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Federal Reserve steps in to prevent financial meltdown
The Telegraph ^
| 3/17/2008
| Richard Blackden
Posted on 03/17/2008 1:48:03 AM PDT by bruinbirdman
click here to read article
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To: bruinbirdman
All of this seemed so inevitable. I remember reading a few years ago that something like 50% or more of mortgages in San Diego were ‘interest only’. How does that make any long term sense? As the economy worsens and the people living in those homes have trouble paying the interest only rent on homes, in which they have no equity, what are they going to do? I fear many will just walk away. We may have just seen the tip of the iceberg regarding defaults.
To: pieceofthepuzzle
Yes, many knew is it was coming.
But you see, we wanted to be kiiiiiiiiiind and incluuuuuusive, and divvvvvvvvvvverse and compassssssssionate and make it a politically correct "kinder/gentler" United States of America where EVERY MAN IS A KING, EVERY MAN OWNS A HOME, whether they can afford it or not, whether they are legal or not, whether they are honest (or the mortgage houses they would deal with) or not.
Now the chickens are coming home to roost on all of the interest only, subprime crap out there, and bring down the world economy as a result. But, hey, we were compassssssionate, right, and gave everyone a chance at golden altar of American Home Ownership.
3
posted on
03/17/2008 2:06:19 AM PDT
by
AmericanInTokyo
(The GOP serves a huge cr*p sandwich every 4 years to Conservatives, & sez "shut up!, no choice!")
To: bruinbirdman
It might be that ‘Prevent’ may be an overly optimistic word choice on the part of the headline writer....
Indicator: CNBC stayed ‘live’ all night, foregoing its usual fare of infomercials and Suze Orman reruns....
4
posted on
03/17/2008 2:08:16 AM PDT
by
Uncle Ike
(Sometimes I sets and thinks, and sometimes I jus' sets.........)
To: pieceofthepuzzle
"what are they going to do? "Those who bought for speculation are not in trouble.
Those first time buyers who had no down and interest only will go ack where they were - renting and still with no equity. They lost their house, or walked away from it; they didn't lose their job.
Those who sold and bought up and can't afford new adjusted payments, can, just, sell down. That's the way it works.
yitbos
5
posted on
03/17/2008 2:08:29 AM PDT
by
bruinbirdman
("Those who control language control minds." - Ayn Rand)
To: bruinbirdman
check out the markets in Europe...
6
posted on
03/17/2008 2:09:48 AM PDT
by
durasell
(!)
To: pieceofthepuzzle
That is exactly what happened. There is a thing called "jingle mail". You just fill out a form letter, enclose all copies of the keys of the home you are in, clear out, and then mail off the letter with the keys in the envelope, with no forwarding return address, and just skip town. Simply put, you just walk away from your mortgage, other obligations, taxes, etc. "Hey, **I** dont have to pay for this stuff!" is sadly, the low class, sub prime, irresponsible attitude out there, illegal aliens and (some) citizens alike. There are actually companies springing up advising people how to ditch their homes this way. It is almost like a whole bunch of overweight people shifting to the right side of a life boat moving away from the Titanic, even in light of the yelling and urging (not to do so) by others on the little boat. They will take us all down into the drink through their self-centeredness.
7
posted on
03/17/2008 2:11:21 AM PDT
by
AmericanInTokyo
(The GOP serves a huge cr*p sandwich every 4 years to Conservatives, & sez "shut up!, no choice!")
To: AmericanInTokyo
“Now the chickens are coming home to roost on all of the interest only, subprime crap out there, and bring down the world economy as a result. But, hey, we were compassssssionate, right, and gave everyone a chance at golden altar of American Home Ownership.”
This is the law of unintended consequences coming back at us in spades. Congress holds a good deal of responsibility for this as well. If I'm not mistaken, It was due to a lot of congressional arm-twisting that the banks/mortgage Co's developed these questionable products in the first place to be more “inclusive”. Now, most if not all of the industrialized world suffers from Congressional meddling into things they have no business meddling in.
8
posted on
03/17/2008 2:12:43 AM PDT
by
roaddog727
(BS does not get bridges built - the funk you see is the funk you do)
To: durasell
Been watching the markets move across the globe since Japland.
