A Ledgie wants to know: Economy Edition

[HejiraNYC]

Oil is at record highs, gold is at record highs, the U.S. dollar is at record lows against the Euro, inflation is out of control yet incomes are flat, unemployment is spiking upward, housing values are tanking, the U.S. banking system is on the verge of collapse, house foreclosures are way up, the national debt is nearing 9 trillion dollars, jobs are being exported, there is an unending war costing U.S. taxpayers $12,000,000,000 per month, etc.

How is everyone weathering this economic *****storm? Business as usual? Cutting back? Better than ever? On the edge of financial ruin? A Ledgie wants to know!

[strandinthewind]

Fortunately, my job is mostly immune from economic changes - knock on wood.

I got rid of my house a year or so ago and I have no car anymore (I use zip car) because I am trying, as you know, to move to Manhattan. So, I think the economic downturn could actually help me there in that rents could be lowered or effectively lowered as a result.

I have, however, lost a bundle in my 401(k) and such. But, history demonstrates that a diversified portfolio, over the long run, is fairly safe - and I am not retiring anytime soon, much to my regret.

Of course, like Vera Charles - I spend way more than I make. I need to marry well (again :cool: )

How are you?

[SuzeQuze]

I'm buying a foreclosure (condo) so I'm benefitting from the downturn. Which I hope does not continue downward. I bought a Miata in Nov which is not as good on gas as my Toyota was but that is the only con of that car. It is awesome and I love it. It gets decent gas mileage, the Toyota's mileage was just extraordinary. But I drove that baby into the ground after 211k miles. To buy the condo I liquidated my 401k. It's been flat anyway and I figured this calculated risk would pay off. We shall see. The appraiser thought the condo, at its price, was a no brainer to buy. Exactly what I think. So it's all good.

As far as employment we are also mostly immune to a downturn. I just got a raise actually. In '01 I was laid off so I know what it's like to be negatively impacted during an economic slump. It sucks and I feel for any of you suffering this way.

[JazmenFlowers]

Oil is at record highs, gold is at record highs, the U.S. dollar is at record lows against the Euro, inflation is out of control yet incomes are flat, unemployment is spiking upward, housing values are tanking, the U.S. banking system is on the verge of collapse, house foreclosures are way up, the national debt is nearing 9 trillion dollars, jobs are being exported, there is an unending war costing U.S. taxpayers $12,000,000,000 per month, etc.

How is everyone weathering this economic *****storm? Business as usual? Cutting back? Better than ever? On the edge of financial ruin? A Ledgie wants to know!
I've really been paying attention to everything you mention. this morning they talked about one investment firm dropping like 93% this morning. it's all rather scary. luckily, I'm doing well. I hate my job so the fact that the job market is in the toilet isn't fun, but at least my job is stable and I'm pretty secure. I make good money, have a nice home and a nice car and I'm able to pay my bills. I just paid off my HUGE credit card so that's even better. I still have a few small cards that I really should pay off. like everyone else though, I spend way too much on trips and clothes and crap.

[HejiraNYC]

Fortunately, my job is mostly immune from economic changes - knock on wood.

I got rid of my house a year or so ago and I have no car anymore (I use zip car) because I am trying, as you know, to move to Manhattan. So, I think the economic downturn could actually help me there in that rents could be lowered or effectively lowered as a result.

I have, however, lost a bundle in my 401(k) and such. But, history demonstrates that a diversified portfolio, over the long run, is fairly safe - and I am not retiring anytime soon, much to my regret.

Of course, like Vera Charles - I spend way more than I make. I need to marry well (again :cool: )

How are you?

I *think* my job is also mostly immune from the whims of the economy; however, I never take it for granted. I recently switched to a new position, but it's located in NJ :eek: :eek: :eek:. Between gas and the $8 Holland Tunnel toll, my commuting expenses are astronomical. However, now I don't need to pay for a parking garage space since I am in my car almost every day. That should save $315 per month. Plus I get to shop more frequently in NJ, where the prices and sales tax are lower.

I don't even look at my 401(k) statements anymore :eek:. However, despite the online insistence that I increase the percentage invested in stock annuities, I have fortunately diversified into foreign market funds and bond-backed funds.

Food is a bit more expensive, but it's all relative. Between Trader Joes and Chinatown (and not eating meat), I actually spend much less than most people.

I hate to admit it, but I find the bloodbath on Wall Street to be well-deserved and a long time coming. Schadenfreude is my middle name. They have been so careless and irresponsible with other people's money, and they have paid themselves obscene amounts of money. Moral hazard? What's that? They will make a killing if the market is up, and the government is going to bail them out (as they are right now) if the market is down. It's all-win for them. And when you have so many people making such obscene amounts of money concentrated in a single area, you get the Manhattan real estate market, which is pretty much untouchable by the middle-middle class. When all of these arrogant douchebags on Wall St. finally get laid off, fined or imprisoned, only then will Manhattan return to being an interesting place full of artists, regular families and, heaven forbid, diversity. As of late Manhattan has been all about black Town Cars, banks, Starbucks, suits and $15 cocktails. The revolution is finally here, thank Buddah!

As for spending... I'm still working on my house. :eek: That's where all my money goes. This spring I have to get down to landscaping, decking and maybe even a pool...

[strandinthewind]

I think the fall of Wall Street can be nothing but a bad thing in that if that happens, the US and world will suffer. As for the large salaries, I am not opposed to them becuase that is what the market is paying. Now, if they break the law, that is another thing.

As for the housing market tanking - housing prices overall in the US have fallen, but not by huge amounts. That will change though if a few things happen.

The first is no matter how much you owe on your house or how much the value of your house has fallen, it is all academic until you have to sell the house. In other words, as long as you make the payment, you likely will ride out any decline in value that likely will go up again.

The second is right now, only seven or so percent of houses are in forclosure. That is a relatively high number but it is no staggering enough to drive housing prices down but a few percentage points overall - though some areas will be effected more. If, however, that foreclosure number gets to, say 15-20 percent, then I think housing prices and values will spiral to over 50% or so. This is because the market will be flooded with product and not enough qualified buyers. In layman's terms, it will be a fire sale. I do not see the Feds letting that happen though. In reality, the bankruptcy laws likely will prevent that as well. If you cannot make your house note right now because it along with the average credit card debt is too much, the smart thing to so likely is to declare bankruptcy. A Chapter 7 will wipe out all unsecured debt like credit cards and you can keep your house and possibly renegotiate the terms of the mortgage, though that is very hard to do now, but likely will be easier as this crisis moves on. A Chatper 13 plan will not wipe out your debt, but it will exclude your house from the plan and you pay anything remaining to the creditors, which can be as little as 25% - over a five year period. Yes, bankruptcy is a harsh option and your credit is ruined for awhile (but certainly not forever, esp. if you make a good salary) - but, it is no worse than losing your house in a foreclosure and defaulting on the credit cards as well.

In the end, during the last part of the 90's the tech bubble caused havoc and many of the largest companies in the US imploded, causing massive layoffs and investors to lose trillions. The economy bounced back (ironically, mostly though housing) then and it will again.

So, in the end, pay cash for your stuff and make your mortgage and you will be fine.

[strandinthewind]

. . . As for spending... I'm still working on my house. :eek: That's where all my money goes. This spring I have to get down to landscaping, decking and maybe even a pool...

You do realize that the mere though that you are builing a cool new house with a pool is as repugnant to some (arguably the very poor) as the Wall Street excess are respugnant to you :shrug: So, in the end, I say as long as someone is not breaking the law, I do not begrudge them for making millions, or, in our case, a good salarythat affords some luxuries.

[rubytuesday]

I'm not in the Us but there has been a wave of economic stability. People in there 30s are expecting and a lot are getting what their parents generation had to work their lives for. I just think that there has to be a market crash in the near future. These things don't keep going up or maintaining that level forever. It seems like a matter of when and then all these people whose jobs supposedly aren't affected, those enjoying the good wave will suddenly find their vacation cut short.

[SuzeQuze]

Strand I think he was just speaking to the vapid greed that many stockbrokers and other business people have been justifying for years. People should be well-paid in a lucrative business. But they have to have some ethics. It's just a law of the universe, lack of humility will be corrected.

As far as why my job is sort of immune to downturn, we sell textbooks largely to universities and high schools. It would take extreme circumstances for those markets to dry up, which I hope we don't see.

[strandinthewind]

I'm not in the Us but there has been a wave of economic stability. People in there 30s are expecting and a lot are getting what their parents generation had to work their lives for . . . .

I think you hit on the main issue. Society in general and I suggest not just in the US (though perhaps more so here who knows) wants everything now. I think many of these people bought houses they knew they could not afford even before their payments went up with interest rates. I know many people who bought too expensive a house when others that were less expensive were available and then they pay $40,000 a year for their two kids to go to private schools and they have $40,000 in credit card debt because they cannot do without or make due. I think we all have some of this drama in our lives, but others seem to go further.

Note - there are many hard working conservative people who are losing their houses through no real fault of their own. I am not talking about them.

[strandinthewind]

Strand I think he was just speaking to the vapid greed that many stockbrokers and other business people have been justifying for years. People should be well-paid in a lucrative business. But they have to have some ethics. It's just a law of the universe, lack of humility will be corrected . . . .

But, if someone is making that money legally, then how is that any different then what we do every day to make that money. Yes, we certainly do not make that much money, but what we make and how we spend it would seem just as awful and immoral to someone living in a box under a bridge :shrug: Moreover, many argue school books should be free and certainly no profit should be made off of them. I am not saying this personally. I am just saying that if you judge others, then you cannot be pissed when someone judges you :shrug:

[SuzeQuze]

But, if someone is making that money legally, then how is that any different then what we do every day to make that money. Yes, we certainly do not make that much money, but what we make and how we spend it would seem just as awful and immoral to someone living in a box under a bridge :shrug:

I don't know that that is true. I haven't spoken to anyone under a bridge lately. I just mean that if financiers are doing shady things to inflate stocks and fleecing the little guys it's just bullsh*t.

[strandinthewind]

I don't know that that is true. I haven't spoken to anyone under a bridge lately. I just mean that if financiers are doing shady things to inflate stocks and fleecing the little guys it's just bullsh*t.

I agree, if they are doing something illegal, they should be in jail.

[HejiraNYC]

I think the fall of Wall Street can be nothing but a bad thing in that if that happens, the US and world will suffer.

I think Wall Street, if not the U.S. economy as a whole, has been like the emperor's new clothes. The U.S. dollar (which has not been backed by the gold standard for a long time), combined with the lack of a manufacturing base, has really been held aloft by speculation and the notion that it is the de facto exchange currency due to its relative stability. That notion is drawing to a close as investors become wary of the true value of the dollar, combined with the emerging super-economies in Asia and the lack of confidence due to what I believe are some hasty, irresponsible interest rate cuts. In a nutshell, why would you have faith in a monetary policy that insists that you simply crank up the printing presses every time there is a tightness in credit.


As for the large salaries, I am not opposed to them becuase that is what the market is paying. Now, if they break the law, that is another thing.

