Yess!!!!!!!!

SolidSqual

In the spirit of not saying anything political, let me just say YEEEEEeeeSSSSsss!!!!!! Muhahahahahah Wooh hooh!!!!!!!!!! If you agree with my point of view, then you understand my utter joy.

Have a great rest of the day!:D:D:D:D:D:D:D:D:D:D:D:D:eek::D:D:D:o:o:o:o:o:p:p:cool::rolleyes::rolleyes::eek::):):);););):D:D:D:D:D:D:D

BIZILL

i wish you would share them drugs.

and one more thing, how on earth can my post count still be so damn low?

Danny Tse

SolidSqual wrote: »

In the spirit of not saying anything political, let me just say YEEEEEeeeSSSSsss!!!!!! Muhahahahahah Wooh hooh!!!!!!!!!! If you agree with my point of view, then you understand my utter joy.

I agree

BaggedLancer

Agreed.

hoosier21

I see it now, thank you thank you thank you

zingo

...;)...

goingganzo

rember puff puff pass

Jstas

OK, I'm missing something here.

treitz3

*exhale*

You sure are. Here you go.

wz2p7j

Must have been "short" instead of "long" in the market today, eh?

AsSiMiLaTeD

Yessss indeed...

hoosier21

U.S. House Rejects $700 Billion Financial-Rescue Plan

SolidSqual

We're not out of the woods yet fellow polkies . . . the Wicked Witch of Washington and her monkeys will strike again if the minority lollipop kids and their new found allies don't stick to their lollipops. Also, who knows what the Wizard of OZ has planned in his White Castle.

There can be no doubt that today was a victory for the munchkins and a sign of real hope that even monkeys can stretch across the corn rows and do what's right for Munchkin Land.

In other news when the Scarecrow asked the Lion and the Tin Man to draw straws on the matter, the Tin Man, the greater thinker he is, tepidly supported the Witch and monkeys' plan, which essentially amounted to not taking a straw at all. The Lion by contrast speaks with a lot of heart but doesn't seem to be grasping the real threat posed by the Witch and her Monkeys.

wz2p7j

Hopefully come Thursday the, uh, monkeys will come to their senses and pass something that will free up credit to the, uh, business owners (me) so we can keep some, uh, munchkins employed.

shack

wz2p7j wrote:

Hopefully come Thursday the, uh, monkeys will come to their senses and pass something that will free up credit to the, uh, business owners (me) so we can keep some, uh, munchkins employed.

You must be one of those "wall street fat cats" that the munchkins think this plan was designed for.

BaggedLancer

Since I'm young and ignorant a bit on politics, can someone clear this up for me. I'm against this bill because I'm under the belief that this bill is designed to essentially bail out people who purchased homes far above their means on poor loans(such as an 80/20) with little to no money down.. Basically these people dug themselves so deep into a hole, they can't afford their house and therefore get foreclosed on because they can't pay the mortgage. Now, that being said, should this bill eventually pass, the people who pay their mortgages on time because they purchased intelligently are now going to be footing the bill for the people who don't pay their mortgage. What incentive does this leave this honest people who pay their mortgages on time to continue to pay on time? Should it pass and I had a mortgage, if my assumptions were correct I'd just stop paying and let the government bail me out.

Am I right or do I have this all wrong?


Better plan:

Take that $700 billion, give $2million to each tax paying american and let them pay off their mortgage and bail themselves out. Let the institutions crumble.

Dennis Gardner

Simple repeal of the "mark to market" should stabilize enough for the needed cleansing........

wz2p7j

Shack - I'm a small business owner with 4 employees and am scared. The economy has really hurt my business but I am surviving. From time to to time, I need to borrow small amounts of money to keep things going. It's hard to get money right now. I don't tell my employees as I don't want them to panic-they are probably against the "bail out" plan. Little do they know how close I am to closing the business and those guys will be out on the street. Everyone thinks this about "fat cats". The fat cats caused the problem - the "skinny cats" are also suffering now. Chris

shack

Baggedlancer wrote:

Since I'm young and ignorant a bit on politics, can someone clear this up for me. I'm against this bill because I'm under the belief that this bill is designed to essentially bail out people who purchased homes far above their means on poor loans(such as an 80/20) with little to no money down.. Basically these people dug themselves so deep into a hole, they can't afford their house and therefore get foreclosed on because they can't pay the mortgage. Now, that being said, should this bill eventually pass, the people who pay their mortgages on time because they purchased intelligently are now going to be footing the bill for the people who don't pay their mortgage. What incentive does this leave this honest people who pay their mortgages on time to continue to pay on time? Should it pass and I had a mortgage, if my assumptions were correct I'd just stop paying and let the government bail me out.

