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

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.
 
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.
 
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.
 
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!
 
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.
 
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.
 
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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.
 
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.
 
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.
 
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
 
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.

Where did I call them "innocent victims." I'm just not blaming deadbeats for taking banks up on their offer to borrow money, no down payment, no job, no income check, etc. The core function of a bank is to make loans to people who can pay them back. During the bubble, they thought they didn't care if the borrowers could pay them back because they thought they could offload the default risk to some widow in Topeka Kansas who bought AAA rated dog crap. So they thought all the borrower had to do was stay current for 90 days or less and they were off the hook. So sad there was too much dog crap the banks weren't able to offload on their "customers."

And I don't know how these borrowers managed to discharge the mortgage with a bunch of savings socked away that they just decided not to put towards their mortgage. In which bankruptcy court is this allowed? Sure, I guess some were able to commit a crime and hide assets from creditors and "walk away" but you have to know that's not how the bankruptcy system works for ordinary people in America.
 
jmotivator;1064222812]FALSE! This is patently and demonstrably false. Creation is ALWAYS an available option so wealth creation is always available.

This is correct. It does not, however, disprove the FACT that only SO MUCH can be created within a set amount of time.
 
Where did I call them "innocent victims." I'm just not blaming deadbeats for taking banks up on their offer to borrow money, no down payment, no job, no income check, etc.

You should be blaming the deadbeats for walking away from their obligations. They borrowed money with a promise to repay the loan and they reneged on their part of the deal. They left the banks and the taxpayers to take the loses for their bad purchases and their defaults.
 
The faster they can get to 100% , the sooner it will start trickling down.
Yeah but they need more tax cuts first. Seriously. How else will they keep on making good paying jobs and make America strong again. :roll:
 
Ok, simple or not I think clarification was needed, so I asked...Is that ok with you?

Yes, I'm taking out on you what is my problem with the system. My apologies.

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.

We've had lots of threads on this topic, but my reading of the environment, and I've read a number of books from different perspectives on the crisis, is there was little to nothing being forced on banks. The GSEs were a bit different because they had a mandate of sorts to make 'affordable' loans and we backed them with taxpayer guarantees, but made them into the ultimate crony capitalism example of a public guarantee, massive private profits. But outside the GSEs, and I know it's hard to separate them, it's my reading that the lenders thought they'd found a way to genuinely eliminate or nearly so the risk of making loans to deadbeats with various forms of derivatives that functioned as "insurance" of a sort. Only problem is the "insurers" had no ability to make good on those losses. They effectively wrote insurance they had no ability to cover. Point is, the vast majority made the loans because they made record profits doing so, and didn't account for the actual risks involved.

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...

I agree with that, and I also recognize that the banks had to be bailed out. We couldn't see the system collapse. My only wish was at least the people who led their companies into ruin paid a price, and many did not. It makes me ill to hear some of them come on TV now and whine about their poor banks being regulated. Boo hooo - don't want to be regulated, don't come running to the taxpayer when your banks is collapsing. That's the "free market."

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

Yes, I am not here to defend Obama. I think he failed in this area and set some terrible precedents, and one of the greatest disappointments was early on when he appointed Geithner and Summers - two guys who DIRECTLY pushed for and signed off on the system that collapsed. Their advice was catastrophically wrong. In a sane world, they are nowhere near any lever or power again, ever.

The whole process forced me to rethink the relationship between government and Wall Street et al and who actually wields power in this country. I'm getting more and more convinced we don't ever even see the people wielding actual power, and we (and by this I also mean almost all of the nominal power structure as well) surely get no say in what they do.
 
You should be blaming the deadbeats for walking away from their obligations. They borrowed money with a promise to repay the loan and they reneged on their part of the deal. They left the banks and the taxpayers to take the loses for their bad purchases and their defaults.

Well, yeah, we can blame the dead beats, which I do....but I also blame Clinton for FORCING banks to lend to some of these people.
 
Yes, I'm taking out on you what is my problem with the system. My apologies.



We've had lots of threads on this topic, but my reading of the environment, and I've read a number of books from different perspectives on the crisis, is there was little to nothing being forced on banks. The GSEs were a bit different because they had a mandate of sorts to make 'affordable' loans and we backed them with taxpayer guarantees, but made them into the ultimate crony capitalism example of a public guarantee, massive private profits. But outside the GSEs, and I know it's hard to separate them, it's my reading that the lenders thought they'd found a way to genuinely eliminate or nearly so the risk of making loans to deadbeats with various forms of derivatives that functioned as "insurance" of a sort. Only problem is the "insurers" had no ability to make good on those losses. They effectively wrote insurance they had no ability to cover. Point is, the vast majority made the loans because they made record profits doing so, and didn't account for the actual risks involved.



I agree with that, and I also recognize that the banks had to be bailed out. We couldn't see the system collapse. My only wish was at least the people who led their companies into ruin paid a price, and many did not. It makes me ill to hear some of them come on TV now and whine about their poor banks being regulated. Boo hooo - don't want to be regulated, don't come running to the taxpayer when your banks is collapsing. That's the "free market."