There is the law, there are ethics, and then there is common decency. None of these are regulating the behaviors on Wall Street. How can you break the law when there aren't that many laws to break in the first place? Wall Street created this mess by borrowing money recklessly and lending money to anyone who can fog a mirror (which in turn caused the housing buble). They packaged these liar loans into securities that they deceptivelyresold as "AAA" rating at premium prices, paid themselves handsomely, and basically did nothing except pay themselves even more when it all came out in the wash. These securities ended up not being worth the paper they were printed on. But instead of taking responsibility for their own reckless, irresponsible behavior, they called on the U.S. government, i.e., the U.S. taxpayers to bail them out. And the bailout is now just beginning to the tune of hundreds of billions of dollars. We are left holding the bag while these amoral criminals are riding off into the sunset with their golden parachutes. I don't know how anyone can find this anything less than outrageous.


As for the housing market tanking - housing prices overall in the US have fallen, but not by huge amounts. That will change though if a few things happen.

Some markets like Las Vegas, Phoenix, San Diego and Miami are already down by as much as 25%. And we are just getting started. Unfortunately New York has been able to fend off the housing crash so far, but I don't see how much longer the party can last here.


The first is no matter how much you owe on your house or how much the value of your house has fallen, it is all academic until you have to sell the house.

Agreed, aka, "mark-to-market."


In other words, as long as you make the payment, you likely will ride out any decline in value that likely will go up again.

On an inflation-adjusted basis, it will be decades, if ever, before prices reach this level again.


The second is right now, only seven or so percent of houses are in forclosure. That is a relatively high number but it is no staggering enough to drive housing prices down but a few percentage points overall - though some areas will be effected more.

That is actually an incredibly high percentage; the areas that had the highest subprime loans and/or speculation will be pummeled.


If, however, that foreclosure number gets to, say 15-20 percent, then I think housing prices and values will spiral to over 50% or so. This is because the market will be flooded with product and not enough qualified buyers. In layman's terms, it will be a fire sale. I do not see the Feds letting that happen though.

But what can the Fed do besides cutting interest rates (which do not necessarily correspond to mortgage interest rates)? They're running out of wiggle room before cutting all the way down to 0%.


In reality, the bankruptcy laws likely will prevent that as well. If you cannot make your house note right now because it along with the average credit card debt is too much, the smart thing to so likely is to declare bankruptcy. A Chapter 7 will wipe out all unsecured debt like credit cards and you can keep your house and possibly renegotiate the terms of the mortgage, though that is very hard to do now, but likely will be easier as this crisis moves on. A Chatper 13 plan will not wipe out your debt, but it will exclude your house from the plan and you pay anything remaining to the creditors, which can be as little as 25% - over a five year period. Yes, bankruptcy is a harsh option and your credit is ruined for awhile (but certainly not forever, esp. if you make a good salary) - but, it is no worse than losing your house in a foreclosure and defaulting on the credit cards as well.

I think the tendency is for people who are underwater on their mortgages, i.e., they owe more than the house is worth, is simply to mail in the keys and walk away, credit score be damned. Although truly ethical people would choose to stay and pay down a loan commitment, regardless of the value of the property, a shocking number of people don't care about values and responsibility. If the value of the property goes up, great. If it goes down, it ain't my problem so I'm turning in the keys.


In the end, during the last part of the 90's the tech bubble caused havoc and many of the largest companies in the US imploded, causing massive layoffs and investors to lose trillions. The economy bounced back (ironically, mostly though housing) then and it will again.

The most recent run-up post 9/11 is unprecedented in U.S. history. It was clearly unsustainable. It really is time to pay the Piper.


So, in the end, pay cash for your stuff and make your mortgage and you will be fine.

But that's not the American way! We've been in a negative savings rate for the past couple of years...

[strandinthewind]

. . . There is the law, there are ethics, and then there is common decency. None of these are regulating the behaviors on Wall Street. How can you break the law when there aren't that many laws to break in the first place? Wall Street created this mess by borrowing money recklessly and lending money to anyone who can fog a mirror (which in turn caused the housing buble). They packaged these liar loans into securities that they deceptivelyresold as "AAA" rating at premium prices, paid themselves handsomely, and basically did nothing except pay themselves even more when it all came out in the wash. These securities ended up not being worth the paper they were printed on. But instead of taking responsibility for their own reckless, irresponsible behavior, they called on the U.S. government, i.e., the U.S. taxpayers to bail them out. And the bailout is now just beginning to the tune of hundreds of billions of dollars. We are left holding the bag while these amoral criminals are riding off into the sunset with their golden parachutes. I don't know how anyone can find this anything less than outrageous . . . .

All of what you say is illegal :shrug: Interestingly, so is taking a mortage you know you cannot pay :shrug:

Here is a cool article fromwww. nytimes.com:

February 12, 2008
Mortgage Crisis Spreads Past Subprime Loans
By VIKAS BAJAJ and LOUISE STORY
The credit crisis is no longer just a subprime mortgage problem.

As home prices fall and banks tighten lending standards, people with good, or prime, credit histories are falling behind on their payments for home loans, auto loans and credit cards at a quickening pace, according to industry data and economists.

The rise in prime delinquencies, while less severe than the one in the subprime market, nonetheless poses a threat to the battered housing market and weakening economy, which some specialists say is in a recession or headed for one.

Until recently, people with good credit, who tend to pay their bills on time and manage their finances well, were viewed as a bulwark against the economic strains posed by rising defaults among borrowers with blemished, or subprime, credit.

“This collapse in housing value is sucking in all borrowers,� said Mark Zandi, chief economist at Moody’s Economy.com.

Like subprime mortgages, many prime loans made in recent years allowed borrowers to pay less initially and face higher adjustable payments a few years later. As long as home prices were rising, these borrowers could refinance their loans or sell their properties to pay off their mortgages. But now, with prices falling and lenders clamping down, homeowners with solid credit are starting to come under the same financial stress as those with subprime credit.

“Subprime was a symptom of the problem,� said James F. Keegan, a bond portfolio manager at American Century Investments, a mutual fund company. “The problem was we had a debt or credit bubble.�

The bursting of that bubble has led to steep losses across the financial industry. American International Group said on Monday that auditors found it may have understated losses on complex financial instruments linked to mortgages and corporate loans.

The running turmoil is also stirring fears that some hedge funds may run into trouble. At the end of September, nearly 4 percent of prime mortgages were past due or in foreclosure, according to the Mortgage Bankers Association.

That was the highest rate since the group started tracking prime and subprime mortgages separately in 1998. The delinquency and foreclosure rate for all mortgages, 7.3 percent, is higher than at any time since the group started tracking that data in 1979, largely as a result of the surge in subprime lending during the last few years.

An example of the spreading credit crisis is seen in Don Doyle, a computer engineer at Lockheed Martin who makes a six-figure income and had a stellar credit score in 2004, when he refinanced his home in Northern California to take cash out to pay for his daughter’s college tuition.

Mr. Doyle, 52, is now worried that he will have to file for bankruptcy, because he cannot afford to make the higher variable payments on his mortgage, and he cannot sell his home for more than his $740,000 mortgage.

“The whole plan was to get out� before his rate reset, he said. “Now I am caught. I can’t sell my house. I’m having a hard time refinancing. I’ve avoided bankruptcy for months trying to pull this out of my savings.�

The default rate for prime mortgages is still far lower than for subprime loans, about 24 percent of which are delinquent or in foreclosure. Some economists note that slightly more than a third of American homeowners have paid off their mortgages completely. This group is generally more affluent and contributes more to consumer spending and the economy relative to its size.

Unlike subprime borrowers, who tend to have lower incomes and fewer assets, prime borrowers have greater means to restructure their debt if they lose jobs or encounter other financial challenges. The recent reductions in short term interest rates by the Federal Reserve should also help by reducing the reset rate for adjustable loans.

Still, economists say the rate cuts and the $168 billion fiscal stimulus package are unlikely to make a significant dent in the large debts weighing on many Americans, because banks have tightened lending standards and expected rebates from the government will not cover most house payments.

The problems are most acute in areas that experienced a big boom in housing — California, the Southwest, Florida and other coastal markets — and in the Midwest, which is suffering from job losses in the manufacturing sector.

And it is not just first-mortgage default rates that are rising. About 5.7 percent of home equity lines of credit were delinquent or in default at the end of last year, up from 4.5 percent a year earlier, according to Moody’s Economy.com and Equifax, the credit bureau.

About 7.1 percent of auto loans were in trouble, up from 6.1 percent. Personal bankruptcy filings, which fell significantly after a 2005 federal law made it harder to wipe out debts in bankruptcy, are starting to inch up.

On Monday, Fitch Ratings, the debt rating firm, reported that credit card companies wrote off 5.4 percent of their prime card balances in January, up from 4.3 percent a year ago. The so-called charge-off rate is still lower than before the 2005 law went into effect.

Banks are responding to the rise in delinquencies by capping home equity lines of credit in areas with falling real estate prices. A few credit card companies have also moved to reduce the credit limits of customers they deem more risky.

Bank of America, Citigroup, Countrywide Financial, JPMorgan Chase, Washington Mutual and Wells Fargo are expected to announce on Tuesday at the Treasury Department that they will offer both prime and subprime borrowers who are more than three months behind a chance to halt foreclosure proceedings for 30 days and work out new loan terms.

In a conference call with analysts in December, Kenneth Lewis, the chief executive of Bank of America, said more borrowers appear to be giving up on their homes as prices fall, noting a “change in social attitudes toward default.�

“You don’t mind making a $2,000 payment when the house is going up� in value, said Steve Walsh, a mortgage broker in Scottsdale, Arizona, who has seen several clients walk away from their homes because they couldn’t refinance or sell. “When it’s going down, it becomes a weight around your neck, it becomes an anchor.�

Home prices in the North Las Vegas neighborhood of Brenda Harris, a technology analyst at a casino company, have fallen 20 percent to 30 percent. The builder who sold her a new three-bedroom home on Pink Flamingos Place for about $392,000 in 2006 is now listing similar properties for $314,000. A larger house a block down from Ms. Harris was recently listed online for $310,000.

But Ms. Harris does not want to leave her home. She estimates that she has spent close to $40,000 on her property, about half for a down payment and much of the rest on a deck and landscaping.

“I’m not behind in my payments, but I’m trying to prevent getting behind,� Ms. Harris said. “I don’t want to ruin my credit.�

In addition to the declining value of her home, Ms. Harris, 53, will soon be hit with a sharply higher house payment. She has an option adjustable-rate mortgage, a loan that allows borrowers to pay less than the interest and principal due every month. The unpaid interest gets added to the principal balance. She is making the minimum monthly payments due on her loan, about $2,400.

But she knows she will not be able to pay the $3,400 needed to cover her interest and principal, which she will be required to pay once her loan balance reaches 115 percent of her starting balance. And under the terms of her loan, which was made by Countrywide Financial, she would have to pay a prepayment penalty of about $40,000 if she chose to refinance or sell her home before May 2009.

She said that she now wishes she had taken a traditional fixed-rate loan when she bought the home. At the time, she asked for a loan that could be refinanced after one year without penalty. She said her broker had told her a week before the closing that the penalty would extend until May 2009 and that she reluctantly agreed because she had already started moving.

A nonprofit community group, Acorn Housing, is trying to broker a modification of Ms. Harris’s loan. In a statement Friday, Countrywide said the company had been in touch with Ms. Harris and would work with her.

Credit counselors say many borrowers like Ms. Harris were cajoled or pushed into risky mortgages that they never had the ability to repay.

Others disregarded warnings about complex loans because they wanted to be a part of the housing boom, which like the technology stock bubble lured people in with seemingly instant and risk-free profits, said Mory Brenner, vice president of Financial Firebird Corporation, a company based in Pittsfield, Mass., that publishes consumer debt information and refers borrowers to credit counselors.