Am I right or do I have this all wrong?


Better plan:

Take that $700 billion, give $2million to each tax paying american and let them pay off their mortgage and bail themselves out. Let the institutions crumble.

You are all wrong. This plan gets capital back into the financial institutions so they can continue to lend to guys like wz2p7j. When banks lose money on bad loans they take losses first against income, second against reserves set aside for bad loan losses and then finally against their capital. When they run through the capital...they must raise more through stock sales, asset sales, bond issuance...and if not they are insolvent and the govt must step in and clean up the mess. The so called bailout plan is merely an asset purchase by the government to put capital back into the financial system. Very little of the bill had to do with people keeping their homes. It was not a part of the original plan by Paulsen and Bernanke. The Dems insisted that it become part of the plan to warrant their support.

Bank failures are not cheap for the FDIC and or the treasury. A couple of big ones could run through 700 Billion in short order...with little opportunity to recoup any of the money spent to bail the individual banks out.

Norm Apter

wz2p7j wrote: »

Shack - I'm a small business owner with 4 employees and am scared. The economy has really hurt my business but I am surviving. From time to to time, I need to borrow small amounts of money to keep things going. It's hard to get money right now. I don't tell my employees as I don't want them to panic-they are probably against the "bail out" plan. Little do they know how close I am to closing the business and those guys will be out on the street. Everyone thinks this about "fat cats". The fat cats caused the problem - the "skinny cats" are also suffering now. Chris

Chris,
Maybe I shouldn't speak for Shack but I think that Shack was ridiculing those who felt that this was just about protecting the fat cats on WS. If you look at his posts in the other thread dedicated to this, you'll see he has a much broader systemic view of the crisis. I think that you and your experiences, as a small business owner, underscore his point.

wz2p7j

Norm - thanks, I suspected Shacks humor but just wanted to point out the plight of the little guy. Chris

BaggedLancer

So Shack, what are really paying for then? This money goes back to the lenders, people keep getting bad loans and defaulting because of irresponsibility, and this money is blown through as well? I don't really understand, it sounds like attempting to put out a fire with fire.

I've been looking at houses to buy recently and I really don't want to make a bad decision on the loan, I just want to understand better what I'm getting myself into before I sign the dotted line.

SolidSqual

Norm Apter wrote: »

Chris,
Maybe I shouldn't speak for Shack but I think that Shack was ridiculing those who felt that this was just about protecting the fat cats on WS. If you look at his posts in the other thread dedicated to this, you'll see he has a much broader systemic view of the crisis. I think that you and your experiences, as a small business owner, underscore his point.

+1 on this. Shack is a fairly thorough thinker.

My major issue is that the bailout plan empowers those who created the problem to go ahead and fix it. If they couldn't do it right the first time, why should we trust them now?

Consider this Purpose Statement of the bill:

"Provides authority to the Treasury Secretary to restore liquidity and stability to the U.S. financial system and to ensure the economic well-being of Americans. "

I went to war with my Con Law professor over this statement. In my mind, it essentially says the treaury secretary can do whatever he wants to shape the economy as he sees fit. Where's the checks and balances? What about the powers of Congress and the President? This legislation is practically an amendment to the Constitution.

Norm Apter

BaggedLancer wrote: »

Since I'm young and ignorant a bit on politics, can someone clear this up for me. I'm against this bill because I'm under the belief that this bill is designed to essentially bail out people who purchased homes far above their means on poor loans(such as an 80/20) with little to no money down.. Basically these people dug themselves so deep into a hole, they can't afford their house and therefore get foreclosed on because they can't pay the mortgage. Now, that being said, should this bill eventually pass, the people who pay their mortgages on time because they purchased intelligently are now going to be footing the bill for the people who don't pay their mortgage. What incentive does this leave this honest people who pay their mortgages on time to continue to pay on time? Should it pass and I had a mortgage, if my assumptions were correct I'd just stop paying and let the government bail me out.

