Margin Call on America

[Jennifer]

I think that is a bit misleading, CC.  Real Estate does not factor into GDP.

As for the government making a profit on the land, I would have slightly less problems with the government offering a prime +2% mortgage to anyone who can muster 30% down on a home and if they want better terms (and those terms kinda suck if you have even moderately good credit) you can go to a private bank.  This way at least there is a safety net for people who screwed up when they were younger, but it’s also a halfway safe bet for the taxpayers.

ST, I’m glad you made insane profits on your home.  I did too (purchased in 2001, currently worth 125% what I paid for it.) But that does not mean it is right.  The housing market CORRECTION bringing prices back in line with reality of their actual worth, not their speculative worth, can only be a good thing for people.  As housing prices return to normal, more families will be able to afford them, more families living in owned homes mean they will slowly build up equity instead of “pissing into the wind” their income on rents.

This is especially important because of the false promises of the New Deal which, in essence, was a statement from the old government that government will be your mommy and your daddy and take care of you in your old age and this will pay you back dollars for the pennies you put into the system. (ie Social Security, Medicare, Medicaid, etc.)  Unfortunately, we are liable for them now, we promised, and the fools actually think they are collecting THEIR OWN money back, not pilfering the pockets of their grandchildren.

As these programs go into bankruptcy (latest estimate was 2042 according to Money Magazine last June, before then it was 2015 but some legislation was changed extending the time) and with Switch’s very good point about boomers (who won’t get what they thought they were going to get in Social Security) plundering their 401k plans, and other mutual funds and stocks driving the stock market down, homes will be the only form of retirement savings.

I, for one, plan to pull my assets out of the market in Jan 2013 (I need them for the end of the world party debts I’ll have when the world does not end in 2012!).  FDIC savings accounts, even at a mere 0.0005% savings return, will pay better than the market at that time and we’ll have a REAL depression on our hands. (Maybe I’ll invest in pawned gold instead….)

[Obergruppenfuhrer]

I have to agree with Cmdr Jennifer on multiple points here. Companies that gambled need to go under and their assets divided among those that haven’t. The government is bailing out too many companies here. The LAST thing we need is our taxes wasted on bailing out corporate idiots that deserve the grave they dug. That goes to back up our currency value and national debt as she mentioned.

After a couple major recessions, the government is quick to react soely out of fear when they think another one may be coming. This countries economy has an incredible ability to bounce back into the stratoshpere from the depths of hell. Being a former Senior Loan Officer, I’m all too familiar with these trends and how they affect the market. I can’t believe AIG is going under, (if I’m correct there). I’ve worked with them so many times. Fanny Mae deserves the slow death along with any other company that has relied on gambling and greed above client retention for so many years.

I don’t know how to explain this countries buoyancy. I could guess that in a nation where consumerism is SO powerful, money pours like rain and then dries up. When it rains, it pours though. I’m beginning to think we are digging a grave we cannot fully come out of. That’s my fear at least.

[Jennifer]

Ober:

I believe AIG’s bailout is already a done deal.  However, as an INSURANCE group, you would think that would be one industry that COULD go under without significant impact on the daily lives of people.  (emphasizing, not yelling.  Maybe I need to use italics in the future.)

Here’s how I see the fall out of AIG going under, if it had been allowed too:

Insurance policies are still in effect for 90 days, backed by the US Government and only to give the customers time to find replacement insurance somewhere else.

The myriad of other insurance companies quickly gobble up the lucrative insurance contracts.

Status quo is restored.

Who is harmed?  AIG executives who made bad decisions.  I believe, could be wrong, but I believe that AIG got into trouble because they invested in Mortgage Backed Equities (ie, they bought up sub-prime mortgages off other banks and mortgage brokers) because the interest rates were high (but so was the risk, which people fail to remember.)

Fannie and Freddie should have gone under decades ago, in my most humble of opinions.  There is just something fundamentally wrong with a semi-private, semi-public company (government/citizens own it.)  I just don’t see how that could work - and I seem to be supported by its failure.  I know that the Clinton and Bush administrations both attempted to put regulatory control over Fannie and Freddie (1997, 1999, 2003 and 2005 for each respective executive) and legislators blocked it each time.  So it appears that even those who would know, knew something was wrong with those companies, and knew before the housing bubble.