“I’d say, Let me tell you something, this is crazy,� Mr. Brenner said. “You cannot afford this house, even if nothing happens and rates stay as low as they are today. And the response would be: I don’t care.�

Lenders extended credit to people without verifying their incomes and allowing them to make little or no down payments.

But borrowers like Mr. Doyle, the engineer in Northern California, say they are victims of their circumstances — housing prices collapsed and lending standards tightened just as they needed to sell or refinance.

In refinancing their home in 2004, Mr. Doyle and his wife were doing what millions of other homeowners did in the last decade — tapping into the rising value of their homes for home improvements, paying off credit card debt, college tuition and for other spending.

The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000. Until their most recent loan they never had a problem making their payments. They invested much of the money in shares of companies that subsequently went bankrupt.

Still, Mr. Doyle does not regret refinancing in 2004. “My goal was clear: I wanted to help my daughter go through college,� he said. “It wasn’t like it was for us.�

[strandinthewind]

. . . combined with the emerging super-economies in Asia . . . .

Talk about an economy making and generating tons of rev. right now but headed for a mega meltdown :eek:

[HejiraNYC]

You do realize that the mere though that you are builing a cool new house with a pool is as repugnant to some (arguably the very poor) as the Wall Street excess are respugnant to you :shrug: So, in the end, I say as long as someone is not breaking the law, I do not begrudge them for making millions, or, in our case, a good salarythat affords some luxuries.

Well, I can see how that could be repugnant to some. But here is the deal... It was no accident or stroke of luck. I am not a trustfunder. I've been a saver all of my life. I have always lived beneath my means. I am a single income person who has had to compete financially in a two-income world. I have not engaged in legally or morally questionable practices to make money, nor have I earned my money at the detriment of others.

I do not begrudge anyone their fortunes as long as they have worked hard and honestly. If Wall Streeters were indeed creating real wealth and revenue. Fine. But in the end, it was all bull*****. A shame. A crock. They made up their own rules, got caught, and now they are expecting to be bailed out. That I truly find "repugnant."

[strandinthewind]

I . . . On an inflation-adjusted basis, it will be decades, if ever, before prices reach this level again . . . .

In 20 years, most mortgages in effect now will be paid off or will have balances at 90% or so of the original loan value. And, if you can, always add $100 or so to each mortgage payment. This will save you thousands of dollars depending on the size of the loan, etc.

[strandinthewind]

Well, I can see how that could be repugnant to some. But here is the deal... It was no accident or stroke of luck. I am not a trustfunder. I've been a saver all of my life. I have always lived beneath my means. I am a single income person who has had to compete financially in a two-income world. I have not engaged in legally or morally questionable practices to make money, nor have I earned my money at the detriment of others.

I do not begrudge anyone their fortunes as long as they have worked hard and honestly. If Wall Streeters were indeed creating real wealth and revenue. Fine. But in the end, it was all bull*****. A shame. A crock. They made up their own rules, got caught, and now they are expecting to be bailed out. That I truly find "repugnant."


Then we agree in the context of the subprime mess being a sham :cool: I do also, however, fault consumers who made loans knowing they could never pay them back. They are just as bad as the lenders in my book.

Also - I think your actions last weekend in the meat packing district cast a doubtful light on your statement "I have not engaged in legally or morally questionable practices to make money" :wavey:

[HejiraNYC]

Then we agree in the context of the subprime mess being a sham :cool: I do also, however, fault consumers who made loans knowing they could never pay them back. They are just as bad as the lenders in my book.

Also - I think your actions last weekend in the meat packing district cast a doubtful light on your statement "I have not engaged in legally or morally questionable practices to make money" :wavey:

Ah, I thought that was you getting mummified on the pool table. :lol: :eek: :eek:

FWIW, there is nothing in the Meatpacking District these days except high-end boutiques, high-end hotels, high-end restaurants and yuppie nightspots. The dream of Carrie Bradshaw and her ascerbic, cosmopolitan BFF's is alive and well.

[HejiraNYC]

I do also, however, fault consumers who made loans knowing they could never pay them back. They are just as bad as the lenders in my book.



True... to a certain extent. How fast would you drive if there were no speed limits? How much would you borrow if there were no lending limits? How much would you repay if you were in over your head and there really weren't any major consequences if you defaulted? It's human nature to game the system... you give people too much rope and they will hang themselves. The fact is that the banks fudged the numbers, exploited every loophole and did whatever it took to lend money and make "revenue."

[strandinthewind]

Ah, I thought that was you getting mummified on the pool table. :lol: :eek: :eek:

I beg your pardon, THAT incident was in the East Village and it was after midnight!

FWIW, there is nothing in the Meatpacking District these days except high-end boutiques, high-end hotels, high-end restaurants and yuppie nightspots. The dream of Carrie Bradshaw and her ascerbic, cosmopolitan BFF's is alive and well.

Ugh - where are all the tranny hookers looking to make a 5 spot.

[strandinthewind]

True... to a certain extent. How fast would you drive if there were no speed limits? How much would you borrow if there were no lending limits? How much would you repay if you were in over your head and there really weren't any major consequences if you defaulted? It's human nature to game the system... you give people too much rope and they will hang themselves. The fact is that the banks fudged the numbers, exploited every loophole and did whatever it took to lend money and make "revenue."

To a degree - the trick was they (the banks and everyone) did not see the end coming. No one of any relevance uttered a peep when times were good. And - many bought houses thinking they wqould never have to worry about the payment rising because they planned all along to sell them in three years for a profit.

But, each person must take account for themselves - a notion not accepted by many.

[HejiraNYC]

I beg your pardon, THAT incident was in the East Village and it was after midnight!



Ugh - where are all the tranny hookers looking to make a 5 spot.

Why do you ask? Job hunting much? :wavey:

Christopher Street, despite the efforts of the community and police, remains about as skanky as ever, although not as much in the winter. But when the weather warms up, LaShonda and her cronies from East Orange will be back in force. No need to worry, there is job security in your line of work. :wavey:

[David]

I have, however, lost a bundle in my 401(k) and such. But, history demonstrates that a diversified portfolio, over the long run, is fairly safe - and I am not retiring anytime soon, much to my regret.My 401 hasn't done too poorly, considering ... although because I keep a huge chunk of it in high-growth stock funds, I've seen some ... ahem ... lower numbers the past few months. But I'm not terribly worried, & I'm certainly not going to reapportion to lower risk at this point. The trick is to have your money in the riskier funds BEFORE the market turns up again (which it will inevitably do). The same thing happened back in 2001-2002. Some of the greatest gains I made then (rivalling the early 1990s) were due to leaving the money in my favorite growth funds.

The cost of gas at the pump is high, but I don't have to drive much because I work at home. Groceries are higher & higher, which is very apparent at the checkout.

[strandinthewind]

Why do you ask? Job hunting much? :wavey:

Christopher Street, despite the efforts of the community and police, remains about as skanky as ever, although not as much in the winter. But when the weather warms up, LaShonda and her cronies from East Orange will be back in force. No need to worry, there is job security in your line of work. :wavey:

Last I checked - you were crowding my corner which is going to get you cut in the future AND you were in a second hand tube top, which, frankly made you look like a boiled sausage - - OKKAAAAAYYYY!

[strandinthewind]

My 401 hasn't done too poorly, considering ... although because I keep a huge chunk of it in high-growth stock funds, I've seen some ... ahem ... lower numbers the past few months. But I'm not terribly worried, & I'm certainly not going to reapportion to lower risk at this point. The trick is to have your money in the riskier funds BEFORE the market turns up again (which it will inevitably do). The same thing happened back in 2001-2002. Some of the greatest gains I made then (rivalling the early 1990s) were due to leaving the money in my favorite growth funds.


Bingo - though getting out at the right time is key as well. I remember losing something like 23% in the late 90's OUCH!

The cost of gas at the pump is high, but I don't have to drive much because I work at home. Groceries are higher & higher, which is very apparent at the checkout.

Fortunately, I have no car and when I use Zip Car (www.zipcar.com) they pay the gas. Also, I am on a diet - which helps as well :laugh:

[HejiraNYC]

Last I checked - you were crowding my corner which is going to get you cut in the future AND you were in a second hand tube top, which, frankly made you look like a boiled sausage - - OKKAAAAAYYYY!

At least I could fit into my tube top. I'm not the one throwing a hissy-fit at Conway because Big Mama didn't make fishnets in my size. Mmmmkay, Viola Muffintop? :wavey:

[strandinthewind]

At least I could fit into my tube top . . . .

Shoehorns aside - when they finally got you out it , they could have ended the Iraq war with the force of the "plumage" that popped out - like a the inside of a plane being sucked out of a small hole in a window :wavey:

[SuzeQuze]

All of what you say is illegal :shrug: Interestingly, so is taking a mortage you know you cannot pay :shrug:

...

Most people aren't too bright and they'll take a mortgage if someone gives it to them without realizing they can't pay it. Not that they aren't still responsible, they are. The banks are moreso though IMO since they are the experts and know with certainty what can be paid and what cannot. Also, why would they want to give a mortgage someone cannot pay? That's financial suicide.

[petep9000]

Schadenfreude is my middle name.

I thought that I was the only one who actually had that as a middle name. I know my mother says it's 'Vincent'...

But she's wrong.:nod:

[strandinthewind]

. . . Also, why would they want to give a mortgage someone cannot pay? That's financial suicide.

Look at the appreciation of property values over the last ten, and IMO really almost 15 years. That is the answer. They (the banks and IMO the buyers) were specualting on the rise of property values. Again, who cares if the mortgage goes bad if you (the bank or pwner) can always sell the house and walk away with money as many many people did.

Again, there are many people who lost their jobs, got sick, etc. and could not pay their mortgage. I am not talking about those people.

[DavidMn]

Well, as far as finances go mine are in a heap of S**T, but that's through my own bad decsions so I have no one but myself to blame for that. I work in a grocery store as a cashier so I talk to people every day about how much higher prices are, especially on eggs. I would say what I've seen go up more than anything are eggs and flour. Flour makes sense because wheat prices are going up exponentially it seems. I saw a thing on CNn about how pizza parlors are really struggling because the price of their flour for dough is going up faster than they ever thought it would and theyre afraid to pass on too much to customers.

[gldstwmn]

How is everyone weathering this economic *****storm? Business as usual? Cutting back? Better than ever? On the edge of financial ruin? A Ledgie wants to know!

I'm a mortgage broker, so I would say yes to all of the above including better than ever (mentally and physically). :lol:

[HejiraNYC]

Well, as far as finances go mine are in a heap of S**T, but that's through my own bad decsions so I have no one but myself to blame for that. I work in a grocery store as a cashier so I talk to people every day about how much higher prices are, especially on eggs. I would say what I've seen go up more than anything are eggs and flour. Flour makes sense because wheat prices are going up exponentially it seems. I saw a thing on CNn about how pizza parlors are really struggling because the price of their flour for dough is going up faster than they ever thought it would and theyre afraid to pass on too much to customers.

I saw a segment on CNN about the burgeoning corn-based ethanol industry. Although the proponents insist that it is the green alternative fuel source of the future, as it turns out, the processing/refinement of ethanol creates even more carbon than burning fossil fuels (since the ethanol plants burn tons and tons of coal). Additionally, the return on energy investment is pathetically small- barely dougle-digit percentages. But most significantly, the corn used to create ethanol is cutting into the supply being used for food, hence corn-based products are way up. Ask any Mexican about the price of tortillas!

