It wasn't Bush, after all, it started with Clinton

The great majority of subprime loans were originated during Bush's failed Presidency. It was his responsibility to react to financial problems developing on his watch. Once again, he's trying to dodge taking responsibility for his failure to protect the American economy just as he's failed in every other area. Don't think he's failed? Look at how McCain is trying to distance himself from the worst President i9n history.

 

He warned congress in 2003... the democrats blocked regs on freddie and fannie...

Nice try.

 

Effective Presidents don't warn. They deliver. Bush failed.

 

You must be wrong! According to TinyTim and others, it's all the democrat's fault. :laugh: :laugh: :laugh:

 

Yet another claim of your's that has been completely dismantled. You have ignored the challenges to your false claim, because you can't debate them. You have to disappear, and surface somewhere else with the same lie.

 

The legislation the Dem's passed had nothing to do with the sub-prime markets and the creative bankers who created ARM's and balloon loans.

I think you're preaching to the choir Rev...

 

Isn't democracy grand? :thumbs:

 

You missed the picture, Fannie and Freddie are who make sure the "average Joe" got the loan. Joe wanted to pay the loan but George paid his company to send his job overseas. So yes, now the problem is back on average Joe but it is not his fault, he just wants a job and he'll pay that loan...

 

Gee, my job went to Mexico under Clinton.....

Don't get me wrong, praise God for the challenges & opportunities this created. But my job went to Mexico under Clinton.

 

The problem is that too many "average Joes" were given loans in spite of the fact that their credit history was "stinko." In the name of boosting minority ownership, the government (that is us) will end up owning the houses, and the next time, someone will have to have at least a 680 credit score to score a loan.

Jobs go overseas when it is profitable to operate there--and some weird things can happen. We lost two huge tire plants, one in our town and one in another state.

In both cases, these plants, because of union work rules and the union refusing to cooperate on increased automation at their plants. The production was sent to a plant where the union agreed to maximum automation. Now, was this plant some kind of 3rd world, no-union, backwater? No, the plant is in France. Company officians told all three union locals (two in the US, one in France), that if they did not get cost savings, they would take the production elsewhere. The American unions balked at cooperating, the French union smelled the coffee (as did a NON-union plant with the same company in the states). Because of this automation, the American NON-union plant and the French plant were able to produce the product with 25% less costs.

The companies are not sending jobs overseas, American labor unions are.

 

These are called sub-prime loans and were not part of the legislation the democrats passed.

My brother whose credit record stunk got a loan at 14%. This was not a FHA backed loan, it was sub-prime. He walked away from the house after a few years because, well, who can afford 14% interest. I don't feel bad for the bankers nor do I think we should bail the banks out because why would they make a loan like this? This had nothing to do with the Dem's legislation. The legislation didn't say get stupid.

 

There are two sides to this statement. When you see CEO's getting more Millions in bonus than they get in salary you have to wonder did the jobs have to go overseas. One of those millions can employ many production workers at fairly good pay. In some cases (clearly not all) the unions are right and the companies can afford to do more for the employees.

 

If the credit card "stunk" he shouldn't have signed the contract to use it. If he couldn't pay the 14% interest on the home mortgage he should not have signed the contract agreeing to pay it. He is responsible for his bills - not you, not me, and not the tax payers.

Likewise, if your brother "walked away from the house" then the lender got stuck with the consequences of making a high risk mortgage which is probably why it was at 14% interest. If they'd done their homework they wouldn't have loaned the money to start with even at this high rate. The lender is responsible for his loss - not you, not me, and not the tax payers.

Neither party - the borrow or the lender - is entitled to a "bailout" for their poor judgment or bad faith. Doing so is completely unfair to the vast majority of borrows and lenders who fulfill their contracts without issue.

This is fundamental to the American way. Why is this so difficult for people to understand?

 

You are, of course, literally correct. A lot of people don't like the extremely high salaries paid the top executives. We also don't like the even greater salaries paid to entertainers, professional athletes, and others. However, they all get what the market provides and competition drives up the salaries and benefits. We buy there goods and services, we watch their performances and even worship some of them, and we pay for it all because we want what they make.

The same thing happens with lower level workers as well but just not for as much money. As a matter of fact I think some of the wages we pay at the lower levels are too high for the work received. Based on the lack of service received in some business I think the minimum wage is too high for many!