Check out DOW Futures!!
yitbos
9
posted on
03/17/2008 2:13:33 AM PDT
by
bruinbirdman
("Those who control language control minds." - Ayn Rand)
To: roaddog727
You have said it exactly as it is, there, r727. Yes, lots of jerks on Capitol Hill. Mostly Dems. Some Repubs, too, trying to be egalitarian and politically correct, but not very financially sound.
10
posted on
03/17/2008 2:15:02 AM PDT
by
AmericanInTokyo
(The GOP serves a huge cr*p sandwich every 4 years to Conservatives, & sez "shut up!, no choice!")
To: bruinbirdman
11
posted on
03/17/2008 2:15:33 AM PDT
by
AmericanInTokyo
(The GOP serves a huge cr*p sandwich every 4 years to Conservatives, & sez "shut up!, no choice!")
To: AmericanInTokyo; bruinbirdman; pieceofthepuzzle
I listened to parents who grew up in the depression, took Financial Peace University offered by Dave Ramsey and have lived will below my means for years and have investments/savings to prove it along with no consumer dept. I will weather the storm, no matter how bad, but 99% of Americans are in deep kimchi.
12
posted on
03/17/2008 2:15:59 AM PDT
by
SLB
(Wyoming's Alan Simpson on the Washington press - "all you get is controversy, crap and confusion")
To: pieceofthepuzzle
In Orange County, South of Los Angeles, and North of San Diego, people bought houses with 100 year leases on the land.
This is on the Irving Ranch properties near Newport Beach.
It has been 40 years ago since people have been buying such homes. So some people only have 60 years left on the leases on the land their houses (which they own) are on...
13
posted on
03/17/2008 2:19:22 AM PDT
by
topher
(Let us return to old-fashioned morality - morality that has stood the test of time...)
To: bruinbirdman
not good, not good, not good...
14
posted on
03/17/2008 2:19:33 AM PDT
by
durasell
(!)
To: AmericanInTokyo
15
posted on
03/17/2008 2:23:11 AM PDT
by
bruinbirdman
("Those who control language control minds." - Ayn Rand)
To: bruinbirdman
I thought for a moment you meant some kind of tax haven island in the Baltic Sea.
16
posted on
03/17/2008 2:24:16 AM PDT
by
AmericanInTokyo
(The GOP serves a huge cr*p sandwich every 4 years to Conservatives, & sez "shut up!, no choice!")
To: roaddog727
There’s a host of problems. It’s easy to say in retrospect that we needed more regulation in an already heavily regulated industry. There’s some of that, but at the same time, I trace a lot of this back to the collapse of the immigration reform bill last summer. A lot of people basically said that we can’t throw out a large fraction of productive but undocumented workers without replacing them in some sort of orderly fashion. It’s like Steve Irwin vs. the stingray - some situations need to be handled with care.
But all the purists couldn’t deal with the compromises needed in a democratic society and so here we sit.
17
posted on
03/17/2008 2:25:04 AM PDT
by
garbanzo
(Government is not the solution to our problems. Government is the problem.)
To: SLB
Congratulations. I see YOU TOO made a reservation at the Braidwood Inn. (credit to old John Candy movie)
18
posted on
03/17/2008 2:28:16 AM PDT
by
AmericanInTokyo
(The GOP serves a huge cr*p sandwich every 4 years to Conservatives, & sez "shut up!, no choice!")
To: AmericanInTokyo
"tax haven island in the Baltic Sea. " The wonderful place to retire, the tropical paradise, the heart of Exotic Micronesia, the beautiful Isle of Yap!!
yitbos
19
posted on
03/17/2008 2:32:34 AM PDT
by
bruinbirdman
("Those who control language control minds." - Ayn Rand)
To: pieceofthepuzzle
We may have just seen the tip of the iceberg regarding defaults. The issue is no longer hanging on individual mortgages but on the banks that are leveraged out. Bear Stearns got caught in a classic bank run and the open question is who's next and who's after that
Until confidence (yes as in con game)is restored the dominoes will continue to fall.
This is capitalism at it's finest
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