[HejiraNYC]

Most people aren't too bright and they'll take a mortgage if someone gives it to them without realizing they can't pay it. Not that they aren't still responsible, they are. The banks are moreso though IMO since they are the experts and know with certainty what can be paid and what cannot. Also, why would they want to give a mortgage someone cannot pay? That's financial suicide.

Au contraire. On Wall Street, that's considered "revenue." Their balance sheets looked so good because they accounted for the full value of the (suicide) loans they made based on the assumption that they were going to be paid back in full. The banks didn't care whether or not the borrowers were actually going to pay back the loan; by the time any borrower could default, the loan would have already been collaterized into a "AAA" bond and resold to some greater fool at a hedge fund. The banks merely collected their huge commissions and moved on.

[petep9000]

I saw a segment on CNN about the burgeoning corn-based ethanol industry. Although the proponents insist that it is the green alternative fuel source of the future, as it turns out, the processing/refinement of ethanol creates even more carbon than burning fossil fuels (since the ethanol plants burn tons and tons of coal). Additionally, the return on energy investment is pathetically small- barely dougle-digit percentages. But most significantly, the corn used to create ethanol is cutting into the supply being used for food, hence corn-based products are way up. Ask any Mexican about the price of tortillas!

You may be right about this, though I thought that a book I read a few months back called The Omnivore's Dilemma actually said that the corn used to make stuff like ethanol, animal feeds, food additives and chemicals was a tasteless, starchy, not-particularly-delicious variety. I might be wrong, I'd need to check out that corn chapter again. We dont' even know the half of how here in the US, corn now reigns supreme. This is a contributing reason why we have obesity in such a way now here. Manufactured and packaged foods are loaded with high-fructose corn syrup and corn solids and corn, corn corn. Which of course, becomes sugar, sugar, sugar once we eat it.
The farmers in the heartlands are heavily subsidized to raise corn, or soy. Industrial plants for our post-industrial age.

[strandinthewind]

Au contraire. On Wall Street, that's considered "revenue." Their balance sheets looked so good because they accounted for the full value of the (suicide) loans they made based on the assumption that they were going to be paid back in full. The banks didn't care whether or not the borrowers were actually going to pay back the loan; by the time any borrower could default, the loan would have already been collaterized into a "AAA" bond and resold to some greater fool at a hedge fund. The banks merely collected their huge commissions and moved on.

I believe GAAP counts that as an asset. Rev. is when the payments are actually paid. Note - assets are based/valued on projected rev. Finally, the vast majority of loans are being paid back. I get that the numbers for foreclosures ae high and that is an awful thing, but over 90% are being paid :shrug:

Here is what I thought was a good explantion of AAA ratings

http://seekingalpha.com/article/67002-abx-index-some-aaa-subprime-mortgage-bonds-are-less-equal-than-others

Here is another

http://www.bankstocks.com/article.asp?type=1&id=9881669

Finally the bond market has been the cause of most bad times.

[strandinthewind]

You may be right about this, though I thought that a book I read a few months back called The Omnivore's Dilemma actually said that the corn used to make stuff like ethanol, animal feeds, food additives and chemicals was a tasteless, starchy, not-particularly-delicious variety. I might be wrong, I'd need to check out that corn chapter again. We dont' even know the half of how here in the US, corn now reigns supreme. This is a contributing reason why we have obesity in such a way now here. Manufactured and packaged foods are loaded with high-fructose corn syrup and corn solids and corn, corn corn. Which of course, becomes sugar, sugar, sugar once we eat it.
The farmers in the heartlands are heavily subsidized to raise corn, or soy. Industrial plants for our post-industrial age.

The Omnivore's Dilemma - I love that book and, mind you, I LOVE meat :nod:

Also, on HFCS:

http://www.hfcsfacts.com/?gclid=CMyj4vrtlJICFQ4ZHgod11j56g

http://www.westonaprice.org/motherlinda/cornsyrup.html

http://www.nytimes.com/2006/07/02/business/yourmoney/02syrup.html

I suggest avoiding it at all possible costs if you can. Of course, that means no ketchup unless you bring your own because most places serve Heinz, no soda pop, etc. So, most people are not going to do this.

[HejiraNYC]

Of course, that means no ketchup unless you bring your own because most places serve Heinz, no soda pop, etc. So, most people are not going to do this.

I'm sure you can squeeze in a few packets of your own in your purse- amongst the packets of KY, condoms, chewing gum and lip gloss. :wavey:

[strandinthewind]

I'm sure you can squeeze in a few packets of your own in your purse- amongst the packets of KY, condoms, chewing gum and lip gloss. :wavey:

Listen it is hard to find a clutch that can accomodate my needs.

Actually, I have been known to carry the individual Crystal Light lemonades out with me. Bars rarely have diet mixers.

[petep9000]

[I]
Also, on HFCS:

http://www.hfcsfacts.com/?gclid=CMyj4vrtlJICFQ4ZHgod11j56g

http://www.westonaprice.org/motherlinda/cornsyrup.html

http://www.nytimes.com/2006/07/02/business/yourmoney/02syrup.html


I breezed quick through that NY Times article. True, HFCS is nutritionally probably not any worse for you than cane sugar was. I think it is just the sheer volume of it now that is what is concerning. It's in so many products now, and of course, we have SO many more packaged products that we didn't have 30 years ago or even 10 years ago. A rush-rush culture, eating in a hurry etc and so we load up on quick things and these are loaded with corn stuff. And, the amount of physical activity is reduced too for many folks. Gee, I remember when I had to get off the sofa and walk to the TV to turn the dial. Puff puff wheeze. Whoo, that was a workout. :lol:

Then again, after reading Marion Nestle's What To Eat I'm not sure I trust any researchers. She's always finding their secret connections to the big industrial food corporations.

[strandinthewind]

. . . True, HFCS is nutritionally probably not any worse for you than cane sugar was . . . .

LOL - My kin had huge sugar refineries in South Louisiana, which are still there to this day :eek:

In the end, cane sugar is not that bad for you - neither is HFCS. It is the quatities of both that we consume that make them so bad. And, it is so easy not to do so. Buy Stevia instead of sugar, equal, slenda, etc. Also, try green tea with Stevia - I'd say drink unsweetened tea, but that is just not Southern :cool:

As for what not to eat - the closer you can get to home grown veggies the better. Yes, almost anything will have the fertilizer and insecticides on and in them, but there is nothing you can do about that short of growing them yourself.

[petep9000]

In the end, cane sugar is not that bad for you - neither is HFCS. It is the quatities of both that we consume that make them so bad. And, it is so easy not to do so. Buy Stevia instead of sugar, equal, slenda, etc. Also, try green tea with Stevia - I'd say drink unsweetened tea, but that is just not Southern :cool:


It can be done! Break the sugar/HFCS habit! I've been drinking coffee without sugar forever, years and years. It took about 2 days to get used to, same with hot tea. I need a bit of milk in both though.
Herbal tea, I just do 'em black. I like the natural flavors to come through and to soothe me...

[HejiraNYC]

It can be done! Break the sugar/HFCS habit! I've been drinking coffee without sugar forever, years and years. It took about 2 days to get used to, same with hot tea. I need a bit of milk in both though.
Herbal tea, I just do 'em black. I like the natural flavors to come through and to soothe me...

To quote the little girl in the movie "Airplane," "I take my coffee black... like my men."

[petep9000]

OMG. I was going to put that in my post too! I was going to say that right after I mentioned taking my herbal tea black, but then I said....."no, maybe not". ya never know who might get offended.

I have a terrific 'Stevie of Death' too, but I'm terrified of posting it. It really might be pushing the limits.

[David]

OMG. I was going to put that in my post too! I was going to say that right after I mentioned taking my herbal tea black, but then I said....."no, maybe not". ya never know who might get offended.

I have a terrific 'Stevie of Death' too, but I'm terrified of posting it. It really might be pushing the limits.Remember the round-robin party tune the Oliviers & their guests used to sing during weekends at Notley Abbey?

"A long, strong ***** pudding up my sister's arse . . ."

(I hope I don't get banned for this.)

[HejiraNYC]

OMG. I was going to put that in my post too! I was going to say that right after I mentioned taking my herbal tea black, but then I said....."no, maybe not". ya never know who might get offended.

I have a terrific 'Stevie of Death' too, but I'm terrified of posting it. It really might be pushing the limits.

Oh, come on, how bad could it possibly be? Post it!

I remember the first time I saw Airplane I was probably 10 years old, and I was literally crying after that line. :nod:

[strandinthewind]

Oh, come on, how bad could it possibly be? Post it!

I remember the first time I saw Airplane I was probably 10 years old, and I was literally crying after that line. :nod:

Well, first it's all Mexican's eat tortillas and now it's little white girls and black men humor. What's next - beastiality? Not to mention the whole insult to hookers. I am highly offended!

[strandinthewind]

. . . I have a terrific 'Stevie of Death' too, but I'm terrified of posting it. It really might be pushing the limits.

I posted this one, which I think nobody got, but it is the shodaow of a Hiroshima victim that is permanently infused into the pavement :eek:

http://img.photobucket.com/albums/v602/strandinthewind/death2-1.jpg

not to mention this one:

http://img.photobucket.com/albums/v602/strandinthewind/World20Trade20Center.jpg

So, I say go ahead and post.

[petep9000]

ok. Here goes.

http://i219.photobucket.com/albums/cc297/jcastr01/ss.jpg

[strandinthewind]

ok. Here goes.

http://i219.photobucket.com/albums/cc297/jcastr01/ss.jpg

Homo - erotic or at least homo suggestive Stevie of Death in a death camp - nice :eek:

Actually, it is funny:

I wish knew how to put the Stevie of Death in this Nizi mocking as well:

<object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/KafHGjNjSCM&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/KafHGjNjSCM&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>

[JWS]

Oil is at record highs, gold is at record highs, the U.S. dollar is at record lows against the Euro, inflation is out of control yet incomes are flat, unemployment is spiking upward, housing values are tanking, the U.S. banking system is on the verge of collapse, house foreclosures are way up, the national debt is nearing 9 trillion dollars, jobs are being exported, there is an unending war costing U.S. taxpayers $12,000,000,000 per month, etc.



The George Bush legacy.:distress:

[strandinthewind]

^^^

Sadly, yes, that is his legacy. Everything that man has ever touched has turned to stone. And, what kills me is some of the ideas were not half bad, but the execution of them and the follow up destroyed any good that initially or could have come from them.

On another point, here is an interesting article on the NYC economy from www.nytimes.com

March 18, 2008
Troubled Outlook for New York City Economy Turns a Lot Grimmer
By PATRICK McGEEHAN
The outlook for New York City’s economy and its main engine, the financial services industry, had already taken a bleak turn before the sudden failure of Bear Stearns, the fifth-largest firm on Wall Street.

Investment banks and brokerage firms started cutting their payrolls last fall as the weakening market for mortgages translated into huge losses. Employment in the city’s securities industry dropped by about 8,000 jobs from August to January, a decline of about 4 percent.

Now, with the impending loss of several thousand high-paying jobs at Bear Stearns, city officials and economists are bracing for the downturn to steepen. How deep it will be and how long it will last are open questions.

“Who knows?� said William C. Thompson Jr., the city’s comptroller. “We had been preparing for tougher times. This means things are going to get a little tougher. We just don’t know how many jobs are going to be lost because of this.�

Bear Stearns had about 14,000 employees, and as many as 8,000 of them worked in the city. Last year, those workers collected more than $3.4 billion in pay and benefits, or an average of about $242,000 per employee.

