Read this earlier this evening and thought the story lacked the leavening of loser lenders jumping from tall buildings. The lemmings learned and bought parachutes.

Last edited by choad (2008-09-15 00:44:57)

karenw wrote:

I wonder if we should all start learning Chinese?

They just don't have as far to fall.

Clever funny presentation explaining this ruckus, click the full screen to see detail:

http://www.slideshare.net/guesta9d12e/s … er-277484/

Easy solution to this mess: We tear down all of the houses nobody is paying for, ship the wood to Norway and they can use it to heat their houses this winter. Everybody wins!

tojo2000 wrote:

karenw wrote:

I wonder if we should all start learning Chinese?

China is feeling this just as much as anybody.  They invested a lot of money in our mortgage securities and demand for the products they make has been slipping, even among the Chinese.  People are getting a taste of a better life just as the economy is slipping.  This is going to suck for a lot of people.

In the end China (like India) is going to be a net importer economy - their growth is more dependent on internal consumption than exports.  Keep in mind they have 1.5bn people to buy flip-flops for.

The Dow Jones industrial average has raised over 785 points in two days...

Sorry, but the sky is not falling.... This is a market adjustment for bad lending practices, nothing more.

George Orr wrote:

ptah's right.  (Ow, that hurt.)  As of 2:00 EST 9/19, the Dow is at 11,400--quite a recovery from the beginning of the week.

It's waaaay too soon to say who is right.  Don't forget we just dumped billions of dollars to make the government the #1 mortgage company in the country and the credit crunch is far from over.  Just because the apocalypse isn't now doesn't mean we aren't in for a rough year.

Well, just like with the tech industry, the WAAAYYY overblown mortgage industry  has been long overdue for a serious adjustment.

Everyone knew this was coming years ago. A lot of folks, who could have never have even owned a home in 30 years ago's market, went out and purchased a home using flex-rate mortgages at the very limit of what they could afford. On top of that, I wonder how many were "pre-approved" and then piled on the extras at the time of building and struggled from day one paying their mortgage?

Just like high-tech and the S&L's, this will pass. You are right about one thing, though. We have no business buying out these companies. Wasting taxpayers money to make it appear to be "all fixed up!" is insane...

Dmtdust wrote:

seeing as 2 out of 3 corporations don't pay tax anyway

Really?  I hear that claim thrown about a lot but is it true?

http://www.reuters.com/article/newsOne/ … 5620080812
http://public.cq.com/docs/cqt/news110-000002937306.html
http://abcnews.go.com/Business/wireStory?id=5561455

Want More?

Thanks, I am out spending money doing my bit to save your asses.

duplicate post

Last edited by Johnny_Rotten (2008-09-19 17:07:13)

phreddy wrote:

...   Although corporations are considered legal entities, they are not people, and they don't really pay taxes.  The taxes are paid by the people who buy the corporation's goods and services because they are added on as a cost of doing business.  Those people are us.  Every nickel of taxes charged to a corporation goes in to the price of their product.  Any money the corporation makes eventually gets distributed to its shareholders, who are taxed on the income.  To say that corporations aren't paying their fair share is to be ignorant of how the system works.

Except that there are imbalances in the way Corps are taxed. Which effectively leads to their tax burden being anti-progressive.

While you could say that every nickel of taxes paid goes into the products, the converse is not true. Every nickel of taxes saved does not neccesarily cheapen the products or always go back to the shareholders.

These Brobdingnagian paychecks are partly the result of taxpayer subsidies. A study released a few weeks ago by the Institute for Policy Studies in Washington found five major elements in the tax code that encourage overpaying executives.

Other non progressive tax imbalances were the way corps have avoided taxes by accounting rules that considered compensation via stock options as a different cost on their balnace sheet then salaries. Or the way hedge funds avoided any income related taxes by having compensation classed as capital gains.

phreddy wrote:

It's like the idiot who tries to tell you he would net more after taxes if he earned less money.

Ever hear of tax brackets?  If earning a little more is just enough to put you in a higher tax bracket you do indeed net less by earning more.  That's inherent in a progressive tax plan.

phreddy wrote:

And so what if a company overpays its executives?  The majority of that money comes out of what would otherwise be profits accruing to the stockholders.  So if the stockholders want to overpay, let them.  It's their money.

You really think the shareholders are making these decisions? Drink deep the kool aid my friend. In other places where shareholders actually do have a say they choose executive pay rates and set accountability very differently.

Last edited by Johnny_Rotten (2008-09-19 18:20:25)

http://www.latimes.com/news/science/la- … 4047.story

Going by this, you guys would still be arguing about going up on land.  Face it, you are genetically cursed.

Back to the ocean!

Zookeeper wrote:

Ever hear of tax brackets?  If earning a little more is just enough to put you in a higher tax bracket you do indeed net less by earning more.  That's inherent in a progressive tax plan.

What, did you graduate from the Wesley Snipes school of tax accountancy?

Do the math and show us where a progressive tax causes one's after-tax income to shrink as a result of pre-tax income increasing.

Last edited by orangeplus (2008-09-20 13:08:38)

So the government wants to buy $.7 to 1 Trillion dollars worth of securities. The securities represent bundles of mortgages a certain percentage of which are in default, eviction. Does this mean the US Govt will own people's houses? Is the US government then going to evict people who cannot afford the mortgages that they shouldn't have qualified for anyway? Are they going to evict people from houses they did qualify for but are now victims of a quickly diminishing economic outlook? Will they instead bow to public pressure to forgive some debts? Will George Bush be Ebenezer Scrooge or Tyler Durden? Will they not have to seriously raise taxes? Is not the only other option entail nuking American credit?