What's the answer? Do you think it's right for the government to put a cap of what a person can earn? Is that what we should do? Who decides and at what level is the cut off? What is the basis for determining the "value" of a person's contribution to a private enterprise. Suppose they own it outright?

The system isn't perfect. It does permit abuses but to regulate it invites far more problems than solutions and threatens us all. The next step is price and wage control for everyone and everything.

 

In the area where I live, unions have closed several large plants, taking away several thousand jobs. Some of these went overseas, and some to non-union plants.

I grew up in a UMWA household, when unions were fighting for their lives, literally.

However two years of working in upper-level management in a union plant changed my mind completely.

 

This is what I meant by two sides to the story. Likewise, the bank should have lent the money. Now my brother has the bad ding on his credit record and has tried to go bankrupt but was instead forced to take a credit rehab class. I think likewise, the banks ought to accept the consequence of their stupid mistakes as well..

 

I wrote that in the paragraph immediately following the one you quoted!

 

What's your problem. Can't you ever discuss issues without attacking the other person?

What I posted is fact. Prove me wrong instead of shooting off your mouth for a change.


Despite the risk associated with these subprime mortgages, many mortgage lenders further relaxed their underwriting standards and in the process introduced even more risk into the system, some of it motivated by fraud and misrepresentation.

As a consequence, the availability of risky loans soared from the late 1990s through 2006. In 2001, newly originated subprime, Alt-A, and home equity lines (seconds) totaled $330 billion and amounted to 15 percent of all residential mortgages. Just three years later, in 2004, these mortgages accounted for almost $1.1 trillion in new loans, equal to 37 percent of the total. Their volume peaked in 2006 when they reached $1.4 trillion and 48 percent of the total.[2] Over a similar period, the volume of mortgage-backed securities (MBS) collateralized by subprime mortgages increased from $18.5 billion in 1995 to $507.9 billion in 2005.[3]


Although most home loans do not fall into this category, subprime mortgages proliferated in the early part of the 21st Century. About 21 percent of all morgage originations from 2004 through 2006 were subprime, up from 9 percent from 1996 through 2004, says John Lonski, chief economist for Moody's In¬vestors Service. Subprime mortgages totaled $600 billion in 2006, accounting for about one-fifth of the U.S. home loan market[1].

Credit rating agencies are now under scrutiny for giving investment-grade ratings to securitization transactions (CDOs and MBSs) based on subprime mortgage loans. Higher ratings were believed justified by various credit enhancements including overcollateralization (pledging collateral in excess of debt issued), credit default insurance, and equity investors willing to bear the first losses. Critics claim that conflicts of interest were involved, as rating agencies are paid by the firms that organize and sell the debt to investors, such as investment banks.[77] On 11 June 2008 the U.S. Securities and Exchange Commission proposed far-reaching rules designed to address perceived conflicts of interest between rating agencies and issuers of structured securities.[78]

 

Congress is besides themselves this early morning with their "solution" to this "problem"!

FoxNews wrote that: "The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price."

Congratulations America! Your Congress and your President are about to stick you with $700 billion of bad debts that other people - not you, me, or most taxpayers - created. They've succeeded in making this "emergency" seem so critical as to require "immediate" action without explanation to the public they serve. Not one person in ten-thousand could even explain what it's all about much less how it's going to work. "We've got to act," they've cried and act they have by stealing our money again.

The winners are the borrows and lenders who made bad deals and couldn't keep them and maybe even had no intention of keeping them. Now those of us that borrowed within our means and paid our bills on time get to pick up the tab - probably about $10,000 each - for the losers that didn't. Does that bother Americans?

We don't to worry about whether we want to invest in low, moderate, or high risk stocks on the market because they're going to take your money and "invest" it for you in the lowest grade paper on the street right now. What an absolute rip off of hard earned money!

The lenders who've run their business well now get to watch their sorry competition get bailed out for taking excessive risks. That should be an incentive to do the right thing!

The Republicans are just about as worthless as the Democrats in all this! These jerks and idiots in Washington will use our money to further their social re-engineering experiments by giving assorted breaks to people based on factors other than their credit worthiness.

This is socialism - not capitalism!