Yes, I am not here to defend Obama. I think he failed in this area and set some terrible precedents, and one of the greatest disappointments was early on when he appointed Geithner and Summers - two guys who DIRECTLY pushed for and signed off on the system that collapsed. Their advice was catastrophically wrong. In a sane world, they are nowhere near any lever or power again, ever.

The whole process forced me to rethink the relationship between government and Wall Street et al and who actually wields power in this country. I'm getting more and more convinced we don't ever even see the people wielding actual power, and we (and by this I also mean almost all of the nominal power structure as well) surely get no say in what they do.

I think for the most part we have agreement here....Thanks for explaining further. :)
 
You should be blaming the deadbeats for walking away from their obligations. They borrowed money with a promise to repay the loan and they reneged on their part of the deal. They left the banks and the taxpayers to take the loses for their bad purchases and their defaults.

Those deadbeats didn't represent themselves as financial experts.

The banks are supposed to be financial experts, and to be reasonably good judges of risk. Our banking system failed horribly at doing what it is supposed to do. We probably should have used a magic 8 ball to determine who was qualified for a loan, as there would have only been a 1 in 8 chance of "yes" appearing.
 
You should be blaming the deadbeats for walking away from their obligations. They borrowed money with a promise to repay the loan and they reneged on their part of the deal. They left the banks and the taxpayers to take the loses for their bad purchases and their defaults.

Like I said, if you stand on any street corner begging people to take $200,000 NINJA, negative amort, zero down, 110% loans, etc. you'll get an endless number of people willing to borrow money. But if you go bankrupt, I won't blame the people accepting the money. Your sole job as lender is to lend to those who can repay, and to manage the risk to cover the losses of those who will not.

I'm not calling the borrowers victims, but the idiot is the person BEGGING deadbeats to take their money. They thought they'd rewritten the rules on risk and eliminated it. They were catastrophically wrong. Really, who believes in low risk, high return investments? Suckers is who. The banks were the suckers. They're paid 7 and 8 figures to be smarter than that.

Well, they were partially right - we bailed some of them out so they did get low risk, and high returns! Bad on us....
 
Well, yeah, we can blame the dead beats, which I do....but I also blame Clinton for FORCING banks to lend to some of these people.

Which Clinton didn't do. That's not even logical. Seriously, think about it...

Most of the defaults between 2007 and 2011 were on mortgages issued between 2002 and 2006. How do you blame that on Clinton?

And bankers were getting bonuses by the wheelbarrow load to make bad loans. You don't actually have to force someone to accept wheelbarrows full of money, not the last time I checked.

How many banks were shut down or fined because they weren't making enough subprime loans? I'll give you a hint, zero.

Most of the subprime loans in existance at the start of the financial burst, were not even issued by commercial banks. The ARA was only applicable to commercial banks.

The concept that the financial crises was caused by the ARA is a right wing myth, imagined into existence by bankers who didn't want to accept responsibility for their screw ups, and spread by those who worship those who became rich by corruption.
 
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.

I'm not sure why you need to make this partisan. There were plenty of GOPers including Pres. Bush and his team of regulators cheering this whole affordable lending thing and doing their part to keep the party going. It's really not a partisan issue IMO. I can find all kinds of blame in all periods and pin it more or less at will on whoever was in the regulators chair or the committee chair in the House or Senate or POTUS, and party makes little to no difference that I've been able to see.
 
Like I said, if you stand on any street corner begging people to take $200,000 NINJA, negative amort, zero down, 110% loans, etc. you'll get an endless number of people willing to borrow money. But if you go bankrupt, I won't blame the people accepting the money. Your sole job as lender is to lend to those who can repay, and to manage the risk to cover the losses of those who will not.

I'm not calling the borrowers victims, but the idiot is the person BEGGING deadbeats to take their money. They thought they'd rewritten the rules on risk and eliminated it. They were catastrophically wrong. Really, who believes in low risk, high return investments? Suckers is who. The banks were the suckers. They're paid 7 and 8 figures to be smarter than that.

Well, they were partially right - we bailed some of them out so they did get low risk, and high returns! Bad on us....

Jasper, there is no way to honestly characterize the banks situation as low risk and high returns. High risk and high losses are the truth of the matter. Why do you think Obama is trying to twist their arms to liwer lending standards AGAIN? Hint: Because the banks don't WANT more high risk, low return loans. If it was the party you make it out to be, they'd be doing it without any arm twisting.
 
Well, yeah, we can blame the dead beats, which I do....but I also blame Clinton for FORCING banks to lend to some of these people.

Hilarious - is this serious? Blaming Clinton for loans made years after he left office? In my world, all I heard were non-stop radio and TV ads begging 'these people' to take out loans. Didn't see anyone forcing anyone to lend....
 
Hilarious - is this serious? Blaming Clinton for loans made years after he left office? In my world, all I heard were non-stop radio and TV ads begging 'these people' to take out loans. Didn't see anyone forcing anyone to lend....

And those ads weren't advertising commercial banks. There were advertising mortgage companies, who aren't even subject to the ACA! No POTUS ever forced any mortgage company to make a single loan.
 
the worst thing you can do for your children is to make life easy for them......

educate them, then show them the door.

I wasn't thinking of would be easy, just imagining all that money going from hand to hand to hand to hand before it pools at the top and stays there, ring used for extractive activities and adding no value.
 
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