Bear Stearns was one of the 25 largest employers in the city and accounted for about one of every 25 jobs in the city’s securities industry. It was not the first major Wall Street firm to collapse. Drexel Burnham Lambert and Kidder Peabody fell more than a decade ago. But Bear Stearns was a bigger component of a more consolidated industry.

On Monday, officials of JPMorgan Chase, which agreed to buy Bear Stearns and stave off a bankruptcy, declined to estimate how many of the jobs would be saved. But representatives of the firm did not dispute reports that the sale would probably result in the elimination of most of them.

Already, the rescue has implications for the redevelopment of Lower Manhattan. JPMorgan announced last year that it would build a headquarters for its investment-banking operations at the site of the former Deutsche Bank building, where there was a deadly fire last year.

But JPMorgan officials have now decided to move that unit instead to Bear Stearns’s glass tower in Midtown Manhattan. Government officials who were briefed on the revised plan said on Monday that they expected JPMorgan to honor its commitment to the World Trade Center area by moving other employees there.

The comptroller’s office estimates that the city collects $20 million in taxes for every $1 billion paid out in cash bonuses. In 2007, year-end bonuses for city residents totaled about $30 billion, producing about $600 million in income tax revenue for the city.

A significant drop in profits on Wall Street has a direct and possibly painful effect on the city and state budgets.

“New York City and state are over-dependent on the financial industry for tax revenues,� said Kathyrn S. Wylde, president of the Partnership for New York City, a business-advocacy group. She estimated that Wall Street accounts for one-fifth of the business taxes collected in New York.

“Even a mild downturn on Wall Street causes tremendous problems, and this is much more than a mild downturn,� Ms. Wylde said. “This is potentially a sustained period of significant losses. That translates into the need to significantly revise budgets.�

Even generally optimistic financial executives like Alan H. Fishman, the chairman of Meridian Capital, a mortgage broker, said they were unsure how long it would take the city to absorb the latest blow.

“Nobody’s ever seen something like this,� Mr. Fishman said, referring to the fallout from the mortgage mess. “If you’d asked everybody how serious this was two weeks ago, they would have said, it’s serious but it will pass. Now they would say it’s very serious.�

Two weeks ago, before Bear Stearns’s solvency was in doubt, the city’s Independent Budget Office forecast that Wall Street would cut an additional 20,200 jobs in the city by the end of 2009. It also projected a decline in business taxes collected by the city from $6 billion last year to $5.6 billion this year to $5 billion next year.

Mr. Thompson, the comptroller, said that projections of overall city revenue being flat in the first half of this year may turn out to have been too rosy.

“No matter what, looking forward, you’re not going to have a Bear Stearns to be able to grow,� he said. “We’ll have one less major firm, and that is an additional concern on top of everything else.�

[SuzeQuze]

Wow, let's hope the carnage ends with Bear Stearns. Another foreclosed condo just showed up in my property search from my realtor. And really cheap. :distress:

[HejiraNYC]

See, it's shizz like this that makes me batshizz about the unmitigated corporate greed at BS:

http://www.observer.com/2008/bear-stearns-cayne-takes-plaza-then-bridge

Bear Stearns' Cayne Takes The Plaza, Then Bridge
by Tom Acitelli | March 17, 2008 | Tags: Real Estatebear stearnsJames CayneThe Plaza

Bear Stearns chairman James Cayne was in Detroit at the start of the weekend that saw the tanking of his venerable investment bank. Why? Mr. Cayne was competing in the North American Bridge Championship, according to reports.

Also last week, as the perfect storm gathered, Mr. Cayne closed on a $25 million condo at the revamped Plaza.

********
If there is any justice in the world, the SEC or the Fed or somebody should be going after the personal assets of these criminals. Government Repo Sale at The Plaza! Besides, who needs The Plaza when there is a luxury suite waiting for him at Rykers Island.

[HejiraNYC]

The George Bush legacy.:distress:

It's actually the legacy of the 50+ million ignorant nutjob Americans out there who voted for GWB. Surely it's because everyone knows that the gays and the pro-choicers are destroying the fabric of society, whereas, a former oilman and a former executive at Halliburton would certainly look out for our best interests and would make us safer. Oh, and surely bailing out their buddies on Wall Street rather than rebuilding New Orleans is surely the moral and "Christian" thing to do. :rolleyes:

For some reason I just cannot muster any sympathy when I read about Joe Six-pack in Red State America, with a confederate flag sticker on the bumper of his Hummer H2 (purchased with a home equity line of credit), crying about $3/gallon gasoline. America: you reap what you sow.

[strandinthewind]

See, it's shizz like this that makes me batshizz about the unmitigated corporate greed at BS:

http://www.observer.com/2008/bear-stearns-cayne-takes-plaza-then-bridge

Bear Stearns' Cayne Takes The Plaza, Then Bridge
by Tom Acitelli | March 17, 2008 | Tags: Real Estatebear stearnsJames CayneThe Plaza

Bear Stearns chairman James Cayne was in Detroit at the start of the weekend that saw the tanking of his venerable investment bank. Why? Mr. Cayne was competing in the North American Bridge Championship, according to reports.

Also last week, as the perfect storm gathered, Mr. Cayne closed on a $25 million condo at the revamped Plaza.

********
If there is any justice in the world, the SEC or the Fed or somebody should be going after the personal assets of these criminals. Government Repo Sale at The Plaza! Besides, who needs The Plaza when there is a luxury suite waiting for him at Rykers Island.

Justice requires implementing the law. Can you prove he did anything illegal? If so, then he should be prosecuted. But, buying a condo at the new Plaza is not against the law and neither is taking a vacation to be in bridge tournament, though his timing sucks.

Again, it seems you are equating a tanking company to illegality. There may be illegal acts here, but they have yet to be proven.

I know it sounds harsh, but you building a fancy house with lanscaping and a swimming pool in a time when thousands are losing their houses and jobs also likely would appear to many less fortunates as a bad thing and that you certainly must have done something wrong to get that. I know you did not, but the appearance would be there for them to assume that. So, I do not begrudge anyone for making enough money to build a pool or buy a $25 million condo at The Plaza. Again, if they broke the law, then justice should prevail.

I readily agree that in many cases illegal acts are performed. But, as of now, there is no evidence of that. Should the SEC or some other entitity be investigating - yes, they should. And, they often get the bad guys as they did in Enron. And, they take their assets, the ones that have not been legally removed from their possession, which actually is very hard to do believe it or not.

By the way, this guy likely lost about a billion dollars or at least several hundred million dollars yesterday. So, it is not like he is without harm as well :shrug: Of course, many are loathe to admit that becuase he already is a millionaire and people just cannot help but hate them and think that anything over some arbitrary number of wealth is too much.

[strandinthewind]

. . . Oh, and surely bailing out their buddies on Wall Street rather than rebuilding New Orleans is surely the moral and "Christian" thing to do. :rolleyes: . . . .

How exactly was Bear Stearns bailed out? The company was worth tens of billions of dollars and got sold for $262 million. Their office tower on Madison was worth $1.3 billion, not to mention the other viable assets of the firm. So, Bear Stearns was most certainly not bailed out. Rather the sale to JP Morgan was a fire sale that stopped a run on a bank. JP Morgan will make billions off of this. Hopefully, they structured it so that the $30 billion or so in Fed backing for the mtg. securities will have to be repaid is they turn out to be good, which is unlikely.

But, your point is interesting and, quite frankly, very conservative. You are endorsing a free maket with no govt. interderence, which is the best method or correcting the market, though it also is the harshest. It is the harshest because it provides no stability to the markets and corrections turn into panics. So, some govt. interference is required IMO.

Interestingly, one of the primary reasons NOLA is not rebuilt is the people there are arguing about what to do. There are big plans to redo many neighborhoods, but the homeowners, city, state, and Feds cannot agree on issues of property rights. I will say this though - much progress has happened, though much remains to be done.

[strandinthewind]

A good sign?

Decline in Housing Starts Is Less Than Forecast

By REUTERS

WASHINGTON (Reuters) — United States home building projects started in February fell by 0.6 percent to a higher-than-expected annual rate while building permit activity, a sign of future construction plans, dropped off 7.8 percent, a government report on Tuesday showed.

The Commerce Department said housing starts set an annual pace of 1.065 million units in February, higher than the 990,000 expected by economists. The January starts figure was revised upward to 1.071 million from the 1.012 million originally reported.

Prices for United States Treasury bonds were down after the stronger-than-expected data, while stock futures stayed high.

Still, some analysts were skeptical that there is long-lasting improvement in the beleaguered housing market.

“I wouldn’t put anything in that little bounce,� said Josh Stiles, Bond Strategist at IDEAGlobal in New York. “The housing industry is in a recession.�

Building permits fell 7.8 percent to an annual rate of 978,000, the slowest pace since a 974,000 rate set in September 1991. Economists polled by Reuters had forecast February permits at 1.020 units after the 1.061 million rate of January.

Compared to a year ago, housing starts were down 28.4 percent. But for single-family homes, starts were off 40.5 percent from a year ago — the largest year-over-year drop since January 1991, when they fell by 45.1 percent.

www.nytimes.com

[strandinthewind]

Another good if not slightly great sign:

Lehman, Goldman Profits Fall, but Beat Estimates

March 18, 2008, 8:28 am

Investment BankingIndustries Financial ServicesTwo of Wall Street’s top investment banks reported earnings well below the heights of last year, but still beating analysts’ expectations at a time when the financial sector is on edge following the collapse of Bear Stearns.

Lehman Brothers, whose stock took a beating on Monday following the announcement of the Bear Stearns sale, reported $489 million in profit for its first quarter. The earnings, which amount to 89 cents a share on $3.5 billion in revenue, are down 57 percent from the comparable period last year. Analysts surveyed by Thomson Financial expected profit of 72 cents a share.

Meanwhile, Goldman Sachs reported $1.51 billion in profit for its first quarter of 2008. Goldman’s earnings of $3.23 per share on $8.34 billion in revenue is less than half of the $6.67 per share it earned in 2007. Analysts had expected $2.58 a share on $7.3 billion, according to Thomson.

Lehman and Goldman reported yet more write-downs, which have become almost de rigueur as buyers of debt have almost completely vanished. Lehman disclosed a $1.8 billion net write-down tied to residential and commercial mortgages, while Goldman reported about $2 billion in charges related to mortgages and other debt, including loans meant to finance leveraged buyouts.

Still, both firms have reported fewer write-downs compared to their peers as the two firms credited strong risk management practices to protect against the mortgage market collapse. Last year, Goldman said it had bet heavily against risky home loans, avoiding the charges taken by Morgan Stanley, Merrill Lynch and Bear Stearns that led to huge losses.

The results follow a big selloff in investment banking shares on Monday, especially those of Lehman, sparked by the rapid demise of Bear Stearns and its fire sale to JPMorgan Chase. Lehman’s stock fell 19 percent Monday, and shares of other financial firms declined as well.

For the chief executives of both firms, the only way to describe the markets today was “challenging,� even as they sounded hopeful notes about ways to make money in a difficult environment.�Although market conditions present many challenges at the moment, they also offer considerable opportunities,� Goldman’s chief executive, Lloyd C. Blankfein, said in a statement.

“In what remains a challenging operating environment, our results reflect the value of our continued commitment to building a diversified platform and our focus on managing risk and maintaining a strong capital and liquidity position,� Lehman’s C.E.O., Richard S. Fuld, said in a statement.

