Here's yet ANOTHER great look at how the current credit crisis started. They call what I've termed credit-socialism, "loan affirmative action" and that's a fair enough term for it. Bottomline, brokers made money off of unsafe loans, unfit borrowers received loans they shouldn't have qualified for...and WE PAID...or I should say, WE'RE ABOUT TO PAY FOR IT ALL!
Friday, October 10, 2008
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It's funny, and I guess I can admit it now that I am no longer buying this particular home. But back in '01 when my ex and I went looking to purchase a home, we were approved by a loan agency (under the table) while knowing we shouldn't have been.
So, yes, I agree with this video, even if it dates back to the Clinton Administration.
Also, JMK, I see that you love discussions - I'd like to invite you to check out Mr. Bingley's blog - both you and he exhibit extreme knowledge concerning a variety of subjects, especially politics. You will love his forum members as well.
Link: http://www.coalitionoftheswilling.net/
Don, same thing happened to my wife and I in 2005.
We'd sold one house and were buying another. We had more than 20% down and we did the math (my wife's an accountant and very fastidious about facts and figures) and figured out the max mortgage payment we'd be comfortable with.
We pretty much went by traditional loan guidelines - no more than 2 1/2X your annual income and no more than 30% of your take-home pay per month.
The mortgage broker, with a straight face said, "I could give you THAT on either one of your salaries, so you guys can take out a lot more than that!"
Here's how much of a dolt I was Don, I didn't figure out, then and there, that we were heading for a calamity...I SHOULD HAVE, because economic laws are pretty much like gravity - you can only defy them for so long.
I DO feel really bad for those people encouraged to take out more than they could afford to pay...and I even feel sorry for the banks who were forced after 1995 to dole out tons of these high-risk loans. That's no different than Congress telling Supermarket owners that they must sell their goods BELOW cost, and then telling them, "Don't worry, we'll bail you out later and you'll make a killing, while the public gets killed."
Again, it's a deal you can't refuse; (1) Congress is mandating it by law and (2) promising to bail you out big time at the end.
The real villains to me are those in government (Barney Frank and Chris Dodd most of all) BUT plenty of people in BOTH Parties - lots of Republicans supported the Jack Kemp "Ownership Society" that claimed that "The magic of home ownership would transform former deadbeats into more responsible, more productive and ultimately more Republican people."
They had that backwards.
Owning property doesn't make better people, it's that better or higher caliber people aspire to own property.
I have no doubt you'd seek to own property yourself without inducement from the likes of Sen. Dodd and Rep. Frank because you're a high quality person.
The problem, the "economic gravity" we've run into here is that creating credit out of thin air is no different than creating money out of thin air...ultimately it leads to an implosion and devaluing of the economy.
I'll definitely head over to Mr. Bingley's blog, although I'm heading to Reno. Leaving around 4 am this coming morning (Sunday) and won't be back until real late Friday night....I'm scheduled to attend a Flammable Liquids course for the Fire Dept.
The hardest part is leaving my wife...it's really hard.
I made her a huge pot of shrimp and sausage gumbo to last her the week, so even when she gets home late, she can just heat it up.
I think this will be the tenth course (about 12 weeks total) I've been to over the last three years.
I can't wait til Friday.
P.S. Have you got a chance to check out Smokin' Aces yet?
jmk, the case that democrats were the genesis of this global mess has been made more then clear. The problem is that John McLame isn't naming any names. If he doesn't wake up and finally and forcefuly start pinning the blame where it rightfully belongs, he will lose to Obama period. I am sick and tire of hearing McCain talk about how he can reach across the aisle and work with Democrats and how he will eliminate earmarks. I thought I was going to blow a brain cell when I heard him at a rally tell supporters that they have nothing to fear in an Obama administration!!! RULE NUMBER ONE IN CAMPAIGNING, NEVER TALK UP YOUR OPPONENT AMONG YOUR OWN BASE!!!This election is winnable but McCain is letting it slip away and it is frustrating as hell watching it happen jmk!
"The problem is that John McLame isn't naming any names. If he doesn't wake up and finally and forcefuly start pinning the blame where it rightfully belongs, he will lose to Obama period." (Tyrone)
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That certainly is the problem with the McCain camp's strategy.
In fact, he looks old, tiered and unenthusiastic.
Bottom-line I think working people have a LOT to fear period...from either an Obama or a McCain administration.
Tell me how McLame (as you rightly refer to him) is going to justify erasing soem individual's bad debt without engendering righteous resentments.
Say McCain says to all of those swamped with higher mortgages than they can afford, Don't worry, we're going to reduce the principle AND the interest rate for you (translation: GIVE YOU GOBS OF MONEY, cause that's what that is) so you can stay in this home you really can't afford."
OK, what about all the rest of country (the other 90+%) who DIDN'T take out huge mortgages they couldn't afford?
Where's their free money?
