[mshev]

Ok, the bail out bill has my panties in a twist so to speak. I'm 37. I work part time. I have two children. My husband and I work. We work allot. We sacrifice. The "experts" say the 7 billion dollar bail out plan is necessary or there will be a "credit crisis".

This leaves me confused. "Credit crisis"? Why are people living off credit? Why is Credit the key to our economy? When did "living with in your means" become an outdated idea? I've never had a car loan. I've never taken out a loan for a TV, or a Vacation, or a nifty new Jacuzzi. I do have a mortgage, just one, the only one that I've been paying faithfully for 10 years. Do I have some nice thing? Yes, but we save, and we save and we sacrifice a few things here and there. We skip vacations, and don't go out to eat, we buy in the bargain bin if we have to in order to purchase or invest in something we want. We wait till we have earned enough money to buy the "extras" and still pay our bills.

This does not seem to be the norm. Many people I know don't do this. They refinance their homes over and over again so they can have vacations and nifty cars, and the newest techno gadget. I understand the temptation; I get the calls, the offers in the mail? They all claim to want to lend me huge amounts of money I know I can't pay back. Ok, I get it. I understand that many people have given in to this temptation. What I don't understand is the overwhelming feeling that I get where it seems that today it's not just the ability to pursue happiness that people want, they expect it, demand it, whether it's earned or not.

This is my first post pretty much anywhere. I just can't help it. I'm Mad. Look I know people who are going through foreclosures and are hurting. I have even offered our spare room to one (which has made my husband oh so happy!) I feel for anyone who's gotten themselves in a bind with credit. But, they got themselves there right? Why do I have to make yet more sacrafices for people who really wanted to believe they could have their cake and eat it too? Sorry, but grownups should really no better, right?

[mshev]

Sorry, but grownups should really no better, right?[/QUOTE]

Ok, that was a rather funny spelling error. I should KNOW better.

[Curlyben]

Unfortunately I think you are looking in the wrong place here.
The current financial crises we are facing isn't driven by the consumer, but by the very financial institutions that we trust to look after our money and invest it wisely.

I really think you should do some serious reading if you really want to try and understand the underlying problems here.

There isn't really enough space on this site to go into all the issues that have caused this crises, but it is basically greed, isn't it always.

This is an excellent place to start: https://www.askmehelpdesk.com/curren...ac-260752.html

Ps it's actually $700 Billion bail out in 3 parts. Telephone number finances ;)

[mshev]

Thank you for your response, and the info. I apologize, you are correct. This not the right place for this type of discussion. However, as I've read more posts, I wanted to say what a great site this is and I will be more careful with my postings in the future.

[Curlyben]

Thank you for your response, and the info. I apologize, you are correct. This not the right place for this type of discussion.

No worries.
Actually this is the right place, what I was trying to show is that I believe that you are looking at the underlying issues from the wrong perspective.

[tomder55]

Curley au Contraire

A responsible person should feel very bitter of the pocket picking that our government just did on us.

See my response to Benign Capitalism above . https://www.askmehelpdesk.com/govern...sm-266651.html

I am very offended that to bail out a bunch a cheaters , money ,that could be used to help my child purchase a house ,will be instead be used to bail out people who bought a house who had no business doing so;and corporate execs and corrupt politicians who gamed a system that they and Congress set up for the purpose of fleecing the American taxpayers.

Edit : mshev... that is an excellent title to this posting . The constitution guarantees a Pursuit of happiness ;not a desirable outcome. That is something that has to be earned .

[inthebox]

Not to stoke the fires but:


Taxpayers for Common Sense


http://www.nytimes.com/2008/10/06/wa...mental.html?hp


Why!

They are [ congress ] such PIGS!

If this bailout is so important why play political games and add pork as a way to get someone's vote?

And the media is complicit - most of the articles on the mental health bill don't question why it comes with the "bailout."

Why can't a bill be just a single and stand on its own merit?

Do we have any guarantee that this "bailout" will be enough?

They said bailing out Bear Stears would avert just this thing from happening?

Now look at where we are.

Are we going to be in the same position 3 months from now after this "bailout?"


:mad::confused::eek::mad:

[Curlyben]

Curley au Contraire

Sorry Tom, you've lost me there.
Are you saying this ISN'T a consumer driven crises ?

Yes, it is certainly driven by greed, but from whom.
While the consumers are always requiring the biggest and newest things, the financial institutions were NOT forced to reduce their lending criteria and hence produce a lot of "toxic assets" by extending credit to those least suited to the product.

[tomder55]

Curely

I think the government created the demand that caused the bubble.
Like mshev I desired a home long before I could afford it. The banks rejected one application after another . There were strict rules they adopted for lending that guaranteed I'd have sufficient " skin in the game " before I committed to the debt.
That was all waved by rules relaxing . The financial institutions did not do this on their own . The very link you gave in your first response details the government's attempt at social manipulation of the market. This was good intention gone bad.