Am I right or do I have this all wrong?


Better plan:

Take that $700 billion, give $2million to each tax paying american and let them pay off their mortgage and bail themselves out. Let the institutions crumble.

Mark, I'm no expert but there's a whole separate thread that turned toward the bill. It was initiated by Jstas and is titled, "These are tumultuous times". No need to read through the whole thing, but in particular I would look at posts #71, 76, 78, 83 by Shack and Jstas. I read through all of the posts and those, in my opinion, do the best at grasping the totality of the problem at hand and getting beyond a narrow and limited view of what this vote was truly about today. In this political season, the simple and easy thing is place the blame on this person or that singular policy. The posts that I cited -- I believe -- go beyond partial explanations and narrow ways of looking at whats really at stake.

shack

wz2p7j wrote:

Norm - thanks, I suspected Shacks humor but just wanted to point out the plight of the little guy. Chris

Our bank is in no danger of failure, because of several factors...some of which were sound practices and some were just luck. We sold stock with the intent of buy several smaller banks. We found one which we purchased, but never found the others that fit our plan. Because of that we have a VERY strong capital base. We are seeing problems with good customers that are, like you, affected by the global problems. Because of that, we are getting much tighter in our lending...because we don't know how many problems will arise in the future to loans that look good now that will go bad. If you had asked us a year ago about the $20,000,000 we are considering downgrading...we would have said they were solid credits, to good borrowers, good collateral with no issues. Things change.

I have turned down several million in loans in the last few months that in better times would be no brainers. Now the risk and uncertainty is too great to take ANY chances.

Chris, you just might be one of those. You have good reason to worry if this thing doesn't get fixed.

John30_30

BaggedLancer wrote: »

So Shack, what are really paying for then? This money goes back to the lenders, people keep getting bad loans and defaulting because of irresponsibility, and this money is blown through as well? I don't really understand, it sounds like attempting to put out a fire with fire.

I've been looking at houses to buy recently and I really don't want to make a bad decision on the loan, I just want to understand better what I'm getting myself into before I sign the dotted line.

An ARM loan is a tool of the Devil, it should be illegal. This entire thing happened before in the 80's with S & L's writing tons of balloon mortgages, and there was a huge- for then- bailout.

I thought that instrument had been illegalized after all that, but I guess not. What multiplied it worse this time was a couple of things including:

1) banks being able to buy S & L's and then get in on speculation. Big banks.
2) all kinds of reselling of mortgages that were of little or no value, and using them as credit to leverage other schemes. It got real creative, if you think of the word creative in the same terms as kids trashing their high school.

The upside was that even kids out of high school who had jobs and were sincere about it could buy a house. Immigrants with mom and pop stores. It was historically unprecedented.
If they got a fixed-rate, and the rates were kept artificially low, it really was the American Dream come true. With some oversight, alot of the mess today could have been avoided. Or if everyone in the country were just good, honest folks......uh-huh.

The bailout is basically a loan by the Fed. Or maybe look at it as a bond issue. Houses, real property, at least that stuff has value even if it was inflated.

All this was approved by the White House who needed a hot economy from all the home building and selling to keep the Recession Wolf away the past 7 years. Look it up.

p.s. Okay, looks like shack is real banker, so he can give you alot more accurate picture and correct my and others' inaccurate impressions.

shack

BaggedLancer wrote:

So Shack, what are really paying for then? This money goes back to the lenders, people keep getting bad loans and defaulting because of irresponsibility, and this money is blown through as well? I don't really understand, it sounds like attempting to put out a fire with fire.

You are paying for the sins of the past and the opportunity to correct/fix the problem.

As I said in another thread the days of reckless "sub prime" lending is over. Spend a few minutes with the bank examiners and regulators like I have in the past 4 months and you will quickly understand that the "rules have changed". There is a take no prisoners mentality with bank regulators these days. If they sense even a whiff of weakness on a loan, you are instructed to shore it up (with more collateral, more cash, more guarantors), get it paid off, or charge it off against your reserves (in which this case you are getting no income from that loan) and must replenish your loan loss reserves from what income you have. The mortgage lending issues will not surface anytime soon. Now we just have to figure out how to solve the current issues without imploding the whole damn thing!

