congress passed and now intnl stock market...#2

[patandchickens]

From what I've read, the big lenders who we're bailing out sold them a bunch of the crappy home loans that they made by promising them that the housing market always goes up. How can ANYTHING always go up? Doesn't make a lick of sense....

The most frustrating thing to me, being an utterly practical, logic-ruled person is, who could EVER think that making loans to people with NO MONEY was a good idea????? It defies all logic!

I am NOT defending what all got us into this mess, just explaining it here --

it is all a matter of time scale. Making loans to people who may not be able to meet payments is a good idea *in the short term*, because you can make some quick bucks, whether you are a broker or real estate agent paid on commission, or a bank or other mortgage lender. It is only IN THE LONG RUN that it is a bad idea... and it didn't *have* to be, it's just that the same quirks of human nature that make people want to turn a short term profit also make other people get into mortgages they can't really carry through the vicissitudes of a changing economy.

Making a short-term profit and conveniently not thinking too awful much about the long term picture is unfortunately very strongly ingrained into much of our society. And we all do it to some extent.

And really, the housing market DOES always go up, on the long term (the only exceptions being properties bought during unreasonable bizarre bubbles in locations that nobody, but NOBODY, turns out ot want to live in). Again though, it's a matter of time scale. Even florida swampland sold in the '50s for incredibly silly prices is generally worth more now than it was then (in raw $, not adjusted for inflation, that is). But these long time scales are not necessarily relevant to most people. Even time scales of a decade or two - which covers most temporary sags in a region's housing market - are not necessarily gonna help most people, especially with the volatility of the JOB market these days and the resulting constant movement of people.

So I don't really see that anything exceptionally incomprehensible caused this situation. Just yer basic human nature and the tendancy to emphasize what could go right over what could go wrong where something you REALLY wanna do anyhow is involved.

I'm not a big fan of gov't regulation but this is one place where it seems fairly clear to me, anyhow, that a responsible adult (which the gov't CAN act like on occasion <g>) needed to have stepped in a lot sooner and told the kids to quit running with scissors before someone gets hurt.

JMHO,

Pat

 

[curly_kate]

So I don't really see that anything exceptionally incomprehensible caused this situation. Just yer basic human nature and the tendancy to emphasize what could go right over what could go wrong where something you REALLY wanna do anyhow is involved.

I'm not a big fan of gov't regulation but this is one place where it seems fairly clear to me, anyhow, that a responsible adult (which the gov't CAN act like on occasion <g>) needed to have stepped in a lot sooner and told the kids to quit running with scissors before someone gets hurt.

JMHO,

Pat

I guess I DO understand how this all happened; it just disappoints me how people make stupid decision based on making a buck. And it would be REALLY nice if someone would step up and say, "you know, I really screwed up on this one and I'm sorry." Obviously, there's no one person who's responsible for the whole thing, but every CEO, lender, broker, politician, etc., I've heard have passed the buck on to someone else. It's really frustrating.

And I do think it's hilarious that, in the face of this colossal wreck, there are people lobbying for LESS oversight. Although I'm not sure the government is the best watchdog since they had their hand in the cookie jar, too.

 

[enjoy the ride]

I think the real failure comes when it became common to bundle groups of mortgages and sell them. In otherwords, people approving loans decided that they would not be left holding the bag if the loans went bad as they had been sold to someone else like pensions plans and investment houses and even banks who just bought investments rather than do the work to originate the loan.
And people who bought thought that they were protected as good loans would offset any bad loans. So it was consided a safe investment. They did not check into the quality of the loans they were buying- just assumed.
In the old days, a bank would make you jump through lots of hoops and they wanted to see lots of good credit history on your part and you had to have a substantial down before they risked their own money.
Recently the rush was put on to get anyone "qualified" in order to have the loan to sell asap. Pass the problem, if any, onwards. Sort of a massive musical chairs game ...............
And the pension plans and investment hosues were to blame too- they wanted investments giving unreasonably high returns.
What was really offensive was the Congress and President who allowed regulation and auditing to go the way of the dinosaur at the bidding of very wealthy investors. I'll bet anything that many a lower level government employee found themselves fired when they protested the lack of oversight and many who went along with the program were promoted until no one really remember why all this was neccessary.

Well this, despite all the whining and finger pointing of Wall Street, is not the first nor will be the last time this sort of thing has happened.

I just wish there was a common-sense party with a platform of rational decisonmaking and service to the country - that I could vote for. But most people with that attitude would be very put-off by having to associate with the current incumbants.

 

[MorelCabin]

http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml

Well this explained to me what happened...because I didn't get it either:>)

 

[roosmom]

Now the world money situation is going down.
ACORN, acorn is an acronym for something (cant remember what), but they are a group of people who basically forced fannie may and freddie mac to loan monies to very low income people. Yes, regardless of their income, they were allowed to get loans for houses.
I think we are all going to have a chance to see if we are even halfway prepared for self sufficiency, I am not, not really. Are you?

 

[Quail_Antwerp]

Well I know we aren't 100% ready or completely self sufficient here, but I think we are more prepared than most of our family. Doesn't mean I want to put it to the test, though!

 

[reinbeau]

ACORN stands for Association of Community Organizations for Reform Now. They've been tied now to massive voter fraud in Illinois and Missouri, that story is still breaking. Obama is heavily involved with them, no matter what he's trying to spin right now. Do a google search and read up on it yourselves.

 

[Quail_Antwerp]

Just say Nobama!

 

[FarmerChick]

Just say Nobama!

********You bad Quail but I am laughing..LOL

 

[Quail_Antwerp]

Just say Nobama!

********You bad Quail but I am laughing..LOL

Well, I am not ashamed of my decision.

I would vote 3rd party if I had even the slightest inclining that the 3rd party would get it this year!