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Thread: The 1% will own more than the 99% by 2016, report says

  1. #601
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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by JasperL View Post
    OK, the financial institutions made loans, charged a bunch of fees, sold them off at a profit almost immediately, those buyers bundled them into securities, charged more fees, sold off those securities at a profit, so all along the way the players are keeping slices of this new debt. And when the shiate hit the fan, the homeowners were mostly left with a mortgage debt in excess of the value of the property, many bankrupted, lost their houses and savings, but we covered the losses of the lenders instead of bailing out the borrowers. So after all the dust settles, which group benefited from the boom and the bust? It's not homeowners.... Follow the money as they say.

    And the bigger point is the purpose of all the changes were NEVER to 'redistribute' downward. The banking and lending environment we had in the bubble was nearly exactly what the biggest lenders and the most powerful institutions in the U.S. paid good money - $billions over time - to get. Look at the results during the bubble - everyone in the process was shoveling in profits, pay, bonuses and stock appreciation gains as fast as they could work the shovels.
    The lenders didn't get any of their losses covered. Over 500 banks went out of business and the "bailouts" weren't gifts. They were loans designed to keep the key players from defaulting on their obligations. Basically, we loaned them the money to keep them afloat long enough to pay for their mistakes.

    The people that got over on us all were the individuals that decided not to make payments on their zero-down payment loans when it turned out their "investment" didn't turn out to be as profitable as they thought it would be. The same thing happened in Ireland. It should have been something to take a lesson from but so many people have the same skewed perspective you have that I wonder how long it's going to be before we do it all over again. My wife (Irish) still believes that land is a foolproof investment. Fact is, we may not ever again in our lives see land values like those stupidly high inflated bubble values that made homeowners and prospective homeowners giddy with delight. It was an orgy of financial excess for all involved; not just the lenders. The lenders were the ones left holding the bag.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by Papa bull View Post
    The lenders didn't get any of their losses covered. Over 500 banks went out of business and the "bailouts" weren't gifts. They were loans designed to keep the key players from defaulting on their obligations. Basically, we loaned them the money to keep them afloat long enough to pay for their mistakes.

    The people that got over on us all were the individuals that decided not to make payments on their zero-down payment loans when it turned out their "investment" didn't turn out to be as profitable as they thought it would be. The same thing happened in Ireland. It should have been something to take a lesson from but so many people have the same skewed perspective you have that I wonder how long it's going to be before we do it all over again. My wife (Irish) still believes that land is a foolproof investment. Fact is, we may not ever again in our lives see land values like those stupidly high inflated bubble values that made homeowners and prospective homeowners giddy with delight. It was an orgy of financial excess for all involved; not just the lenders. The lenders were the ones left holding the bag.
    A bit, but really the securities are what ****ed the market. If everyone wasn't ridiculously long on the AAA-rated exotic securities, the housing bubble wouldn't have crumbled the entire stock market and US economy. It could have been handled on a case-by-case basis. Instead, people who were underwater already saw their home values drop, their financial portfolios drop, and some even lost their jobs due to a number of varying reasons.

    The bad mortgages played a role, for sure, but to put the blame squarely there seems odd to me.
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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by j-mac View Post
    Right, and so I still didn't see a direct answer to the question, 'are you talking about the mortgage payment made to the bank'?
    My answer didn't reference those payments, so no, that's not what I was talking about.

    I would ask you though, I know I am not the smartest person in the world, but when we bought our house, I read the documents before signing them, and if I had questions, I asked right then for clarification, and if I didn't like the answer, I asked to have it changed...Are you telling me that the borrower has NO responsibility for their situation? That the banks forced them to sign the papers?
    I didn't say that either. The point was fairly simple - two parts. 1) The lending environment was what the lenders wanted and spent $billions buying, and they got nearly 100% of their wish list checked off. 2) After the dust settled, what happened after the boom and bust was redistribution upwards, from the poor and middle class mostly to the banks and related financial institutions. 2a) Much of the reason for that is people who defaulted lost their homes, much of their savings, etc. which is what happens, but we bailed the banks out of THEIR losses, which is NOT what is supposed to happen. It made the loans risk free only to the lenders - heads they win, tails we (taxpayers and borrowers) lose.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by whysoserious View Post
    No I don't know that I've ever said that. It's a straw man and possibly one of the largest non sequiturs I've seen. I don't even give up enough to "live like those in poverty", so I am not sure how a small bump in a progressive tax bracket would be asking anyone else to.

    That's not a very good or logical argument, j-mac.
    The actual strawman is in liberals posing that we are saying that the poor on welfare have it good....It's ridiculous...And you came out with the usual meme 'well, they should try it', And I called you on it, now you are running from your own words....hilarious....

    On a more serious note though, that IS what you and other libs believe...That the wealthy don't deserve their wealth, and that they should give most of it up so that it can be re distributed to the poor....If you want my take, I think that there should be a flat tax of say 15% across the board from the lowest, to the highest, and no cap on income, and no loophole deductions. That way it really would be FAIR!
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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by whysoserious View Post
    A bit, but really the securities are what ****ed the market. If everyone wasn't ridiculously long on the AAA-rated exotic securities, the housing bubble wouldn't have crumbled the entire stock market and US economy. It could have been handled on a case-by-case basis. Instead, people who were underwater already saw their home values drop, their financial portfolios drop, and some even lost their jobs due to a number of varying reasons.