How should we protect people from Fannie/Freddie collapsing?

As for the government making a profit on the land, I would have slightly less problems with the government offering a prime +2% mortgage to anyone who can muster 30% down on a home and if they want better terms (and those terms kinda suck if you have even moderately good credit) you can go to a private bank.  This way at least there is a safety net for people who screwed up when they were younger, but it’s also a halfway safe bet for the taxpayers.

And let Fannie/Freddie go under.

[Obergruppenfuhrer]

@Cmdr:

I think that is a bit misleading, CC.  Real Estate does not factor into GDP.

As for the government making a profit on the land, I would have slightly less problems with the government offering a prime +2% mortgage to anyone who can muster 30% down on a home and if they want better terms (and those terms kinda suck if you have even moderately good credit) you can go to a private bank.  This way at least there is a safety net for people who screwed up when they were younger, but it’s also a halfway safe bet for the taxpayers.

ST, I’m glad you made insane profits on your home.  I did too (purchased in 2001, currently worth 125% what I paid for it.) But that does not mean it is right.  The housing market CORRECTION bringing prices back in line with reality of their actual worth, not their speculative worth, can only be a good thing for people.  As housing prices return to normal, more families will be able to afford them, more families living in owned homes mean they will slowly build up equity instead of “pissing into the wind” their income on rents.

This is especially important because of the false promises of the New Deal which, in essence, was a statement from the old government that government will be your mommy and your daddy and take care of you in your old age and this will pay you back dollars for the pennies you put into the system. (ie Social Security, Medicare, Medicaid, etc.)  Unfortunately, we are liable for them now, we promised, and the fools actually think they are collecting THEIR OWN money back, not pilfering the pockets of their grandchildren.

As these programs go into bankruptcy (latest estimate was 2042 according to Money Magazine last June, before then it was 2015 but some legislation was changed extending the time) and with Switch’s very good point about boomers (who won’t get what they thought they were going to get in Social Security) plundering their 401k plans, and other mutual funds and stocks driving the stock market down, homes will be the only form of retirement savings.

I, for one, plan to pull my assets out of the market in Jan 2013 (I need them for the end of the world party debts I’ll have when the world does not end in 2012!).  FDIC savings accounts, even at a mere 0.0005% savings return, will pay better than the market at that time and we’ll have a REAL depression on our hands. (Maybe I’ll invest in pawned gold instead….)

I could have sworn I loathed seeing your posts at one time. Not anymore. Especially after reading your quote. But I won’t even use the “P” word in this forum.

[Obergruppenfuhrer]

@Cmdr:

And let Fannie/Freddie go under.

I fought with those companies for 2 years doing mortgages. For larger mortgage companies, they were involved in some of the shadiest paper work and most hidden fees I’ve ever seen. It took our President 3 days to finally get an explanation from them for a 7000 fee they were trying to hide from a homeowner I was trying to bail out. Let their ships sink at last. They should have been done SO long ago it’s revolting.

[Imperious Leader]

The worst was countrywide. no question. Crook company. They had no shame and no problem with throwing out old ladies who were a day late or an hour late paying what could have saved their homes. And that company was run like a Jim Jones Cool-Ade stand. Thank god it went under and got its just reward.

[Jennifer]

Yea, I really dodged a bullet when I used the Soldier’s and Sailor’s Relief Act to force Countrywide to let me refinance early with Harris Bank.  (All you have to do as an enlisted soldier is prove that you could save as little as a penny or more in the deal and they are obligated to let you move!)

I don’t know.  I’m sure there are some on the boards who will hate me for this statement, but I just don’t care.  If you run a company and you make poor decisions and people chose to invest in your company anyway, then - assuming you did not LIE to them, which is a criminal offense - then perhaps when the company goes under it is justice?

Is it not the tenement of capitalism that when one company goes bankrupt, there are five companies in the wings ready to gobble up the market share no longer being serviced by that company?

For instance, let us pretend that United Airlines declared bankruptcy and was forced to liquidate their assets.  Now, this would be horrible for stock holders, but then United Airlines has been flirting with outright liquidation for decades so it is no secret it could happen at a moment’s notice.

