I think I have changed my mind too!

 

[billandamy]

My neighbors borrowed 10x their annual salary to live in a mansion for a couple of years, now walk away from the debt and WE ALL get stuck with the bill... this is getting old..

Yup...this is what gets me.

Ok, now I know some lenders were playing a crappy game with consumers and making them believe they could afford homes, and Im willing to let that account for a few people that are, well, not of high intelligence.

However, I would say the vast majority took advantage of this and bought homes they simply could not afford if anything bad happened to them or the economy. It is their OWN damn fault.

Thats a big problem...living off of credit. It invariably will bite you in the arse.

 

[RiverRat]

I'm cool with it. Just show me which house in Florida is now mine.

Yours!!!:smt043Those houses have been set aside for all the illegal mexicans that need housing...

 

[highslice]

Yup...this is what gets me.

Ok, now I know some lenders were playing a crappy game with consumers and making them believe they could afford homes, and Im willing to let that account for a few people that are, well, not of high intelligence.

However, I would say the vast majority took advantage of this and bought homes they simply could not afford if anything bad happened to them or the economy. It is their OWN damn fault.

Thats a big problem...living off of credit. It invariably will bite you in the arse.

When this whole thing started to blow up about 18 months ago, MSN was running the sob story of a woman in Detroit who was going to lose her home. Seems she didn't understand her loan documents and was clueless that her interest rate could increase significantly after 2 years. she also didn't understand that her first 2 years payments did not even cover the interest, so she was building NEGATIVE EQUITY. Finally, she was dumbfounded that real estate values could actually go DOWN.

Clearly an ignorant and uneducated consumer taken advantage of by an unethical mortgate broker - right?

SHE WAS AN F'n CPA:smt021. My response to the story at the time was "Oh, blow me". No way she didn't understand every aspect of the deal. She was greedy, like most of the others who got in this mess. It is unbelieveable to me that an intelligent, logical human can put themselves in such a position.

I had people telling me how stupid I was not to take advantage of the "cheap' mortgages. I thought I was being pretty smart. Credit is not a bad thing if used properly. Living within your means is paramount. I do both.

Turns out maybe I am the Dumb A$$. Should have mortgaged myself out the a$$, and then let the government cover it for me. Damn, what the hell was i thinking!




Rant off - Sorry Wes.

Bill - does that explain how I feel?:grin:

 

[gerryb]

Tim, you guys in the midwest are much too conservative and living in the past. Come on and get with the times...this is 2008 you know... thank God those of us that live on east coast and west coast are living way beyond our means...where would this country be if everyone was from the midwest? Go out there and BORROW as much as you can before it's all gone...one day the govt may not be so generous with your money...

:grin:

 

[tmhudson2]

There's a nice foreclosure in Sarasota with dock on p.W10 of today's Wall Street Journal -- I don't know if the 'Dancer tied up there comes with it, but that might be a negotiating point.

 

[comsnark]

what burns my but is not just the Fed Buyup of every bad investment in the country, but the amount of EARMARKS and PORK that will surely laden the eventual legislation.

 

[fc3]

There must be a way to let the idiots who borrowed beyond their means and the fools who lent them the money to jointly suffer from their malfeasance. I'm tired of paying for the stupidity of others. Let the bastards (little b, Matt) burn. And no I mean malfeasance, not mistake. They should have known better.

Best regards,
Frank

 

[ruf1967]

Here's one for ya. I was watching Dateline a few days ago last week and the reporter had interviewed a nice couple and their only child who were living in a very nice, clean, newly built house somewhere in California. They had bought the house on their bad credit using an adjustable rate mortgage. Well, they are about 5 years into this mortgage and the payments are ballooning, surprise, surprise! They were complaining at how gas prices was making it impossible to pay for their mortgage, food, day care, you know the same old BS you here from people who get in over their heads and they realize, "oh sh!t, we really can't afford this house, what were we thinking. The reporter went on to ask them, "What if a president could give you the ability to refinance your home at a fixed rate?" Of course they said "We would most definitely vote for that pres and we would gladly take any assistance we could from the government". Well, my fellow taxpayers, I hope your pockets are deep and your hearts are full of glee, because that is one of the things that will be coming our way. Someone has got to pay for the financial mistakes of others and it looks like it will be the ones who actually "live within their means".

 

[Four Suns]

I haven't seen anything yet that allows homeowners to stay in their houses if they get foreclosed on. Having the government buy distressed loans at a reduced cost and then reselling them on the open market a few years later says nothing about forgiving loans. Heck... the "bad paper" market now is dominated by the "gweedo" companies buying this stuff and then being very aggressive collecting on it. The government should buy the stuff on the cheap and then sell it to the gweedos of the world at cost +10% or something... that'll get the bums out of the houses.

I hope the government does two things... First, get stock warrants from the companies selling the bad paper to the government so the taxpayers can get upside from the bad paper being unloaded. If the dumb ass democrats in congress make it so people can't get kicked out of their houses, the value of the loans/paper is ZERO.

I would hope that if congress does pass some law about resetting loans to current property values instead of the current loan balances sticks it to the people that did it. There should be some sort of "personal stock warrants" such that the government gets a preference on any capital gains until the forgiven amount is paid off (like the future sale of the house). However, people will say that "taxes" the poor and not the rich... BS.

No more "free money"... only "pawn shop style loans"...

 

[chuck1]

As much as I have to agree with the current bail out (The Credit Crunch had to be addressed) I'm not sure if it is going to solve the problem. One of the major reasons why the paper is "bad" is because the home values continue to fall. We are not just talking about sub prime loans any more. Sub primes only make up a small portion of mortgages. The major problem is an oversupply of homes. Every time we have another foreclosure it just adds to the problem. It brings down the home values and makes the "bad paper" just that much worse. Another major problem we have coming is all the people that are being put out of work from the average person on wall street (not just top management) all the way down to the ditch digger in home construction. This problem did not happen overnight, it has been going on since back in late 05 and early 06. Just a side note, who took control of congress back in late 05 early 06?

 

[comsnark]

Part of the problem going forward is that people still don't understand that homes are leveraged investments.

You take a loan to leverage your capital so you can invest in something you can't otherwise afford to buy. The thing you buy is an asset, whose value is set by the marketplace. The average person won't think of borrowing money to buy stock, but how different is buying a house using a mortgage?

I know several people who still have not grasped how one could possibly be "upside down" on a real estate investment. Unfortunately, one of these people I know actually owns a second home and despite having a tennant is struggling to understand why they are not making money.

- - - - - - - -

I am still struggling with this whole financial mess - - -> I am still not convinced why the government needs to bail out the industry. I understand what Gary is saying about the government "turning a profit". I just don't believe the yo-yo's in Washington have that as a focus. Afterall. .. if nobody in the financial sector thinks they can make money on this stuff, why should we think the goobermint can do it?

It's not just the Democrats that are the problem. The Republican Executive branch is actually asking for this legislation. I don't hear them saying anything about "no pork" in the final package.

 

[Turtlesboat]

seems like a lot of company's are buying back loads of their own stock right now. Is this to prop up their price or do they feel like it's a good deal? Or a little of both?

 

[comsnark]

Companies buying back stock. . . . .there is, of course, a third option you have not listed: When a company buys, then someone must be selling. Usually, that includes company executives.

Not to be cynical, but I often hear about buyback programs when companies are at record highs. In part, this is because companies that are doing the buybacks are *successful*, and are rewarded for that success. . ..