    The bad mortgages played a role, for sure, but to put the blame squarely there seems odd to me.
    The mortgage defaults were absolutely the cause. When the housing prices crashed, millions of people walked away from their mortgages and stuck the banks with their losses. It was so much so fast that even the biggest financial institutions reeled from the losses. The sub-prime mortgage orgy set it up. The homeowners walking out on their mortgages en masse triggered it. And the credit default swaps sent the shock waves through every corner of the globe and the financial markets.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by Papa bull View Post
    The lenders didn't get any of their losses covered. Over 500 banks went out of business and the "bailouts" weren't gifts. They were loans designed to keep the key players from defaulting on their obligations. Basically, we loaned them the money to keep them afloat long enough to pay for their mistakes.
    That's just a completely misleading way to characterize what happened. First of all, much of what we spent was simply covering losses. Every dime in AIG was covering losses of the banks who were "insured" by AIG.

    And let's put it this way - I bet a bunch of homeowners could have kept their homes if they were allowed to "borrow" at near zero rates $100,000 that they could sit on for five years until conditions improved, they got a new job, housing prices rebounded.... But it's even worse than that, because the Fed then went on an extended period of QE that kept the cost of borrowing for the banks (their cost of doing business - making loans) near zero for years. I'll bet given just a little time I could pay back all kinds of low interest "loans" if the lender provided me free raw materials!

    The people that got over on us all were the individuals that decided not to make payments on their zero-down payment loans when it turned out their "investment" didn't turn out to be as profitable as they thought it would be. The same thing happened in Ireland. It should have been something to take a lesson from but so many people have the same skewed perspective you have that I wonder how long it's going to be before we do it all over again. My wife (Irish) still believes that land is a foolproof investment. Fact is, we may not ever again in our lives see land values like those stupidly high inflated bubble values that made homeowners and prospective homeowners giddy with delight. It was an orgy of financial excess for all involved; not just the lenders. The lenders were the ones left holding the bag.
    How did they "get over on us?" They went bankrupt if they didn't make the payments, lost the land and their savings. And if the lenders were left "holding the bag" that's their dang job. They begged people to take out zero down payment loans, stripped a bunch of fees and profits at every step along the way as that loan made its way to a AAA rated pile of dog crap, paid out record bonuses on the phantom 'profits' and then whine that awful credit risks don't make the payments?

    You shouldn't be screaming at borrowers who took the loans - go stand on any corner and offer $10,000 loans to everyone who walks by, see how you do. I'll be you'll get lots of business! But if you come back in a month and complain no one has paid you back, who's at fault? The person who took the loan or the idiot who loaned money to deadbeats?

    They made their beds and many more of them including some of the country's largest should have been reduced to rubble, their CEOs fired, Board fired and sued for dereliction of duty, stock reduced to penny status, debt to junk.
    Last edited by JasperL; 01-21-15 at 07:19 PM.

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    Re: The 1% will own more than the 99% by 2016, report says

    How do you lose your life savings by refusing to pay your mortgage payments on a loan that you took out with no down payment, Jasper? Answer that before going off on diatribes about how the people who walked out on their loans were just innocent victims.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by Papa bull View Post
    The mortgage defaults were absolutely the cause. When the housing prices crashed, millions of people walked away from their mortgages and stuck the banks with their losses. It was so much so fast that even the biggest financial institutions reeled from the losses. The sub-prime mortgage orgy set it up. The homeowners walking out on their mortgages en masse triggered it. And the credit default swaps sent the shock waves through every corner of the globe and the financial markets.
    But, again, the banks fought for and got the right to self regulate their reserves, and so leverage went from maybe 10-1 to 30 or 40-1. So, sure, a loss of principal of only 3% wipes them out. It's their JOB to manage that risk and they failed in their core function - massive fail.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by JasperL View Post
    But, again, the banks fought for and got the right to self regulate their reserves, and so leverage went from maybe 10-1 to 30 or 40-1. So, sure, a loss of principal of only 3% wipes them out. It's their JOB to manage that risk and they failed in their core function - massive fail.
    I agree with that. That is also why libs will be crying about lending standards being too tight. In fact, I've already heard that noise. The banks aren't anxious to lose their asses again but I'm sure some bleeding heart lib legislation that's supposed to empower people who can't really afford a home to buy a home will be proposed again. And if we are stupid enough to make the same mistake again, we'll have a similar outcome again. The banks won't be begging for it, though.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by JasperL View Post
    My answer didn't reference those payments, so no, that's not what I was talking about
    Ok

    I didn't say that either. The point was fairly simple - two parts.
    Ok, simple or not I think clarification was needed, so I asked...Is that ok with you?

    1) The lending environment was what the lenders wanted and spent $billions buying, and they got nearly 100% of their wish list checked off.
    I disagree...The lending environment was created by a law created to make sure that people who traditionally couldn't qualify for home loans, got them anyway, because it just 'wasn't fair' to use the proponents of that law's words...So, the banks, as far as I understand, were being told that the loans to these people were backed by the government, and the banks took steps to hedge their risk on the loans....Was it proper? no. Was it proper for the government to force the banks to make these loans? no.

    2) After the dust settled, what happened after the boom and bust was redistribution upwards, from the poor and middle class mostly to the banks and related financial institutions.
    More than a few banks went under as a result of this crap. And the ones that got bailed out were with the blessing of the government against the wishes of the majority of the population...

    2a) Much of the reason for that is people who defaulted lost their homes, much of their savings, etc. which is what happens, but we bailed the banks out of THEIR losses, which is NOT what is supposed to happen. It made the loans risk free only to the lenders - heads they win, tails we (taxpayers and borrowers) lose.
    I agree with that Jasper, but if I remember correctly, the administration said that they had to do this to avoid a total collapse of the banking system...So, yes, we got hosed....Guess what, under this administration, they are doing it all over again.

    Fannie and Freddie to offer 3% down payment mortgages - Dec. 8, 2014
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