SolidSqual

shack wrote: »

You are paying for the sins of the past and the opportunity to correct/fix the problem.

As I said in another thread the days of reckless "sub prime" lending is over. Spend a few minutes with the bank examiners and regulators like I have in the past 4 months and you will quickly understand that the "rules have changed". There is a take no prisoners mentality with bank regulators these days. If they sense even a whiff of weakness on a loan, you are instructed to shore it up (with more collateral, more cash, more guarantors), get it paid off, or charge it off against your reserves (in which this case you are getting no income from that loan) and must replenish your loan loss reserves from what income you have. The mortgage lending issues will not surface anytime soon. Now we just have to figure out how to solve the current issues without imploding the whole damn thing!

Your comments are making me feel a whole lot better. If these kind of practices continue the economy should balance itself out again and then start chuggin along.

shack

John30_30 wrote:

An ARM loan is a tool of the Devil, it should be illegal. This entire thing happened before in the 80's with S & L's writing tons of balloon mortgages, and there was a huge- for then- bailout.

Actually the S&L issues of the early 80s had nothing to do with ARM mortgages. They came about because of the S&L problems.

Those problems were caused because of the advent of money market accounts. Prior to the late 70s and early 80s all deposit accounts were regulated. The government set the MAXIMUM banks and S&Ls could pay on their savings accounts. S&L had no problem making 30 year fixed rate loans they kept on their own books (no selling into the secondary market) because their cost of funds were fixed and relatively low.

The brokerage firms that were not regulated figured out how to offer their customers very liquid accounts that could pay rates above bank and S&L rates by investing in things like bonds, commercial paper in similar instruments. They were liquid, relatively safe and could offer rates greater that the regulated financial institutions. The Money Market Account was born. Money started flowing out of banks and S&Ls faster than water over a broken dam. The fed had to relent and let banks and S&Ls offer competetive rates to keep deposits to fund their loans. All the sudden, instead of paying 3-4% on savings accounts to fund loans that were yielding 6% they were paying 5-6% and earning were getting hammered. That was until inflation hit the mid teens and now those S&Ls were paying 14-18% to fund loans that were paying 6%. They could not be increase the rates since they were 30 year fixed rates. Banks were able to withstand the change better because most of their loans were floating rates or much shorter terms (3-5 years). It's very hard to make money when you pay 15% for money that you are lending at 6%. This is why the S&Ls failed in great numbers in the 80s. It is also why most mortgages began to be sold into the secondary market to institutions like freddy mac and fannie mae as well as insurance companies and pension funds. These institutions were not worried about volititity of interest rates but were more concerned with a "definable" rate of return.

ARMs were designed so that financial institutions could make mortgage loans without having to take long term rate risks since their cost of funds was very volatile. Not greed, just good business.

John30_30

shack wrote: »

ARMs were designed so that financial institutions could make mortgage loans without having to take long term rate risks since their cost of funds was very volatile. Not greed, just good business.

I remember people getting ARMS back then where initial payback rate was around 4%, and affordable, hoping their incomes would ajdust upward with the ARM, which ballooned to 20% in a few years. And their incomes did not.
Keeping in mind the Fed was lending around 15-16% or even more.
So, unable to make their payment which had nearly tripled in 5-10 years, they literally walked out from under them on advice from their lawyers.

Not good business, very, very bad business.

brettw22

IMO, now is not the time to put your issues against Wall Street towards this bill. I'm not saying it's roses if the bill passes, but the problems if it does not are far worse. It's a bit odd that the President put it out there to get done, and the Repubs are the one's holding it up........kind of different, but I get their hesitation at writing that kind of bill. I don't know where there is blame being placed on Democrats on a bill that a Republican president is presenting if they're trying to ensure accountability and oversight is being required as part of anyone's overall anticipation.

If the money isn't loaned into the market (note I didn't say given), then a declining DJ is going to be a typical occurrence.

On a lighter note, if there's a place that the government wants to build a freeway or something, they could surely opt to evict a few people to get that done now.........lol.......