Let's celebrate
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led mike wrote:
I thought the whole reason for the subprime mortgages was for the purpose of lending to people who are less able to repay the loans.
Thats my understanding also. But apparently (if I undestand things correctly) they began bundling these loans into untraceable chunks and selling them (which goes way over my head) to other banks around the world who thought they were buying safe loans. In that way, they were able to turn unprofitable loans into a reveune stream of some kind. I'm not a banker so I don't really understand how any of that works, but the banks were simply trying to deal with unprofitable practices forced upon them by the government. And now the government is using that as an excuse to dismantle capitalism. (BTW, having private corporations, such as banks, dedicated to implementing the state's political and social policies is the very definition of 'corporatsm' as originally envisioned by Musollini, and other fascists)
Please excuse my refusal to participate in the suicide of western civilization
I'm not sure why you got the 1-votes, but you are exactly right about the functioning of the loans. They were sold internationally so the sub-prime problem is not just restricted to the U.S. This[^] is a humourous (but not far from the mark) explanation of it, better than the technical one I would give you. And I agree with you - this is not cause for celebration.
Only memories, fading memories, blending into dull tableaux. I want them back.
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Have you to register to read the article? I did not :~
When they kick at your front door How you gonna come? With your hands on your head Or on the trigger of your gun?
Yup. Most of the ePapers in India require registration. And more crazy thing is that 'The Hindu' ePaper is restricted for paying readers only.
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A pessimist sees only the dark side of the clouds, and mopes; a philosopher sees both sides, and shrugs; an optimist doesn't see the clouds at all - he's walking on them. --Leonard Louis Levinson -
I'm not sure why you got the 1-votes, but you are exactly right about the functioning of the loans. They were sold internationally so the sub-prime problem is not just restricted to the U.S. This[^] is a humourous (but not far from the mark) explanation of it, better than the technical one I would give you. And I agree with you - this is not cause for celebration.
Only memories, fading memories, blending into dull tableaux. I want them back.
Thanks. I thought I had a basic grasp of the issue. This[^] is the information I had that related the problem to government social policy towards minorities and the poor. This explanation makes perfect sense to me, as financial institutions are obviously going to find more creative ways to make profits when being expected to otherwise act in ways not in their economic best interests.
Please excuse my refusal to participate in the suicide of western civilization
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This circumstance did not come because of govts requirements to not discriminate. That is a good rule. If a minority meets the same financial criteria I do, and I get a loan but he/she doesn't, that's a problem. The problem arose because of the cheap cost of money due to the very low interest rate. Companies who were greedy set out to make as much money as they could due to the basically free money. So they reduced, if not eliminated requirements for loan approval. This had absolutely nothing to do with the govt forcing them to do anything. Nothing. People without money, regardless of race/color/creed were suddenly able to qualify for morgages. There were certainly some minority neighborhoods decimated because of all the defaults. But at the same time, you have places like Nevada that are having a big problem now because of all the speculators that bought 2nd/3rd, etc. homes there because they could suddenly qualify to get money loaned to them for that purpose.
No matter how you cut it though, the problem goes back to government trying to intervene in the free market system in some way. The only responsibility a business has is to make money. They have no social responsibility which the government can compel them to comply with.
Please excuse my refusal to participate in the suicide of western civilization
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Nice one Karl. A govt propping up a private bank? Thats socialism not capitolism.
Morality is indistinguishable from social proscription
I would rather say it is pragmatism. Much better than any utopian ideology, may it be communist or ultra-liberal.
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Interesting...I didn't have to register either.
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No matter how you cut it though, the problem goes back to government trying to intervene in the free market system in some way. The only responsibility a business has is to make money. They have no social responsibility which the government can compel them to comply with.
Please excuse my refusal to participate in the suicide of western civilization
Now we agree. As the saying goes the last couple weeks, our govt has now privatized the profits and socialized the losses. I saw an MSNBC clip a couple months ago when all this started. It was an economic roundtable. One guy had the werewithall to standup and laugh at the others. Saying how it thought it wrong that there was talk about bailing out companies that were or will go belly up because of sub-primes. He was saying how they got themselves in this mess by getting so greedy. And all the other thought it okay to bail out these companies, but if you or I was having trouble paying our mortgage, well that's okay.
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Now we agree. As the saying goes the last couple weeks, our govt has now privatized the profits and socialized the losses. I saw an MSNBC clip a couple months ago when all this started. It was an economic roundtable. One guy had the werewithall to standup and laugh at the others. Saying how it thought it wrong that there was talk about bailing out companies that were or will go belly up because of sub-primes. He was saying how they got themselves in this mess by getting so greedy. And all the other thought it okay to bail out these companies, but if you or I was having trouble paying our mortgage, well that's okay.