Though some analysts said there were similarities between Bear and Lehman, others were quick to draw a line between the two firms. “Lehman is not Bear,� Deutsche Bank analyst Mike Mayo said in a report Monday.

The firm stressed that it had plenty of cash on hand as it seeks to avoid the sort of credit squeeze that decimated Bear Stearns. In its release Tuesday, Lehman said that it had a liquidity pool of $34 billion, with its parent company, Lehman Brothers Holdings, possessing $64 billion in other unencumbered assets and its regulated entitites holding unencumbered assets of $99 billion.

Lehman said its book value was $39.45 per common share.

Mr. Fuld previously told The New York Times that his firm has a comfortable level of liquidity. “We learned a ton in ’98,� Mr. Fuld told The Times, referring to investors’ panic after Russia defaulted on its debt. “We have a much different liquidity profile today than we did then.�

Lehman’s only decline in revenue came from its trading operations, which fell 52 percent from last year to $1.7 billion. Its debt trading unit’s revenue plunged 88 percent on continued troubles in mortgages and leveraged loans, while its equities trading operations rose 6 percent in large part because of its hedge fund servicing business.

Its investment banking revenue rose slightly to $867 million, as double-digit gains in mergers advisory and stock underwriting were mostly offset by a drop in debt underwriting. Investment management revenues rose 39 percent.

Lehman’s return on common stockholders’ equity, a measure of profitability, fell about 16 percent to 8.6 percent for the quarter. Its book value per common share was $39.45.

Goldman saw a wider decline in revenues across its businesses. Its biggest revenue generator, its trading and principal investment operations, saw a 46 percent drop in revenue to $5.12 billion thanks to the write-downs and some money-losing investments.

Its investment banking operations reported a 32 percent drop in revenue to $1.12 billion as all elements of that business — deal advisory and underwriting — fell amid the market turmoil.

But revenues from asset management and securities services (which includes clearing operations) rose 28 percent on higher assets under management and customer balances.

Goldman said that it remained well-capitalized, with $42.63 billion in shareholder equity and $179.48 billion in unsecured long-term borrowings. The firm said its book value per common share was $92.44 and its tangible book value per common share was $80.28.

www.nytimes.com

[HejiraNYC]

Justice requires implementing the law. Can you prove he did anything illegal? If so, then he should be prosecuted. But, buying a condo at the new Plaza is not against the law and neither is taking a vacation to be in bridge tournament, though his timing sucks.

I don't know the particular details of each transaction... but from my 20,000ft perch, it appears that they exploited loopholes and defrauded investors with voo doo accounting methods and reckless, unethical lending/trading practices. While it may have been legit from a legal perspective, the intent appears to have been fraudulent. But I don't think anyone will really know for certain until it all comes out in the wash...


Again, it seems you are equating a tanking company to illegality. There may be illegal acts here, but they have yet to be proven.

True. However, my problem here is from a moral/ethical point of view. It appears that BS, via their smoke and mirrors, managed to pump and dump gazillions of worthless shares in their favor, took all the profits for themselves, and left the bagholders, er, shareholders with nothing in the end. Meanwhile, they are going to bridge tournaments and buying 25 million-dollar condos at the Plaza while their customers are going to the poorhouse. I suppose it may be technically legal for these guys to pay themselves whatever they want. But at the end of the day, they need to be able to justify their lofty compensation packages. Why do you suppose there was that hearing in Congress last week with the CEO's of Citi, Countrywide, etc.? Something seriously stinks in Denmark, and some members of Congress are finally taking notice.


I know it sounds harsh, but you building a fancy house with lanscaping and a swimming pool in a time when thousands are losing their houses and jobs also likely would appear to many less fortunates as a bad thing and that you certainly must have done something wrong to get that. I know you did not, but the appearance would be there for them to assume that. So, I do not begrudge anyone for making enough money to build a pool or buy a $25 million condo at The Plaza. Again, if they broke the law, then justice should prevail.

For one thing, none of it is "fancy." Secondly, I am not being scrutinized because of a scandal involving a major corporation and billions of dollars going tits-up. Apples and oranges, mon frere! Everything I do is off the radar because there is nothing in the least bit shady about what I do.


I readily agree that in many cases illegal acts are performed. But, as of now, there is no evidence of that. Should the SEC or some other entitity be investigating - yes, they should. And, they often get the bad guys as they did in Enron. And, they take their assets, the ones that have not been legally removed from their possession, which actually is very hard to do believe it or not.

Again, right now the appearance is that these guys are guilty until proven innocent. And they're not the only ones with blood on their hands. All of the major Wall Street firms exploited the system to varying degrees, and the great unwinding is just beginning.


By the way, this guy likely lost about a billion dollars or at least several hundred million dollars yesterday. So, it is not like he is without harm as well :shrug: Of course, many are loathe to admit that becuase he already is a millionaire and people just cannot help but hate them and think that anything over some arbitrary number of wealth is too much.

Awww... let me call a wAAAAAAmbulance for them. :rolleyes:

[strandinthewind]

. . . but from my 20,000ft perch . . .

That is higher than the view from The Plaza.

. . . For one thing, none of it is "fancy." Secondly, I am not being scrutinized because of a scandal involving a major corporation and billions of dollars going tits-up. Apples and oranges, mon frere! Everything I do is off the radar because there is nothing in the least bit shady about what I do . . . .

My point is not that you are not squeaky clean, etc. My point is that you judging someone legally guilty without knowing the facts is likely the same judgement you would get from a poverty stricken person. I pointing out that both are unfair.

. . . Again, right now the appearance is that these guys are guilty until proven innocent. . . . .

Well, that is not how the system works. And, you should be thankful for that because without it people would be shooting what they perceive as sinners right and left :shrug:

If there was fraud here, and there likely was or at least the case can be made udner RICO (a fairly easy burden) or some other Act, then they will go to jail. Again, most of the crooks in the past decade were convicted. I personally think kCongress should change the law and allow the govt. to seize all assets given again or sold for non fair market value within a year of the fraud.

[SuzeQuze]

See, it's shizz like this that makes me batshizz about the unmitigated corporate greed at BS:

http://www.observer.com/2008/bear-stearns-cayne-takes-plaza-then-bridge

Bear Stearns' Cayne Takes The Plaza, Then Bridge
by Tom Acitelli | March 17, 2008 | Tags: Real Estatebear stearnsJames CayneThe Plaza

Bear Stearns chairman James Cayne was in Detroit at the start of the weekend that saw the tanking of his venerable investment bank. Why? Mr. Cayne was competing in the North American Bridge Championship, according to reports.

Also last week, as the perfect storm gathered, Mr. Cayne closed on a $25 million condo at the revamped Plaza.

********
If there is any justice in the world, the SEC or the Fed or somebody should be going after the personal assets of these criminals. Government Repo Sale at The Plaza! Besides, who needs The Plaza when there is a luxury suite waiting for him at Rykers Island.

Asshole. When I got laid off from my last job the new CEO bought a $3 million house in Martha's Vineyard. He was new so didn't exactly do anything criminal and I don't know that he ever did. However, the company was suffering and he paid himself 4x what the prior CEO did. I believe he also exercised options to buy that house. He did eventually get let go though. Karma.

[HejiraNYC]

How exactly was Bear Stearns bailed out? The company was worth tens of billions of dollars and got sold for $262 million. Their office tower on Madison was worth $1.3 billion, not to mention the other viable assets of the firm. So, Bear Stearns was most certainly not bailed out. Rather the sale to JP Morgan was a fire sale that stopped a run on a bank. JP Morgan will make billions off of this. Hopefully, they structured it so that the $30 billion or so in Fed backing for the mtg. securities will have to be repaid is they turn out to be good, which is unlikely.

True, Bear Stearns is history. However, the House of Cards/ponzi scheme was bailed out with government money, and JP Morgan Chase just happened to be the one and only company willing to stand up and take on this catastrophe with the help of taxpayer money. And about this so-called 30 billion-dollar "loan," do you honestly think that it will ever get paid back? :rolleyes:


But, your point is interesting and, quite frankly, very conservative. You are endorsing a free maket with no govt. interderence, which is the best method or correcting the market, though it also is the harshest. It is the harshest because it provides no stability to the markets and corrections turn into panics. So, some govt. interference is required IMO.

Yes and no. We need an open market; however it needs to be tightly regulated, to the point where disasters like this would be prevented. But what's galling about all of this is the way Wall Streeters were such open market capitalists on the way up, but suddenly have become socialists on the way down. They are indeed having their cake and eating it too. Not only should Wall Street take on a big giant IOU for all of this, the Federal Bank should fall completely under the control the U.S. government (contrary to popular belief, it is indeed a private organization with Wall Street insiders on their board). As for the markets, I think they should correct without government intervention, even if it means they crash. If the government intervenes in bad times, doesn't it also mean that the government and taxpayers should share in the profits during the good times too? One or the other, folks!


Interestingly, one of the primary reasons NOLA is not rebuilt is the people there are arguing about what to do. There are big plans to redo many neighborhoods, but the homeowners, city, state, and Feds cannot agree on issues of property rights. I will say this though - much progress has happened, though much remains to be done.

True, however, with the proper funding and leadership, NOLA would be much further along today. In any case the bottom line is that leadership, money and resources were focused on waging a losing war (based on lies and greed) in Iraq while people were dying unnecessarily and/or living in Third World conditions in our own country. What would Jesus have done? :shrug:

[strandinthewind]

Asshole. When I got laid off from my last job the new CEO bought a $3 million house in Martha's Vineyard. He was new so didn't exactly do anything criminal and I don't know that he ever did. However, the company was suffering and he paid himself 4x what the prior CEO did. I believe he also exercised options to buy that house. He did eventually get let go though. Karma.

1. If he could fix the company, he likely was worth it.

2. How is it karma when he did nothing wrong? True, that you lost your job sucks, but his getting let go was some kind of cosmic payback for that?

To beat a dead horse, people just love to hate the rich, some of them I suppose derserve it, but not all of them :shrug:

[strandinthewind]

. . . True, however, with the proper funding and leadership, NOLA would be much further along today . . . .

The trouble is you are dealing for the most part with individual property rights, which the govt. cannot without good cause take away. It is very hard to tell someone (rich or poor) that they can no longer live in the house they inherited from their parents and they have to move ten miles away to where it is safer.

Personally, I think the Fed. Govt. should have just passed a bill, paid these people the fair market value for their land in areas like the Ninth Ward, which always floods, and have been done with it. Let them go buy houses in safer areas or leave the city. Then, take that area and make it into a spillway. To me, that is the only viable solution. But, that is political suicide and in many ways an awful thing to do to someone.

[strandinthewind]

. . . And about this so-called 30 billion-dollar "loan," do you honestly think that it will ever get paid back? :rolleyes: . . . .

I do not think it is a loan. I think the Fed backed the obviously troubled debt. So, if that debt does what they think it will and goes bad (if it is not already there) JP Morgan is not responsible. So, the Fed is only on the hook to absorb the losses. If the losses do not happen, which appears to be unlikely, then JP Morgan gains an asset. So, I think my use of the word "loan" was a mistake. I could be wrong though. The deal appears quite complicated and the entire then is not out yet, but likely will be if Bear Stearns accepts the deal, which it may not BTW.

[strandinthewind]

. . . doesn't it also mean that the government and taxpayers should share in the profits during the good times too? One or the other, folks . . . .

