Let it crash

@Bella Dea,

One of the congressman suggested, why not let wall street buy into this bailout package with 10% of their money. Good idea, but I'd suggest a higher percentage since they're the ones that got us into this mess. They're greedy and incompetent; let them pay some of the cost.

1 Reply

@FreeDuck,

FreeDuck wrote:

What I'm wondering is, what if what we are doing now prevents total collapse now, but virtually ensures that it happens later, but worse.

I don't think that increasing the national debt would ensure that the banking systems of the future will collapse. I see higher taxes and lesser social services as a more likely scenario and while that is unfair to the future (to make them pay the interest on our bills) it doesn't have to be catastrophic unless paying the bill is put off by the nation until the point at which it is no longer possible. I think if you really want to take the hit the right thing for to advocate is higher taxes and less spending to foot the bill.

But I like the proposals I've seen to buy up the bad mortgages at 15% below current market prices. I'm all for pushing the real estate to rock bottom as fast as we can or even having a recession. But I don't want banking collapse. That would be a much bigger problem than recession, popped bubbles and even future crushing national debt.

I've lived in many countries with crushing national debt, and there's a world of a difference between the fiscal tightrope it puts them on and a run on banks.

3 Replies

@JPB,

Raise taxes on the richest (1 percent? forget now. but his current proposal.)

Cut pork.

Close loopholes.

Make things more efficient. Staff agencies with qualified people instead of cronies.

Start slow, and then as things improve, do more.

2 Replies

@cicerone imposter,

Just now I heared Obama's statment in CNN.
The one fallacy in his statment is this.
This is not Dems problem nor Reps problem but the problem of all Americans.
I read all the available intellectual informations. And i am quite sure the problems are made developed and allowed by politticians and Wallstree money sacks and some puny share holders and manipulaters.
Majority of the American need not read a common statement from a vietnam veteran and his counterpart obama's 10 dollar change or Hope..
Business as usual IN USA

0 Replies

@Robert Gentel,

RB, The problem with this bailout is nobody has committed to buying those "bonds." It's interest free money for our government, but a very high cost for taxpayers of today, tomorrow, and for generations to come. Why is this bailout fair to handicap future generations for the misdeeds of the current populace?

1 Reply

@sozobe,

I agree with doing all of those things but I don't think when stacked against a $700 billion pay out they will result in an improved economy. My point is that it really doesn't matter which one of them gets elected from a fiscal standpoint since there won't be any money to support anything other than this bail out.

1 Reply

@JPB,

And we're talking generations, and much longer under the conservatives who doesn't believe in taxes. Great choice.

1 Reply

@Robert Gentel,

Robert Gentel wrote:

I think if you really want to take the hit the right thing for to advocate is higher taxes and less spending to foot the bill.

I have and do. Initially I supported it just because of the massive debt of the war, but now I just wonder if it is possible to raise them high enough to cover without going so high that you cause other negative consequences. I support raising them regardless, though.

Quote:

But I like the proposals I've seen to buy up the bad mortgages at 15% below current market prices. I'm all for pushing the real estate to rock bottom as fast as we can or even having a recession.

I think buying up or renegotiating mortgages is actually a really good idea since it helps everyone. I can't for the life of me see why the mortgage companies (I don't think this is a traditional bank issue) haven't already done that, though.

Quote:

But I don't want banking collapse. That would be a much bigger problem than recession, popped bubbles and even future crushing national debt.

I've been reading about this so much over the last few days that I'm not even really sure what banking is anymore. We're not talking about deposit institutions -- they don't seem to be in trouble, and they are insured anyway. And I'm having trouble picturing a modern day run... we hardly use cash anymore. So many Americans have little or no savings.

I am just really pessimistic that we can fix this in any lasting way. Perhaps I need a drink.

1 Reply

@Robert Gentel,

Robert Gentel wrote:

...I'm all for pushing the real estate to rock bottom as fast as we can ...

but wouldn't that just keep the problem rolling? then you have even more people paying for a house that's worth less than the purchase price.