I agree absolutely with that. I'm totally opposed to bailing out these companies regardless of the impact on the economy. A recession is a small price to pay to save capitalism itself.
Please excuse my refusal to participate in the suicide of western civilization
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I'm sure as hell not going to argue with a CFO, but I don't really see how that contradicts what I said. I am opposed to the government bailing these guys out in any way. Let them work their own problems out. At the same time, however, government should cease trying bring about social change through private entities.
Please excuse my refusal to participate in the suicide of western civilization
Stan Shannon wrote:
but I don't really see how that contradicts what I said.
Perhaps we are just having a communications problem, let's see.
Stan Shannon wrote:
The markets are self healing if the politicians would just keep their hands off of it. Hell, the entire reason this subprime loan bullsh*t became a problem is because of the government forcing lenders to not discriminate against minorities.
So there you are saying that the reason for the sub-prime problem is because the Govt forced them to lend to people that could not qualify for normal loans.
led mike wrote:
that's not at all what our CFO gave as an explanation of what happened and why. He just explained the subprime situation like 6-10 weeks ago in a company wide town hall meeting. They did it on their own for profit.
What I was attempting to say is that they were NOT forced, they did it of their own free market will for the purpose of making a profit. The Government had nothing to do with it.
Stan Shannon wrote:
The markets are self healing if the politicians would just keep their hands off of it.
Since the bail out exists it would seem you are currently the only person ( including Bear Stearns and the Fed ) who still thinks it could have healed it's self. So you must think you know better than all those people eh?
led mike
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Stan Shannon wrote:
but I don't really see how that contradicts what I said.
Perhaps we are just having a communications problem, let's see.
Stan Shannon wrote:
The markets are self healing if the politicians would just keep their hands off of it. Hell, the entire reason this subprime loan bullsh*t became a problem is because of the government forcing lenders to not discriminate against minorities.
So there you are saying that the reason for the sub-prime problem is because the Govt forced them to lend to people that could not qualify for normal loans.
led mike wrote:
that's not at all what our CFO gave as an explanation of what happened and why. He just explained the subprime situation like 6-10 weeks ago in a company wide town hall meeting. They did it on their own for profit.
What I was attempting to say is that they were NOT forced, they did it of their own free market will for the purpose of making a profit. The Government had nothing to do with it.
Stan Shannon wrote:
The markets are self healing if the politicians would just keep their hands off of it.
Since the bail out exists it would seem you are currently the only person ( including Bear Stearns and the Fed ) who still thinks it could have healed it's self. So you must think you know better than all those people eh?
led mike
led mike wrote:
So there you are saying that the reason for the sub-prime problem is because the Govt forced them to lend to people that could not qualify for normal loans.
Doesn't this[^] constitute force? I don't claim any great understanding of the process, but it is clear that the government attempts to affect the behavior of private entities in order to achieve public policy. I don't know how much that played a role in things, but it certainly cannot be excluded from consideration. Frankly, regardless of what motivated these lenders, I don't know how businesses can function without the appearance of callousness and greed. Anyone who is trying to get ahead in a free market system is going to be percieved as greedy by those who have less. I don't think that should be the standard by how we evaluate individual or corporate behavior. And I think the less we try to affect their behavior the more stable the entire process will be.
Please excuse my refusal to participate in the suicide of western civilization
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led mike wrote:
So there you are saying that the reason for the sub-prime problem is because the Govt forced them to lend to people that could not qualify for normal loans.
Doesn't this[^] constitute force? I don't claim any great understanding of the process, but it is clear that the government attempts to affect the behavior of private entities in order to achieve public policy. I don't know how much that played a role in things, but it certainly cannot be excluded from consideration. Frankly, regardless of what motivated these lenders, I don't know how businesses can function without the appearance of callousness and greed. Anyone who is trying to get ahead in a free market system is going to be percieved as greedy by those who have less. I don't think that should be the standard by how we evaluate individual or corporate behavior. And I think the less we try to affect their behavior the more stable the entire process will be.
Please excuse my refusal to participate in the suicide of western civilization
Stan Shannon wrote:
Doesn't this[^] constitute force?
Some of that certainly does constitute force and is certainly "regulation" although it is not in anyway clear what if anything specific is being forced. For example if it's only intended to keep banks from purposefully not servicing the lower income segments just because they would rather not but not because they don't meet standard qualifications then it has no connection to the subprime issue. Remember the subject we were discussing was specifically the subprime loans. And the comment in that very same page certainly seems to substantiate that the CRA legislation did NOT force anyone to give out subprime loans
Some economists claim that government policy actually encouraged the development
of the subprime debacle through legislation like the CRAApparently the strongest claim made was that it encouraged subprime lending which is definitely not force.
led mike