Now, do you think all those customers would no longer be serviced?  Of course not!  Southwest Airlines, American Airlines, British Airways, Lufthansa, etc will pick up the slack, and with the increased customer base, they would probably purchase many of the planes at used prices meaning the debt owed by United to Boeing for the planes they are leasing would also be repaid.

Why cannot we use the same feature for the mortgage industry?  I would, of course, agree that families living in homes be given the option to lock in their interest rate where it is now (and the banks would agree, because 5% is still higher than foreclosing and selling the home at a 40% loss).

---

BTW, as for Countrywide, I picked up some of it’s stock cheap and took a bath when it converted to Bank of America.  So I’m not infallible in my picks.  I will mention, however, that so far I’ve profited every quarter (my gains > my losses) except when it came to that stock.

[Obergruppenfuhrer]

@Imperious:

The worst was countrywide. no question. Crook company. They had no shame and no problem with throwing out old ladies who were a day late or an hour late paying what could have saved their homes. And that company was run like a Jim Jones Cool-Ade stand. Thank god it went under and got its just reward.

Countrywide is the EXACT company I battled for 2 years doing loans and trying to help old and middle age people save their homes from foreclosure and get them out of debt. The 30/60/90 day late hits on their credit report Countrywide would do for being even a day late. They did that so they could pin them up against a wall by harming their credit. Countrywide would stall on giving us paper work they were required to provide by law, then call my clients up and use scare tactics to try and keep them in their awful situation. I literally was at war with those people for 2 years. I’m so glad I don’t do that anymore. (I’m broke) but who cares. I don’t have an ulsur. Peace of mind was something all the money I was making never gave me. People were so screwed over by that company, they’d call me at every hour on my cell, even during Christmas to see how their refinance was going. I felt so strongly for them I never took a day off from work really. I’d go to their houses at any hour with coffee to talk to them about a plan to help save their homes. It was SO stressful.

[Imperious Leader]

Yes of course that’s because Countrywide is the Anti-Christ… a modern day Bank of America robbing from the poor to steal money for its plutocratic clique interests.

AS they say in used cars: the movie… “you gotta nickle and dime them”.

One of my friends was telling me they forces the employees to maintain Pom Poms at their desk, so they can do what they call Raw Raw events, like that Hideki Tojo inspired raise your hands after they announce some drummed up propaganda about passing # 5 or whatever in the mortgage business, when the reality is they just gave crazy loans to people who cant even buy a banana, knowing it would default… they didn’t even need a social security card to buy a house. They sent people to canvass uber poor neighborhoods to find people willing to borrow money.

They used to have this company that’s is an outright fraud called Prime America It was staffed by the biggest losers imaginable and the company basically took in people as insurance salesman as long as they had two legs. I remember taking the series 6 and the room had only like 2 people each from Prudential and Metlife, and like the other 96 people were Primeamerica rejects. I eventually worked for Metlife when i was real young and it just seems they ( Prime America ) just took anybody to work for them because the flood of people leaving was greater than flowing in. Its the same thing in Countrywide. People are basically holding that job while the entire time they are looking for a real job somewhere else.

[Obergruppenfuhrer]

Oh god imperious, those company names you mentioned make me shudder. BAD memories of fighting those devils off the poor.

[Jennifer]

Is that not kind of the reason we need government oversight on private companies?  That way the same people policing the organization do not also own, run and manage the organization?

That’s what really scares me about the buyout of the semi-federally run Freddie and Fannie.  It just seems wrong on so many levels to have the police and the criminals be in the same family, you know?  How many times has someone let a detective who is the brother of the accused murderer be the lead investigator?

As for “Bank of America” I have a few issues with them as well.  They don’t require proof of citizenship or residency before opening credit cards for members.  I don’t mind them opening savings and checking accounts, but credit cards are valid forms of ID for US Government business. (it is a second ID, but it is still a valid form of ID!)

[Imperious Leader]

They don’t care as long as they get the account, national security and whether the citizen is American or not be dammed.