1 Reply

@sozobe,

Quote:

Raise taxes on the richest (1 percent? forget now. but his current proposal.)

Cut pork.

Close loopholes.

Make things more efficient. Staff agencies with qualified people instead of cronies.

Start slow, and then as things improve, do more.

Ya big Commie!

0 Replies

@cicerone imposter,

C i
It is addressed to others not not personally to you( I know thro these forum)
If the system is effective there should not be a begger on the street and a homeless under the bridge of NY.
If the financial system is perfect and some silly ignorable mistakes had taken place like the one we are watching amidst enormous show and pomp and money-oriented election, then as a die hard critical person i wish that financial system should face the consequence and the silly government should not stoop to such a low ebb uphold Karl marx's subsidy or bail out.
Am I wrong?

1 Reply

@FreeDuck,

FreeDuck wrote:

I think buying up or renegotiating mortgages is actually a really good idea since it helps everyone. I can't for the life of me see why the mortgage companies (I don't think this is a traditional bank issue) haven't already done that, though.

They don't keep them. They sell them and then the folks who bought them sell them along with a bunch of other people's mortgages which happens over and over again until your one house is being mortgaged by tens of thousands of investors. There's no authority (or responsibility) of the original mortgage holder because your mortgage as written no longer exists. There's nothing to renegotiate.

3 Replies

@DontTreadOnMe,

DontTreadOnMe wrote:

Robert Gentel wrote:

...I'm all for pushing the real estate to rock bottom as fast as we can ...

but wouldn't that just keep the problem rolling? then you have even more people paying for a house that's worth less than the purchase price.

Seems like you'd have a few cycles of foreclosures and resales. People will lose their equity and banks will lose money until the prices hit their floor.

1 Reply

@JPB,

But the mortgage payment continues to the same bank you borrowed from (or the bank that took it over). In that respect, you can re-negotiate the loan - if and when the rates drop. It gets a bit confusing after that.

1 Reply

@JPB,

JPB wrote:

FreeDuck wrote:
I think buying up or renegotiating mortgages is actually a really good idea since it helps everyone. I can't for the life of me see why the mortgage companies (I don't think this is a traditional bank issue) haven't already done that, though.

They don't keep them. They sell them and then the folks who bought them sell them along with a bunch of other people's mortgages which happens over and over again until your one house is being mortgaged by tens of thousands of investors. There's no authority (or responsibility) of the original mortgage holder because your mortgage as written no longer exists. There's nothing to renegotiate.

Oh, I get how they resell and repackage and all that. But someone, somewhere, still holds the debt on your house and agrees to your repayment terms. Those people, you would think, would rather have some kind of payment than the house, so it would still be in their best interest to renegotiate it. Unless they really want to become massive property owners and landlords, that is.

2 Replies

@cicerone imposter,

sorta -- you can refinance your loan which in effect means paying off the original loan with a new loan SO LONG AS YOU QUALIFY FOR THE NEW LOAN. That's why we're in this mess...

1 Reply

@JPB,

I understand that; even people with good a credit rating can't find mortgage loans. Liquidity is at its lowest point as we speak.

0 Replies

@FreeDuck,

FreeDuck wrote:

Oh, I get how they resell and repackage and all that. But someone, somewhere, still holds the debt on your house and agrees to your repayment terms. Those people, you would think, would rather have some kind of payment than the house, so it would still be in their best interest to renegotiate it. Unless they really want to become massive property owners and landlords, that is.

Actually, I think this was part of the plan when real estate was over valued. They could buy at auction or take your property (equity and all) and then sell it for more. They DID want the property from many instances that I have witnessed.

I don't understand all of this at all. I still don't think anyone has explained in real day to day terms what it would mean if we don't front these companies 700 billion dollars. Can anyone tell me what it would mean to me if I woke up tomorrow and the government said "Thanks, but no thanks" to the bailout? How would my day change?

4 Replies

@squinney,

Well, anybody who has money deposited/invested in/through that institution is going to lose their nut, right?

1 Reply

@patiodog,

I don't, so why do should I care?

2 Replies

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