[NeedKarma]

But Tom, this is the 'free market' that you mention often, less government regulation and all. Deregulation didn't cause the problem, people's greed did. The market gave them enough rope and the hung themselves with it. Sometimes regulation is good, some people need to be protected from themselves.

[tomder55]

This was not free market it . It is harldy free when the government demands that standards get loosened and lenders are forced to lend against their good judgement .

[NeedKarma]

... and lenders are forced to lend against their good judgement .

Did they grab people off the street and hold a gun to their head?

[tomder55]

Did they grab people off the street and hold a gun to their head?

Nope it was not the people but the lenders that had a gun to their heads.

I would like to own a Mazeratti . But I can't afford it . If the gvt. Which oversees Mazeratti's operations told them that they had to sell it to me on credit with no money down ;regarless of my ability to pay ;then perhaps I would take the plunge knowing that the worse that could happen is that the car gets reposessed .

[Curlyben]

Surely this is a clear case of the financial institutions disregarding their fiduciary duties to their depositors/consumers and seriously over stretching them to vastly increase their own bottom lines?

[tomder55]

Ben ;I refer you to the link you provided :

In fact, Fannie and Freddie, (at Congress' behest) started creating newer, riskier loan products designed to help people who could not afford a home to buy it anyway. Congress (or at least certain members of Congress) saw it as their job to help the poor people who could afford a home become homeowners, and saw Freddie and Fannie as the vehicles to make that happen. Such loan products included ARMS and HELOCS and no-doc loans, and 120% financing products, etc. The banks were happy to make the loans, since they could sell them to Fannie and Freddie without any risk to themselves. Additionally, seeing how much money was being made by Fannie and Freddie from these products, the banks started keeping some of them, and started creating GNMC-guarateed bonds of their own. And many investors purchased such bonds, either from Fannie and Freddie or directly from banks.

But the loans themselves were poorly underwritten. The banks, the investors, Freddie, Fannie and even Congress became so enamored with the profits to be made by trading in the secondary mortgage market and trading mortgage-backed securities that they stopped looking at the strength of the loans themselves, and looked only at how quickly they could book loans or purchase new bond issues.

Now... please look at the phrase that I bolded up above. I'll repeat it here:

Congress (or at least certain members of Congress) saw it as their job to help the poor people who could afford a home become homeowners...

I also refer you to this Village Voice article by Wayne Barrett to see where the agency of the government assigned to monitor housing ;HUD. was complicit in the government pressuring lenders to loosen their standards

Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons.
What he did is important—not just because of what it tells us about how we got in this hole, but because of what it says about New York's attorney general, who has been trying for months to don a white hat in the subprime scandal, pursuing cases against banks, appraisers, brokers, rating agencies, and multitrillion-dollar, quasi-public Fannie and Freddie.
It all starts, as the headlines of recent weeks do, with these two giant banks. But in the hubbub about their bailout, few have noticed that the only federal agency with the power to regulate what Cuomo has called "the gods of Washington" was HUD. Congress granted that power in 1992, so there were only four pre-crisis secretaries at the notoriously political agency that had the ability to rein in Fannie and Freddie: ex–Texas mayor Henry Cisneros and Bush confidante Alfonso Jackson, who were driven from office by criminal investigations; Mel Martinez, who left to chase a U.S. Senate seat in Florida; and Cuomo, who used the agency as a launching pad for his disastrous 2002 gubernatorial candidacy.
With that many pols at the helm, it's no wonder that most analysts have portrayed Fannie and Freddie as if they were unregulated renegades, and rarely mentioned HUD in the ongoing finger-pointing exercise that has ranged, appropriately enough, from Wall Street to Alan Greenspan. But the near-collapse of these dual pillars in recent weeks is rooted in the HUD junkyard, where every Cuomo decision discussed here was later ratified by his Bush successors.And that's not an accident: Perhaps the only domestic issue George Bush and Bill Clinton were in complete agreement about was maximizing home ownership, each trying to lay claim to a record percentage of homeowners, and both describing their efforts as a boon to blacks and Hispanics. HUD, Fannie, and Freddie were their instruments, and, as is now apparent, the more unsavory the means, the greater the growth. But, as Paul Krugman noted in the Times recently, "homeownership isn't for everyone," adding that as many as 10 million of the new buyers are stuck now with negative home equity—meaning that with falling house prices, their mortgages exceed the value of their homes. So many others have gone through foreclosure that there's been a net loss in home ownership since 1998.

Andrew Cuomo and Fannie and Freddie - News - Village Voicepage 1 - Village Voice