just words? bwahahahaha. Obama loses more and more of his shine as people find out more about him. He's a sham
I do not think that a government bailout is a good idea. I do think that reasonable government actions are a good idea. The bankruptcy bill would have allowed judges to freeze the interest rate at say prime plus 2% as we do with cars (see Till v. SCS Credit Corp, 541 U.S. 465 (2004)) during a chapter 13 reorganization. The reason we should do something is that you do not want a higher than normal rate of completed foreclosures. Houses sit empty, house values in the area plummet. It is just bad for the economy overall.
Without the gov't guarantee of JPM's purchase of BSC, not only would BSC have gone down the tubes, but LEH would have been next followed by MER, followed by who knows what else, and talk would not be about recession but about depression....it's not just wall street with something at stake here. It's basically the backbone of the world's financial markets.
That is all SPECULATION that the other companies would fail. Bear Stearns simply just did bad business.
I never said his grandfather was a furniture mogul. All I said that furniture salesman can make money. All I said is that Obama NEVER SUFFERED. You make it sound like he was in the Poor house!
You guys are arguing different things. Sam was originally trying to say that he was not a big elitist as far as his background. You countered by saying he was never poor and never suffered. Two different things. Just because Obama wants to be more intellectual doesn't mean he is an elitist society type and looks down on "poor people". PS - Sam was also giving you a hard time about Bear Stearns because you called it a mortgage company. And he was right about the bigger implications of their collapse.
Allow me to be a little more clear. What I am against is bailouts of people who have purchased houses they cannot afford. Something needs to be done to minimize the overall economic effect of this problem. Encouraging forebearance agreements between lenders and homeowners sounds like a good idea. The problem with this is, in my practice, I have seen that the overwhelming majority of forebearance agreement fail. Usually that failure happens pretty early in the process. The result is that the home is reposted for sale. Obviously I come into this debate with a different perspective since I am a bankruptcy attorney. What I see a lot is that people who are facing foreclosure generally have fallen behind on cars, or owe the IRS, or have other issues. If the code could be amended to effectively deal with the foreclosure/subprime mess and solve the other issues these people face in one court approved plan, then we may be better off doing just that.
4% doesn't look like much, but if you have one in a neighborhood, it dramatically lowers the comps and makes it harder for sellers to sell... and 1 in 25 seems high to me... particularly when it is so widespread across all classes of neighborhoods. And really, I suspect this is a harbinger... in addition to bad ARMs and such, many bills are still to be called in from people who speculated in real estate and took money out through HELOCs to fund consumer spending. Having 4% (or more by the time we're done) of homeowners move into rentals is also an unknown and will probably have effects up and down the economic ladder.
Agreed. There is a larger economic concern though. It is very easy to view these companies in a vaccuum and say "screw 'em." That ignores the consequences to that action for the economy as a whole. If these groups fold, there will be lost jobs. If foreclosures complete at a rapid rate, there will be a devaluation of the real estate market. If real estate devalues, then borrowers who are running into trouble will not be able to sell their homes for a price that will pay off the mortgage. Mortgage companies may or may not agree to a short sale. Even if they do, the mortgage company will lose money, further weakening the financial services sector of the economy. If that critical sector weakens, the entire market weakens. If the market weakens, businesses will contract their operations, and lay people off to minimize the effect on their stock's price. Basically, we all lose.
I do all my foreclosure letters myself, so I see what is posted month after month...a couple of observations: 1. There is a pattern. There are a handful of ZIP codes that have a disproportionate amount of the foreclosure activity. There are some ZIP codes which almost never have one. 2. Over the course of the last year, I have seen a sharp increase in the number of borrowers that are posted on more than one property. In fact, last month I saw an individual that was posted on 5 properties. I get the list of residential, not business foreclosures. There is a growing number of people who purchased more than one house while getting mortgages was so easy, and now they are in trouble on all of them.
Being so close to the hyper markets in the Bay area and Sacramento/Stockton, we're further along than Houston I suspect. We've got almost 4,000 homes on the market in a valley that might have 150,000 people. According to Realtytrac, we have 1,002 homes in pre-foreclosure, auction, or bank owned status. My realtor says probably 50% of the homes on the market are there because of distress. Kids in my daughters' school are having to leave their homes and move, houses sit empty, and more are hitting the market every day. Sharks have come in to make extreme lowball offers, short sales aren't going through because even though the original bank may OK it, the ones who gave out the home equity loans kill the deal, so it goes on the market. It's grim. The number of $500,000+ homes in existence 18 months ago was way way out of proportion to what the local economy could support... it was mostly built on CA money coming in either after they cashed out at the right time or speculating with borrowed money. We're seeing the biggest impact among homes $250,000 and up. Buyers (like me) are sitting and waiting to see where the bottom is. We're not there yet. Not close. Asking prices have come down at least 15% in the year since I've been here and sales prices are closer to 20%, but many sellers cling to the belief that the market will soon get back to 2005. We've even noticed that since the last rate cut, some sellers increased the asking price... I guess thinking that the new rate would return the market to what it was. There's a lot of denial going on out there and the price we'll all end up paying for the binge many of us went on is going to hurt.
Gloomier signs point to another year of depressed home prices. There's a significant difference between a 20% drop in value and 30%. Each time it becomes pronounced, it sets off a chain for more "overleveraged" homeowners to simply walk away instead of paying the mortgage in their negative value houses. Then the ensuing chain sets off more price decreases. George Soros was saying yesterday how the black community will be affected the most. Even the rich urban hoouseholds who took the lure of refinancing heavily and are now discovering that they may be out of a home. This continues to look like it will rock us long and hard, and the commodities bubble from the lack of faith in printed money will linger as long as there isn't a strong dollar. The knot in the finance circles is entangling main street. Bailing out homeowners is the direct way to address the problem, not bailing out large financial institutions that are Too Big To Fail. Unfortunately no one has faith that the system has the foresight and planning to effectively find a solution that can help all parties.
Have you lived through a father leaving your family when your 2? His grandmother was not a socialite. I just don't think you are in a position to say whether or not he has suffered or not suffered. If you think the south side of Chicago is better for political connections than in some of the top financial institutions of Wall Street where he could have been, then you have much to learn about POLITICAL resons. If you have plenty of points to make about Obama's suffering, I eagerly await you to make them. So far you haven't made any.