Personally, I think we're heading for some HORRIBLE times no matter which one of these nitwits gets in.
We're a very spoiled nation right now. Even the so-called "poor" in America are spoiled.
We've had fifteen years of single digit Misery Indexes under two Supply Side administrations (Clinton's and Bush's)...in FACT, of the two of those, ironically enough, Clinton was actually MORE of a Supply Sider than Bush!
Yes, Clinton benefitted from six years of Conservative-Republican rule in Congress. It was the Gingrich Congress that cut federal spending and created those surpluses AND the lowest Misery Index in 0ver four decades in 1998, when it hit 6.04!
Bush was fortunate to have a Republican Congress his first six years, eeven though the Hastert Congress was far more spendthrift than any previous Republican Congress....this year the Misery Index is at 9.9 and rising. It was 11.47 this past August. I expect this to be the first year of MANY double digit Misery Indexes to come...no matter who gets in.
jmk"In fact, he looks old, tiered and unenthusiastic."
That's a massive understatement jmk lol
There was a story written in the New York Post about conservatives warning the GOP months ago that McCain was the wrong guy to go up against Obama. I can't stand Obama's gutts jmk, but the guy is forceful when he speaks. That does inspire his kooky base along with swaying independents. If I hear McCain say "my friends" one more time, I'm going to throw my television out the window! The golden rule in politics is "THERE ARE NO FRIENDS". I wish in the last few weeks I could run in McCain's place and show him how it's done. He needs to stop worrying about what the media is saying about him going negative. To hell with the media, the media is on Obama's side. Think about his for a sec jmk. McLame brags about Palin being a pitbull yet he doesn't want her to attack Obama but she wants to attack!! A negative attack in my book is one that is full of lies. The attacks on Obama have all been true, so they are fair game. I don't think I can watch the debate Wednesday, it will be to depressing to watch.
jmk "Say McCain says to all of those swamped with higher mortgages than they can afford, Don't worry, we're going to reduce the principle AND the interest rate for you (translation: GIVE YOU GOBS OF MONEY, cause that's what that is) so you can stay in this home you really can't afford.""
I want to bang my freaking head against the wall jmk. I am willing to bet my lifes fortune that 97% or higher of those subprime mortgages had boworrors that didn't put down much money if any for a DOWN PAYMENT or had a crap ass credit score.No wonder those people walled away from those homes leaving the banks up crap creek. Those borrowers didn't have vested interest in those home to begin with by not putting any money down. It sounds like McCain's plan to reduce people's principal balance is PURE PANDERING 101 ALONG WITH SOCIALISM 102!
JMK "Personally, I think we're heading for some HORRIBLE times no matter which one of these nitwits gets in."
I was thinking the exact same thing a few days ago jmk. This goes to show how absolutely ignorant our country has become. People actually think Obama will be better for the economy then McCain, thats why he is leading. McCain we both know doesn't have a clue about the economy, but what is Obama's expertise? He's a lawyer and a community activist. Why would anyone with a respectable IQ think that a hardcore socialist like Obama can fix or truly want to fix the capitalist free market system? That's like 2+2=7
When I bought my first home in the 1980's, it wasn't easy getting a loan and I needed 20% down. Things changed in the last 5 years. I was getting notices in the mail that I was pre-approved for mortgages well over what I would be willing to accept.
Unfortunately, too many Americans seem to be incapable of understanding the philosophy that got us into this mess. If they really knew what was going on, both political parties would be run out of Washington on rails.
"That's a massive understatement jmk lol
There was a story written in the New York Post about conservatives warning the GOP months ago that McCain was the wrong guy to go up against Obama. I can't stand Obama's gutts jmk, but the guy is forceful when he speaks." (Tyrone)
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I agree completely. It IS an understatement.
The Conservatives were RIGHT!
In fact, it wasn't just mcCain - Guiliani and Romney, initially his two main rivals, weren't really Conservative either.
I laud what Guiliani and Bill Bratton did in NYC, but Rudy is a "Big Government Conservative," who supports gay rights, strict gun control and a host of other things that are anathema to most Conservatives.
Romney too, coming from a very Blue area (MA) has a rather Left-of-Center pedigree, at least socially speaking AND his "Romney-care" (on which Obama-care is modeled) has been a disaster in the Bay State.
Still, I don't think it's a stretch to say that McCain was a worse (less acceptable) choice than either to Conservatives. It is only Obama's hard-Left stands that make McCain look at all OK, but he's seemingly been doing everything possible to alienate the people he needs most (Conservatives).
When I heard a McCain in which he promised that he could "bring down food and gas prices" I was flabergasted.
YES, scrapping the corn-based ethanol program will reduce the upward pressure on food prices and drilling here WILL bring more oil to market and increase the global supply of oil, thereby reducing its price, BUT the ad came off as a carnival barker, huckster.