Well, it does. Look at that tax base article I posted earlier. When times are good, the various govt.'s make tons of money as well :shrug:

[SuzeQuze]

1. If he could fix the company, he likely was worth it.

2. How is it karma when he did nothing wrong? True, that you lost your job sucks, but his getting let go was some kind of cosmic payback for that?

To beat a dead horse, people just love to hate the rich, some of them I suppose derserve it, but not all of them :shrug:

He had no skills to fix the company. He was brought in because of who he knew. I do not just like to hate the rich. You're making a huge assumption there. Big leap.

[David]

To beat a dead horse, people just love to hate the rich, some of them I suppose derserve it, but not all of them :shrug:I like rich people & I like greedy corporations: They enable me to make an income & buy stuff like food & shelter & computers to read the Ledge! We need MORE greedy corporations, not fewer -- & we need LESS state regulation, not more. :thumbsup:

[strandinthewind]

He had no skills to fix the company. He was brought in because of who he knew. I do not just like to hate the rich. You're making a huge assumption there. Big leap.

I did not know or assume he could. I specifically said "if" :shrug:

You seemingly are quick to judge the rich as scoundrels. If not, I recant with hat in hand.

[HejiraNYC]

I do not think it is a loan. I think the Fed backed the obviously troubled debt. So, if that debt does what they think it will and goes bad (if it is not already there) JP Morgan is not responsible. So, the Fed is only on the hook to absorb the losses. If the losses do not happen, which appears to be unlikely, then JP Morgan gains an asset. So, I think my use of the word "loan" was a mistake. I could be wrong though. The deal appears quite complicated and the entire then is not out yet, but likely will be if Bear Stearns accepts the deal, which it may not BTW.

Oh, it is definitely considered a "loan," on top of the $200 billion "loan" pumped into the Fed last week. And this is on top of the billions already "loaned" to Wall Street over the past six months. But then again, I don't know where all of this money goes or how it is "packaged" and sold off. It just seems like monetary supply is always growing bigger and bigger, and that any financial problems are simply inflated away these days.

[HejiraNYC]

Well, it does. Look at that tax base article I posted earlier. When times are good, the various govt.'s make tons of money as well :shrug:

But tax revenue is collected no matter what. From everybody. So does that mean if I was reckless with my money and bought millions of dollars worth of dot-com stocks in the late 1990's, that I am entitled to a government-sponsored bailout because I paid my taxes? :shrug:

[strandinthewind]

I like rich people & I like greedy corporations: They enable me to make an income & buy stuff like food & shelter & computers to read the Ledge! We need MORE greedy corporations, not fewer -- & we need LESS state regulation, not more. :thumbsup:

Interestingly, what is greed and what is normal compensation and/or profit. Who sets that bar? In the end, the number will always be arbitrary. The poorest of the poor will say that anyone making, say, $50,000 a year is a crook, privileged, etc. Most middle class people have never made over a million dollars a year or know anyone well who does. So, they may assume the millionaires are crook, privileged, etc. - despite that many of them worked legally, honestly and hard for it.

In the end, I am all about the facts and try never to rush to convict without them.

[strandinthewind]

But tax revenue is collected no matter what. From everybody. So does that mean if I was reckless with my money and bought millions of dollars worth of dot-com stocks in the late 1990's, that I am entitled to a government-sponsored bailout because I paid my taxes? :shrug:

Well, no. When times are good, there is way more tax to collect and the huge rev. generated by companies like Bear Stearns pays or generates much of it, which is what that article said.

And - the govt. sadly will never or rarely will help out individual people, though it did in the Bear Stearns instance because if that company went broke, the run on banks would have been devastating.

But, I agree, the govt. helps out corps in a way that is awful. I mean look at your phone bill. In Georgia and I suspect elsewhere because it is a Fed Tax, we pay something like $5.00 per phone line to subsidize AT&T's cost for providing phone lines to rural areas :eek: That is an INSANE govt. handout. Why the hell shouldn't AT&T, a private but regulated entity, revise the national average price per line and absorb the cost themselves instead of getting arguably BILLIONS a year if not month in that subsidy.

[SuzeQuze]

I did not know or assume he could. I specifically said "if" :shrug:

You seemingly are quick to judge the rich as scoundrels. If not, I recant with hat in hand.

Well no. The scoundrels are just the ones I comment on! :lol: He was not a good person and as I noted, he was eventually let go. I applaud many rich people and hope to be one one day. ;) That said I'm sure I do have a bias against the rich. That happens when you have a dad who grew up poor, on Social Security because he lost his dad at a young age. But he and I have both come a long way.

[strandinthewind]

. . . and hope to be one one day . . . .

When you are, I will marry you :cool:

[SuzeQuze]

When you are, I will marry you :cool:

Nice :thumbsup: I better become VERY rich then! I'm thinking an invention everybody needs is the way to go for me.

[HejiraNYC]

In the end, I am all about the facts and try never to rush to convict without them.

The facts are:

-Top Bear Stearns brass made millions upon millions over the past couple of years.
-Top Bear Stearns brass stated unequivocally (deceptively) that all was fine.
-Bear Stearns was among the largest dealers of mortgage-backed securities, which they ALL KNEW was a ticking timebomb.
-They knowingly defrauded thousands of shareholders.
-They continued to pay themselves royally during the ponzi scheme, all the while realizing that it was unsustainable.

Sure, they could all testify that they had no idea what was going to happen with all of that mortgage-backed junk. N*gg@, please. :rolleyes: Even Helen Keller could see what was going to happen. They were reckless with other people's money and skimmed off the fat before getting caught.

[strandinthewind]

The facts are:

-Top Bear Stearns brass made millions upon millions over the past couple of years.
-Top Bear Stearns brass stated unequivocally (deceptively) that all was fine.
-Bear Stearns was among the largest dealers of mortgage-backed securities, which they ALL KNEW was a ticking timebomb.
-They knowingly defrauded thousands of shareholders.
-They continued to pay themselves royally during the ponzi scheme, all the while realizing that it was unsustainable.

Sure, they could all testify that they had no idea what was going to happen with all of that mortgage-backed junk. N*gg@, please. :rolleyes: Even Helen Keller could see what was going to happen. They were reckless with other people's money and skimmed off the fat before getting caught.

Great - show me the law. I suggest RICO applies.

[HejiraNYC]

the run on banks would have been devastating.



Hmmm... you mean like the 1980's S&L Scandal involving Jeb, Neil and GW BUSH?

[strandinthewind]

Hmmm... you mean like the 1980's S&L Scandal involving Jeb, Neil and GW BUSH?

It wasn't just them and I suggest it started brewing in the 70's.

In the end, some, but certainly not all, corps are always trying to get away with something. Remember the check kiting scheme EF Hutton did :eek: I think that the Bear Stearns big wigs likely will be prosecuted. However, we need to see the books to determine that. Even if they did nothing illegal regarding the trading of the AAA bonds, if they consistently lied while diluting their own shares, they likely will go to jail as many others have in the past.

[petep9000]

The facts are:

-Top Bear Stearns brass made millions upon millions over the past couple of years.
-Top Bear Stearns brass stated unequivocally (deceptively) that all was fine.
-Bear Stearns was among the largest dealers of mortgage-backed securities, which they ALL KNEW was a ticking timebomb.
-They knowingly defrauded thousands of shareholders.
-They continued to pay themselves royally during the ponzi scheme, all the while realizing that it was unsustainable.

Sure, they could all testify that they had no idea what was going to happen with all of that mortgage-backed junk. N*gg@, please. :rolleyes: Even Helen Keller could see what was going to happen. They were reckless with other people's money and skimmed off the fat before getting caught.

My best friend had been hired by Bear some years back as an auditor. On his first day at work, his director handed him 2 plastic baggies. One with paper clips, and one with rubber bands. And he was told that these were the only clips or bands he would get during his time there, as they had done a cost analysis and found that those two items were frequently wasted, or stolen. This is the thanks he got, for a position that he would sometimes wind up working 13 hour days for.

What's the old expression? Penny-wise but pound-foolish?

[JWS]

It's actually the legacy of the 50+ million ignorant nutjob Americans out there who voted for GWB. Surely it's because everyone knows that the gays and the pro-choicers are destroying the fabric of society, whereas, a former oilman and a former executive at Halliburton would certainly look out for our best interests and would make us safer. Oh, and surely bailing out their buddies on Wall Street rather than rebuilding New Orleans is surely the moral and "Christian" thing to do. :rolleyes:

.

I agree. George Bush stole the election by one vote...5-4, by the Republican Supreme Court.

IMO, and plenty of others, Bush will go down as the worst President in modern history. Enerything he touched has been a disaster. I can't think of a single positive accomplishment of his inept administration.

[gldstwmn]

When you are, I will marry you :cool:

Cheating on me again, I see. :laugh:

[strandinthewind]

Cheating on me again, I see. :laugh:

What can I say :cool:

[SuzeQuze]

What can I say :cool:

:lol: Chris, he goes where the $$$$$$$$$ is. Of course I only have it in my dreams right now so all bets are off. Plus, I am not opposed to sharing. :xoxo: Haha.

[strandinthewind]

The article below represents the second wave, which I submit will be far worse than the first wave, which was the failing of roughly 9 or so percent of the sub prime mortgages out there and the ripple effect. It just amazes me that banks still look to force a foreclosure when they will get less money a la the Phoenix example set forth below. Fraud aside (which does not appear to be the case there) - that deal seems like a win win for everyone.

In the end, as noted in the article, many people have used their homes as an ATM and are balking now that they have to pay it back. Taking out all the equity in your home to go to Europe or even educate your children (there are cheaper schools and your kids can get loans or possibly scholarships, work/study programs, or grants :shrug: ) is not the soundest financial planning. The soundest financial planning is to ignore the yearning to Jones on your neighbors and pay off your house instead of borrowing against it to live beyond your cash based means. In the end, I do not feel sorry for anyone who took out all of the equity in their home and spent it on BS and now bitch about paying it back and/or that the house is not worth what they owe. That was the clear risk they took when making the loan. To say one did not know it now is utter BS IMO.

In the end, many people have lost their homes though no fault of their own. I am not talking about them. But, all this "poor Johnny home owner who is mortgaged to the hilt for convenience and now is losing their house so let's get the taxpayers to bail them out" is just BS to me. I say let them declare bankruptcy and be done with it if the assinine banks won't work with them. The banckruptcy likely will allow them to discharge the extra debt and keep their house.

______________________________________________________________________________________

March 27, 2008

Equity Loans as Next Round in Credit Crisis

By VIKAS BAJAJ

Little by little, millions of Americans surrendered equity in their homes in recent years. Lulled by good times, they borrowed — sometimes heavily — against the roofs over their heads.

Now the bill is coming due. As the housing market spirals downward, home equity loans, which turn home sweet home into cash sweet cash, are becoming the next flash point in the mortgage crisis.

Americans owe a staggering $1.1 trillion on home equity loans — and banks are increasingly worried they may not get some of that money back.

To get it, many lenders are taking the extraordinary step of preventing some people from selling their homes or refinancing their mortgages unless they pay off all or part of their home equity loans first. In the past, when home prices were not falling, lenders did not resort to these measures.

Such tactics are impeding efforts by policy makers to help struggling homeowners get easier terms on their mortgages and stem the rising tide of foreclosures. But at a time when each day seems to bring more bad news for the financial industry, lenders defend the hard-nosed maneuvers as a way to keep their own losses from deepening.

