Posted on 08/25/2007 12:09:28 AM PDT by 2ndDivisionVet
Edited on 08/25/2007 10:13:31 AM PDT by Admin Moderator. [history]
bttt
You have no promise of tomorrow.
Even without religion that’s simply a fact.
Good point. WELCOME ABOARD!
But it is accurate to say the problems now are much more than just the subprime market. They may have started there - the schematic might look like: subprime, Alt-a, (bear stearns takes haircut) prime mortgage industry locks up, stock market turns on a dime, then commercial paper freezes up.
And this isn’t acknowledging the subprime exposure overseas which is considerable.
a lot of people are saying “screw the lender” actually, from anecdotal observation anyway. Loaning more than say 80 per cent of market value doesn’t make any sense. That way if the borrower defaults the lender doesn’t take a loss, or much anyway. And there are accounting devices and tax issues that come into play.
well - housing appreciation has been part of the attraction of homeownership in the US for many years. Truth is most people don’t want a lot of money or at least arent willing to work for it, they are deathly afraid of the stock market because they don’t understand it. You might say they are stupid, and some undoubtedly are, but a house means a place to live and in the past a dependable source of income or equity. It takes guts and hard work to be successful in real estate but undoubtedly there is at least one guy out there livin large at a fully paid house that is the net proceeds of a dozen 0 percent down credit cards and a few savvy flips at the height of the bubble. But even staid Americans have traditionally used the gently rising housing market as a sensible way of making money.
Agreed. It’s very difficult to learn from one’s mistake if you don’t pay a price.
So after taxes rise so that the Federal Government can afford to bail out people whose wages rise insufficiently to pay terrible mortgages, who bails out citizens who cannot afford their taxes, food, and housing expenses simultaneously even if their incomes rise? This sounds like a way to get aboard an endless cycle, and only the banks win.
START
Some people get unreasonable mortgages from banks.
Banks threaten to foreclose on people who cannot pay mortgages.
Federal government pays some people to pay banks for mortgages.
Federal government raises taxes on ALL citizens.
Citizens cannot afford to pay taxes, food, and previously “affordable” mortgages; many employers cannot pay both taxes and wages to citizens, who consequently lose their jobs, making their mortgages unaffordable.
RETURN to START and REPEAT.
Then we have the ancillary effect of people purposely getting unaffordable mortgages because they know that the Federal government will give them money to pay that mortgage. If this phenomenon happens with sufficient frequency, then we effectively untie the nominal price of housing from the costs of obtaining it to many/most citizens. This dichotomy currently afflicts the medical industry, where people get health care, but employers and government agencies (mostly) pay for it. This disconnect worst afflicts those somehow ineligible or unable to pass their cost burden to a third party.
We do NOT want to go down this road, folks; followed to its logical conclusion, it leads to “socialized housing,” wherein everyone resides in the “projects,” howsoever the government tells them to live.
Well, I guess as a form of very-low-return forced savings housing is an "investment".
But that bears no comparison to the insane housing bubble of 2001-05.
When the value of Krugerrands, Beanie Babies, or tulips goes stratospheric, the average prudent J6P's life is not seriously affected.
But when 1500 square foot houses in middle class neighborhoods start getting bid up to the point where it takes an 90th percentile income to afford one (without a toxic mortgage), we are talking serious damage to our way of life.
Good points. I suspect it’s also an opening for the left to demagogue as if the “RICH” Republicans aren’t in touch with ‘the people’ and need to be kicked out so someone who is more in tuned can take over.
Thanks. And good for you and good for your adult kids. That’s the right track IMO.
Well that’s all rather relative. Interest rates today are quite low by historic standards.
It’s sort of like the guy who gets things done. Because he does, he’s always the one asked to do more. Since you’ve been so good at paying yours, pleae step in and pay theirs...
The government will be tempted to take your tax dollars and bail people out. I just think it’s a bad idea.
Thank you.
Your exactly right IMO.
Rates are too high relative to other rates in the yield curve. And as far as history goes, what period are you talking about? I have a daily history of funds rates going back to 1954 in my other browser window.
Try looking at the rates around 1977 forward. If those rates are in fact lower than today, I’ll be very surprised.
Why choose one of the most inflationary periods in our country’s history? If one looks at the entire history of our country a 5% rate is very high. Nonetheless, a current indicator of market rates should be used to determine the funds rate, not historical.
Thanks for the response. I think your overall point is valid as far as how that period applies. It was long enough to cause severe problems though. It’s certainly not something that should be shoved under the rug.
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