The American Mortgage Mess. 60 Minutes

[MadCow]

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3756665n

If you have investments you owe it to yourself to watch this is you haven't already.

 

[chilli]

Great link!

Thanks.

 

[threepeat]

I like the couple that says, "our house went down in value so we shouldn't have to pay for it." I'll have to try that with my broker the next time one of my investments go down.

What ever happened to good old morals??

 

[chilli]

What ever happened to good old morals??

Like the morals of the bankers and the investment firms who thought up this whole debacle??????

imo they (the money lenders) did it to themselves. (because of greed).

One of the first principles of sound monetary lending practises is the clients ability to repay.

I mean its common sense if you lend your friend $10,000 and he has a crappy job and high debt don't be expecting him to repay you anytime soon.

In fact I'd tell you to write off the debt, because the chances of you seeing the money any time soon - are not very good.

 

[Bartdude]

I like the couple that says, "our house went down in value so we shouldn't have to pay for it." I'll have to try that with my broker the next time one of my investments go down.

What ever happened to good old morals??

Yeah, the lenders aren't to blame at all. They were completely honest, above-board, and responsible.

Shouldn't you be outside, telling the street guys to "get a job" or something?

 

[phil_anderer]

Good time to buy

Its a great time to invest. There are foreclosures in Seattle and Tacoma I found, but few in Northern Washington State (think summer vacation home). I've put an offer in on a place at $175,000 – original sale price was $310,000. There are ways for Canadians to purchase American property and then rent it out. I'll know this weekend.

 

[threepeat]

Yeah, the lenders aren't to blame at all. They were completely honest, above-board, and responsible.

Shouldn't you be outside, telling the street guys to "get a job" or something?

This sounds like a variation of the old Groucho Marx line, "I would not join any club that would have someone like me for a member."

So these homeowners should think "I refuse to pay back anyone who was stupid enough to lend me money?"

 

[chilli]

The sadness of it all the money changers do have friends in high places and the bail-out bills will be mailed to the taxpayers.

But longer term there is still some justice in the works:

http://www.youtube.com/watch?v=M9PSMk7Q0I8&feature=related

http://www.youtube.com/watch?v=JYkY...17/jim-rogers-the-indiana-jones-of-investing/

One should ignore Jimmy Rogers' prognosis of China: why would one invest a place where one does not even want to live " Peter Lynch's saying??? But Mr. Rogers is dead on about the real estate market for next decade or so. And it is global even TO will be affected (VAN too!)

OK - Jim Rogers thinks we should all go out and become farmers and miners?

Someone please explain that one to me.

 

[chilli]

I guess he is saying the time of making money by trading money is gone for the next little while. The next wave of the economy is driven by making real things real people need and not some wizards packaging some financial papers and selling them back and forth among themselves and call that wealth creation...

Your explanation makes sense, but I wish people like him would say what they mean.

Sometimes (like tonight, I'm tired) I don't want to have to use my secret decoder ring.

 

[SexyBoy]

I don't want to have to use my secret decoder ring.

OMG! ROFLMAO!

 

[Krustee]

Yeah, the lenders aren't to blame at all. They were completely honest, above-board, and responsible.

Shouldn't you be outside, telling the street guys to "get a job" or something?

Truth be told there is fault on both sides with this issue.

Lenders were undoubtedly unethical in their practices but just shy of being illegal.

The buyers on the other hand are victims of their own greed & ignorance.

Such is the case in life, the the smart, wealthy people, will have the resources to ride out the down turn in the market while those who willingly risked their security & equity on pursuit of more wealth or vain desires will suffer.

As a general rule you should never risk more than 35% of your equity on any venture.

If you do not have it to lose don't gamble it.

 

[PoorGuy]

There's some weird conspiracy theories out there about this mess. Someone told me the moneylenders are all Jewish and they manufactured this mortgage mess to provide cheap housing for new Jewish immigrants. A bunch of details missing here obviously, but I just

 

[Bartdude]

This sounds like a variation of the old Groucho Marx line, "I would not join any club that would have someone like me for a member."

So these homeowners should think "I refuse to pay back anyone who was stupid enough to lend me money?"

A gross oversimplification and convenient ignorance of exactly what went down.

Lenders, in some cases, deliberately targetted people and conveniently withheld the idea that in a few years the loans would reset at crushingly high rates. These high-risk mortgages were then sold, through outright deception, as blue-chip investments over and over - with each seller, most notably the original mortgage broker, taking a nice profit for themselves.

Yes, ultimately, no one was holding a gun to these peoples' heads. But this is a perfect example of why dependence on the free market does not work. And, at the same time, how governments neglecting their duties for short-term gain can inadvertently shoot themselves in the foot.

 

[threepeat]

A gross oversimplification and convenient ignorance of exactly what went down.

Truth is, we're both oversimplifying things. There's enough blame to go around for the buyers, the financial institutions, and the government in pretty much equal parts. My original comment was directed at the couple in the 60 Minutes video, who clearly didn't (to me) look like they were unable to pay, but rather chose not to pay. I still fail to see a moral justification for that.

 

[LonelyGhost]

Chairman Ben cuts again.

The world lives at the cutting edge of the Fed, according to Alan Abelson. But to AA, more cutting by the Fed would not make US whole. What the good old USA needs is, AA said, "a profound deleveraging of the the economy where people are encouraged to save instead to consume." ..

Bring back the Gold Standard, anyone???

okay, so Japan (and China) is a nation of 'savers' so their economy
has pretty much ground to a halt for how many years now?

they have so much money sitting in banks that they get 0% interest
on their savings ...

The real problem in the USA is simply that its all based on 'get rich
today!!!!' not tomorrow, not next week, but TODAY!!!!

so import shit from china and sell, sell, sell ... don't care if you need it,
or if it works or if its safe or if it costs jobs here, just give me my
million and shut up already ...

Basic problem identified by Marx over 100 years ago: Capitalism requires
an ever-expanding market and if there aren't more people with money,
then 'create' more people with money through cheap credit.

People don't even have jobs anymore, but they still get credit if they
promise to get a job ... don't have the money to pay off what you owe?
Borrow more to 'consolidate it' and have more to spend again ...

And how does the US government react? Print more money ...

Yeah, the gold standard ... dream on ...

 

[Bartdude]

okay, so Japan (and China) is a nation of 'savers' so their economy
has pretty much ground to a halt for how many years now?

they have so much money sitting in banks that they get 0% interest
on their savings ...

The real problem in the USA is simply that its all based on 'get rich
today!!!!' not tomorrow, not next week, but TODAY!!!!

so import shit from china and sell, sell, sell ... don't care if you need it,
or if it works or if its safe or if it costs jobs here, just give me my
million and shut up already ...

Basic problem identified by Marx over 100 years ago: Capitalism requires
an ever-expanding market and if there aren't more people with money,
then 'create' more people with money through cheap credit.

People don't even have jobs anymore, but they still get credit if they
promise to get a job ... don't have the money to pay off what you owe?
Borrow more to 'consolidate it' and have more to spend again ...

And how does the US government react? Print more money ...

Yeah, the gold standard ... dream on ...

Brilliant!!