B of A should be called “Bank of foreigners who just showed up unexpectedly”

They are always the first to invent a new fee, first to charge more for the same service, first to raise loan rates, first to lower yield rates, first to change the rules midstream, first to make banking as less personal and automated, first to impose all sorts of “were holding your check for X days”, first to basically deny anybody who has a check from another party made out to the branch your cashing the check, but deny you access to funds because you don’t have an account with B of A, then actually have the trepidation to ask you to open an account so you can access the funds. Anything possible to shaft anybody.

[Obergruppenfuhrer]

This is a good little support group. ::Raising hand:: I …um. HATE …Wells Fargo. There I said it. I hate them.  :-)

[Imperious Leader]

What did they do?  examples…

[Jennifer]

So just curious, but WorldCom resulted in Perp Walks, Enron resulted in Perp Walks, Martha Stewart Gate resulted in perp walks.  Where are the perp walks for fannie mae and freddie mac now that they’ve bilked the American people out of 700 billion dollars and collecting 100 million in personal income while cooking the books???

[italiansarecoming]

im not american but how good is your health care o offense is it cheaper sicne you dotn pay with taxes?
id liek to know this from an american view because me and many fellow canadians think you gus pay $50 000 on a broken leg $500 on a box of pills
so please set this straight for me

[Jennifer]

I pay $4,320 a year for full health, dental and vision coverage for my two children, husband and myself.  It covers everything.  100% generic prescriptions, 1 visit a year for vision check up, 100% dental (includes all crowns, bridges, orthodontics, cleanings etc) and it covers all but $5/copay on name brand prescriptions.

Honestly, any program offered is worse than the one I have currently.  There’s no way any government could do better, IMHO.  Especially since my $4,320 a year is tax deductible (meaning my taxes are lower and my EITC - earned income tax credit - usually offsets this amount by a lot, especially when my mortgage shield is in place.)

BTW, that plan is Blue Cross/Blue Shield (huge name brand, recognized in every state of the union at least, I think internationally too) and is NOT EMPLOYER PROVIDED!  This is just a private citizen calling the insurance companies and working out a deal all by herself, just like any schmuck could do.

[italiansarecoming]

OH! I still like are way better sorry :-o.
i think that if you are american thats good but if your canadian we would say it sucks so im gonna say ntohing no comment

[stuka pilot]

@Cmdr:

I pay $4,320 a year for full health, dental and vision coverage for my two children, husband and myself.  It covers everything.  100% generic prescriptions, 1 visit a year for vision check up, 100% dental (includes all crowns, bridges, orthodontics, cleanings etc) and it covers all but $5/copay on name brand prescriptions.

Honestly, any program offered is worse than the one I have currently.  There’s no way any government could do better, IMHO.  Especially since my $4,320 a year is tax deductible (meaning my taxes are lower and my EITC - earned income tax credit - usually offsets this amount by a lot, especially when my mortgage shield is in place.)

BTW, that plan is Blue Cross/Blue Shield (huge name brand, recognized in every state of the union at least, I think internationally too) and is NOT EMPLOYER PROVIDED!  This is just a private citizen calling the insurance companies and working out a deal all by herself, just like any schmuck could do.

You’re gettin ripped off. My coverage is better and cheaper. Tough luck.

[Jennifer]

Are you sure it’s better and cheaper?

That’s the major problem.  With a universal coverage plan everyone’s policies seem better and cheaper on paper, but then why would large numbers of people from universal coverage plans come to nations without them to get medical treatment?  Perhaps it is better and cheaper to keep what we have?

As my doctor says when you complain about being ill, if it is not broken, then don’t fix it.  The system is currently not broken.  And if it is broken, it’s because many people think they need a plan from a government or corporation.  Since all health care is already tax deductible, why not just make it tax deductible with a $3,000 individual/$5,000 family stipend instead?  Then if you don’t want healthcare, you get extra cash, if you do want it, you can go buy it from another state or agency instead of being locked into what is offered locally.

For criminy, I live in the most heavily taxed area of the country, if I can afford health care for an entire family for less than $5k a year, and we have really awesome coverage since EVERYTHING IS COVERED, yes, if you get a bloody nose, and go see an ear nose and throat specialist, it is covered!, then everyone can.