Ok, I can understand the idea of bailing out the major financial houses to stabilize the situation. What I fear is that the implications of it cannot be charted. They are reacting in the most short sighted and simplistic way possible. The securities equivalent of agricultural subsidies in the 30's. The only way to prop up prices then was to pay people not to grow, to leave fields fallow. You can't exactly start plowing subdivisions over, can you?

Last edited by orangeplus (2008-09-20 22:04:12)

orangeplus wrote:

So the government wants to buy $.7 to 1 Billion dollars worth of securities. The securities represent bundles of mortgages a certain percentage of which are in default, eviction. Does this mean the US Govt will own people's houses? Is the US government then going to evict people who cannot afford the mortgages that they shouldn't have qualified for anyway? Are they going to evict people from houses they did qualify for but are now victims of a quickly diminishing economic outlook? Will they instead bow to public pressure to forgive some debts? Will George Bush be Ebenezer Scrooge or Tyler Durden? Will they not have to seriously raise taxes? Is not the only other option entail nuking American credit?

Ok, I can understand the idea of bailing out the major financial houses to stabilize the situation. What I fear is that the implications of it cannot be charted. They are reacting in the most short sighted and simplistic way possible. The securities equivalent of agricultural subsidies in the 30's. The only way to prop up prices then was to pay people not to grow, to leave fields fallow. You can't exactly start plowing subdivisions over, can you?

If I wasn't within five or six years of paying the house off I'd quit paying and hope our Uncle would help me out too.  Instead I'm paying taxes and helping out people who bought more house than they could afford.  While waiting for inflation to skyrocket, maybe I'll take out a home equity loan.  The boss was just telling me about some story on whatever all news channel she was watching.  Some woman who makes less than I do, when I don't go to work at all, bought a house as expensive as ours.  But they told her she qualified for that much, so it's not her fault.  Stupid people not only shouldn't breed, they deserve to live in refrigerator cartons.

While I think the idea of the disposition of individual home loans is a valid one, it's not my point. My point is the implications of this are massive and impossible to map out at this point. There is no plan. What they have asked for is a pot of 700 Billion dollars to do whatever they want to in order to keep the markets afloat. The details are astounding, no congressional oversight, immunity from civil suit or criminal prosecution to the bureaucrats spending the money, it's not just 700 Billion, it's 700 Billion maximum government ownership of assets at any given time. The freakin bill is three pages long, over 200 Billion dollars per page of allocation of a sum larger than a years worth of the Defense Department + GWOT. Those will be the three most expensive pieces of paper in the history of mankind.

Don't confuse this with the S&L RTC, that seized bank assets and disposed of them in an orderly way, protecting individual depositors. This one simply buys the securities that no one wants since it's simply impossible to determine their actual value. What happens to them then? The goal here is to, in some sense, provide a definite price to the securities since the big investment houses used those securities as collateral on loans, that collateral was leveraged at up to 40x the value of the securities. It's a last ditch effort to stop a cascade of defaults. As the original securities drop in value, the total value of collateral put up for the loans begins to decrease, so the loaning agencies call in their loans since the required security is no longer enough, but the lendee does not have the money to give back or further assets to put up for collateral. The lender of this scenario now is unable to maintain it's credit position since it can no longer secure the loans it leveraged, and so on.

The foreign policy implications alone are staggering. Have you seen what has happened in China and Russia? Leveraged their stuff on securities they figured were backed on US real estate. What could be more secure than that? It appears "Derivative" translates into something other than "roulette" and more's the pity them.

hedgewizard wrote:

I'm borrowing nothing.  Take my advice, I'm not using it.

Au contraire. Once this is done, you'll be on the hook for 1/ 300 millionth of 11.3 Trillion dollars. You're piece is about $36,000, plus another $36,000 for any kids or other dependents you might have.

Last edited by orangeplus (2008-09-21 00:29:43)

George Orr wrote:

hedgewizard wrote:

Some woman who makes less than I do, when I don't go to work at all, bought a house as expensive as ours.  But they told her she qualified for that much, so it's not her fault.  Stupid people not only shouldn't breed, they deserve to live in refrigerator cartons.

CNN.com had a front-page main story awhile back, telling the sad tale of a woman who made $70K annually, regulation two kids, regulation SUV, etc. who was about to lose her home because she couldn't make the house payments.

After digesting this information, I came to the punchline:  she works at a bank.

Really, though, this is no worse than the people that created the securities in the first place.  The whole basis for the usage of these mortgages as collateral was the underlying assumption that even if some people defaulted there was no way that the value of the housing market would stop going up, so it's okay to give out risky loans.

Every level of the whole thing was retarded.

WilberCuntLicker wrote:

phreddy wrote:

The market determines the price of goods and services...(ad bullshitium).

All the very stupidest economic theories begin with a similar affirmation of the deterministic power of market forces. Markets determine nothing. The fix has been in forever - the agora is owned. Brainwashed slaves like Phreddy lave their masters' cocks and balls by chanting and rechanting this endless, brainless empirically indefensible wagonload of utter (but very expensive) crap. Some niggers learn to love their chains. Clank on, Phreddy, you braindead dolt.

This brought tears to my eyes.  Thank You Wilbur, thank you.

in my email today:

Subject: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

just one week away