Then, on top of that, McCain talks about the government taking over individual's bad mortgages, but letting them stay in the houses they couldn't afford to pay for!
WoW! Where's the other 95% of America's FREE MONEY?!
You know what's worse?
The ONLY reason to really consider McCain in the midst of the government-caused credit crisis is to hope that he'd go after the likes of Barney Frank and Chris Dodd, but he's NOT can't even muster the requisite anger against those two!
Bottom-line, McCain sees Dodd and Frank as "collegaues," and probably WON'T go after these guys even if given the chance.
THAT, more than ANYTHING else, makes me remember why I DESPISE so-called "Moderate" (Country Club) Republicans, like John McCain, Bob Dole and Christie Whitman.
There's a shit-storm coming and it's really going to hurt.
"I want to bang my freaking head against the wall jmk. I am willing to bet my lifes fortune that 97% or higher of those subprime mortgages had boworrors that didn't put down much money if any for a DOWN PAYMENT or had a crap ass credit score." (Tyrone)
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Here's the WORST thing about all that; it plays the other 97% of Americans who DIDN'T go out and buy homes they couldn't afford to pay for and take out mortgages they couldn't repay as suckers!
Where's THEIR "free money"?!
I can't see any of this going well. We haven't even paid a penny on this economic tsunami...we haven't even felt a gentle breeze from it yet....YET, but it's coming and by coming, I mean a weakened private sector, with huge layoffs, spiking the unemployment rate, LOWER Municipal revenues forcing cities and states to lay off government workers - teachers, cops, firefighters, social-workers, etc., government pension funds going belly up...this is a tidal wave that is still 100 miles from shore!
No one sees the real devastation possible, but it's coming and with the two nitwits running right now, I don't see any way this thing doesn't wind up worse than my own worst nightmares.
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"Why would anyone with a respectable IQ think that a hardcore socialist like Obama can fix or truly want to fix the capitalist free market system? That's like 2+2=7" (Tyrone)
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Agreed! The economic IQ of the average American is incredibly, stultifyingly low, but that's partly a function of a MSM that derides the market and lauds socialist policies whenever possible.
Our media is generally DUMBER (at least economically) than the general public...if that's possible.
So, the fact is that all too many Americans don't LIKE the market, don't TRUST the market and want government to fix everything....man, are they going to be disappointed!
"...too many Americans seem to be incapable of understanding the philosophy that got us into this mess. If they really knew what was going on, both political parties would be run out of Washington on rails." (Uncle Sloane)
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Yes, 100% right!
BOTH major Parties have let the people down and BOTH have been far more devoted to protecting the "political class," rather than looking out for the best interests of this country.
In short, until (or UNLESS) we wake up, we're screwed big-time.
If people are mad now, they're about to become furious, because this really could ultimately be the end of the current system, as we know it. This could very easily swamp pension funds, force massive public sector layoffs (on a scale far more massive than the 1970s) and wreak unspeakable economic havoc on, not just America, but the entire industrialized West.
great find and the Dems keep denying denying denying!
jmk "In fact, it wasn't just mcCain - Guiliani and Romney, initially his two main rivals, weren't really Conservative either."
Conservaitves are stuck between a rock and a hard place jmk. If McCain does pull this off and win, then the RNC is going to truly think they can win elections without a pure conservative running, and McCain's administration will be worse then Bush's in regards to following conservative principal. One the other hand if McCain loses to Obama, then conservatives are validated in showing the RNC that they can't win by putting pseudo. conservative aka neo cons on the ticket and thinking true conservatives will overwhelming support them. If Obama wins, then there will surely be a massive push to re institute the "fairness doctrine". That is a massive negative. One the bright side, 2012 will be prime for Governor Jindal to run. See what I mean jmk. win or lose, conservatives will have a some huge problems to deal with.
wow, i'm so late to the party, guess i need to get a day stretcher. jmk, i've been pointing out for a long time (as you well know) that john mccain is not OUR nominee, but rather the nominee the msm allowed us to have. they KNEW he would be the easiest to defeat regardless of which democrat ultimately got the nomination.
sadly, we need mclame to win to save the country from obama. then we go about the business of saving the country from mccain.
btw, great job on this one.
One of the problems Conservatives had this year was that NOT one of the major nominees was at all Conservative.
OK, Fred Thompson, Mike Huckabee and Mike Gravel were all, to some degree "Conservative, but none of those were taken all that seriously by enough Conservative voters in either Party.
Of the final three GOP candidates, Guiliani, McCain and Romney, NONE were traditionally Conservative.
Of those three, Romney seemed the most Conservative despite his past flirtations with social Liberalism, a la Rudy G.
The problem with the RNC is that they refuse to realize they are in a "fight for their lives," so they refuse to run effective ads like this one; http://www.youtube.com/watch?v=exxVZTKq1vA
In short, Heidianne, I fear that McCain now faces a very uphill struggle....he'll need one heck of an "October Surprise."
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