It is a remarkable turnabout for the many Americans who have come to regard a home as an A.T.M. with three bedrooms and 1.5 baths. When times were good, they borrowed against their homes to pay for all sorts of things, from new cars to college educations to a home theater.

Lenders also encouraged many aspiring homeowners to take out not one but two mortgages simultaneously — ordinary ones plus “piggyback” loans — to avoid putting any cash down.

The result is a nation that only half-owns its homes. While homeownership climbed to record heights in recent years, home equity — the value of the properties minus the mortgages against them — has fallen below 50 percent for the first time, according to the Federal Reserve.

Lenders holding first mortgages get first dibs on borrowers’ cash or on the homes should people fall behind on their payments. Banks that made home equity loans are second in line. This arrangement sometimes pits one lender against another.

When borrowers default on their mortgages, lenders foreclose and sell the homes to recoup their money. But when homes sell for less than the value of their mortgages and home equity loans — a situation known as a short sale — lenders with first liens must be compensated fully before holders of second or third liens get a dime.

In places like California, Nevada, Arizona and Florida, where home prices have fallen significantly, second-lien holders can be left with little or nothing once first mortgages are paid.

In December, 5.7 percent of home equity lines of credit were delinquent or in default, up from 4.5 percent in 2006, according to Moody’s Economy.com.

Lenders and investors who hold home equity loans are not giving up easily, however. Instead, they are opposing short sales. And some banks holding second liens are also opposing refinancings for first mortgages, a little-used power they have under the law, in an effort to force borrowers to pay down their loans.

“Acknowledging a loss is the most difficult thing to do,” said Micheal Thompson, the executive director of the Iowa Mediation Service, which has been working with delinquent borrowers and lenders. “You have to deal with the reality of what you are facing today.”

While he has been able to strike some deals, Mr. Thompson said that many mortgage companies he talks with refuse to compromise. Holders of second mortgages often agree to short sales and other changes only if first-lien holders pay them a small sum, say $10,000, or 10 percent, on a $100,000 debt.

Disagreements arise when the first and second liens are held by different banks or investors. If one lender holds both debts, it is in their interest to find a solution.

When deals cannot be worked out, second-lien holders can pursue the outstanding balance even after foreclosure, sometimes through collection agencies. The soured home equity debts can linger on credit records and make it harder for people to borrow in the future.

Experts say it is in everyone’s interest to settle these loans, but doing so is not always easy. Consider Randy and Dawn McLain of Phoenix. The couple decided to sell their home after falling behind on their first mortgage from Chase and a home equity line of credit from CitiFinancial last year, after Randy McLain retired because of a back injury. The couple owed $370,000 in total.

After three months, the couple found a buyer willing to pay about $300,000 for their home — a figure representing an 18 percent decline in the value of their home since January 2007, when they took out their home equity credit line. (Single-family home prices in Phoenix have fallen about 18 percent since the summer of 2006, according to the Standard & Poor’s Case-Shiller index.)

CitiFinancial, which was owed $95,500, rejected the offer because it would have paid off the first mortgage in full but would have left it with a mere $1,000, after fees and closing costs, on the credit line. The real estate agents who worked on the sale say that deal is still better than the one the lender would get if the home was foreclosed on and sold at an auction in a few months.

“If it goes into foreclosure, which it is very likely to do anyway, you wouldn’t get anything,” said J. D. Dougherty, a real estate agent who represented the buyer on the transaction.

Mark Rodgers, a spokesman for CitiFinancial, declined to comment on the McLains’ situation, citing privacy considerations.

“We strive to find solutions that are acceptable to the various parties involved,” he said but two lenders can “value the property differently.”

Other lenders like National City, the bank based in Cleveland, have blocked homeowners from refinancing first mortgages unless the borrowers pay off the second lien held by the bank first. But such tactics carry significant risk, said Michael Youngblood, a portfolio manager and analyst at Friedman, Billings, Ramsey, the securities firm. “It might also impel the borrower to file for bankruptcy,” and a judge could write down the value of the second mortgage, he said.

A spokeswoman for National City, Kristen Baird Adams, said the policy applied only to home equity loans originated by mortgage brokers.

Underscoring the difficulties likely to arise from home equity loans, a Democratic proposal in Congress to refinance troubled mortgages and provide them with government backing specifically excludes second liens. Lenders holding a second lien would be required to write off their debts before the first loan could be refinanced. That could leave out a significant number of loans, analysts say.

People with weak, or subprime, credit could be hurt the most. More than a third of all subprime loans made in 2006 had associated second-lien debt, up from 17 percent in 2000, according to Credit Suisse. And many people added second loans after taking out first mortgages, so it is impossible to say for certain how many homeowners have multiple liens on their properties.

“This is turning out to be a real impediment to solving this problem,” said Mark Zandi, chief economist at Economy.com, “at least, solving it quickly.”

www.nytimes.com

[DavidMn]

You know, I'm not the most brilliant financial mind, but a few years back when all these "experts" were proclaming the economy to be taking off like a rocket because homeowners had all this money from the equity in their homes, I knew the chickens would come home to roost eventually.:nod:

[HejiraNYC]

The article below represents the second wave, which I submit will be far worse than the first wave, which was the failing of roughly 9 or so percent of the sub prime mortgages out there and the ripple effect. It just amazes me that banks still look to force a foreclosure when they will get less money a la the Phoenix example set forth below. Fraud aside (which does not appear to be the case there) - that deal seems like a win win for everyone.

In the end, as noted in the article, many people have used their homes as an ATM and are balking now that they have to pay it back. Taking out all the equity in your home to go to Europe or even educate your children (there are cheaper schools and your kids can get loans or possibly scholarships, work/study programs, or grants :shrug: ) is not the soundest financial planning. The soundest financial planning is to ignore the yearning to Jones on your neighbors and pay off your house instead of borrowing against it to live beyond your cash based means. In the end, I do not feel sorry for anyone who took out all of the equity in their home and spent it on BS and now bitch about paying it back and/or that the house is not worth what they owe. That was the clear risk they took when making the loan. To say one did not know it now is utter BS IMO.

In the end, many people have lost their homes though no fault of their own. I am not talking about them. But, all this "poor Johnny home owner who is mortgaged to the hilt for convenience and now is losing their house so let's get the taxpayers to bail them out" is just BS to me. I say let them declare bankruptcy and be done with it if the assinine banks won't work with them. The banckruptcy likely will allow them to discharge the extra debt and keep their house.



Maybe I'm just turning into an old curmudgeon, but way back in the day, it seemed like you could pretty much assess the wealth of a person based upon the clothes they wore or the car they drove or the kind of stores they shopped in. And if you didn't have the newest and best of everything, it was okay, because you were just like everyone else- living simply, humbly and within their means. But today it seems like everybody is driving the newest, nicest luxury cars, buying $200 jeans and $5000 handbags, flat screen TV's, etc. And it isn't like the country has suddenly become so productive and wealthy. It's just that there is so much more credit available and people have been brainwashed into thinking that it is okay to run up your credit cards/home equity line of credit, and be indebted up to your eyeballs because stuff=happiness and debt=wealth. And somehow the perception of wealth has become more important than wealth itself; why settle for shopping at KMart when a thin little piece of magnetized plastic can enable you to shop at Bergdorfs?

It really is maddening to hear about people griping because they looted their housing equity to support lifestyles that were way beyond their means, and now they owe more than the value of the house. Boo-freakin'-hoo! You should have thought about that before buying that Hummer H2 that you can no longer afford to fuel up. I only wish that there was a way for these kinds of people to be responsible for their debt obligations forever; however, unfortunately it is just too easy to walk away. It makes me feel like an idiot for being fiscally responsible and living within my means.

[strandinthewind]

. . . It makes me feel like an idiot for being fiscally responsible and living within my means.

Well you are and you aren't. It really just depends on your conscious. You likely could have spent two or three times more than your actual level of spending over the last few years, gotten into horrible debt you knew you could never repay and then filed for banktruptcy and wiped out that debt or paid back pennies on the dollar, while still having had the experience of the high life and keeps the vast majority of the assets acquired therein. If you could live with yourself, then who really cares. And - no one really would know what you did because it is not like they post filings in the front page of the NY Times :shrug:

Bankruptcy is a good thing when used by people who are in a bind and cannot get out. I am not talking about them and I think they are good people in a jam, which is that the system was meant to address. But, it will now be used for the situation I just described, which emboldens IMO the American and somewhat world position of no responsibility for my actions mentality.

And, even with a bankruptcy, you can get a market rate mortgage that is Federally backed - and, if your income is high enough, you have a cosigner, and/or a year or so has passed in which you have demonstrated the ability to pay a credit card - a market rate conventional loan likely is available to you.

[David]

But today it seems like everybody is driving the newest, nicest luxury cars, buying $200 jeans and $5000 handbags, flat screen TV's, etc. And it isn't like the country has suddenly become so productive and wealthy. It's just that there is so much more credit available and people have been brainwashed into thinking that it is okay to run up your credit cards/home equity line of credit, and be indebted up to your eyeballs because stuff=happiness and debt=wealth.Yes, indeedy. For the past fifteen years or so, everybody -- & I mean everybody -- has gotten those little notices from all the credit card companies that say: "Congratulations! We've just raised your credit limit!"

Hehheh....not so many of those being mailed out at the moment.
:laugh:

[skcin]

But today it seems like everybody is driving the newest, nicest luxury cars, buying $200 jeans and $5000 handbags, flat screen TV's, etc. And it isn't like the country has suddenly become so productive and wealthy. It's just that there is so much more credit available and people have been brainwashed into thinking that it is okay to run up your credit cards/home equity line of credit, and be indebted up to your eyeballs because stuff=happiness and debt=wealth.

Exactly. I blame the gays. And Project Runway. :D

[strandinthewind]

Exactly. I blame the gays. And Project Runway. :D

La même chose Ã* mon opinion :shrug:

[skcin]

La même chose Ã* mon opinion :shrug:

Come on, if it weren't for Tim Gunn making me feel that I'll look like **** unless I have a fabulous signature piece, I wouldn't need to go out & spend spend spend! :(

You know I'm kidding. :cool: That's not how I roll.

[strandinthewind]

Come on, if it weren't for Tim Gunn making me feel that I'll look like **** unless I have a fabulous signature piece, I wouldn't need to go out & spend spend spend! :(

You know I'm kidding. :cool: That's not how I roll.

My dearest one - you would good decked out in anything from anywhere :cool:

I am the first to LOVE the fab. brands like Prada and if I find them at like 90% off, I will buy them. I usually shop at Gap (HUGE sales - like $5.00 pants) - Marshalls, etc. I still go in Neiman's and drool and then wait for the year end sale.

[David]

I am the first to LOVE the fab. brands like Prada I buy Wranglers & Levis, & my footwear is New Balance All Terrain & New Balance C-Cap. I sleep & nap in my boxers, & my T-shirts are custom-made from an online vendor that puts pictures of Stevie Nicks, W.C. Fields & Jacques Barzun on the front & back.

I buy DVDs from DeepDiscountDVD & DVD Planet, & I like old-fashioned hot-air balloons.

http://dustbubble.files.wordpress.com/2007/09/image003.jpg

[strandinthewind]

I buy Wranglers & Levis, & my footwear is New Balance All Terrain & New Balance C-Cap. I sleep & nap in my boxers, & my T-shirts are custom-made from an online vendor that puts pictures of Stevie Nicks, W.C. Fields & Jacques Barzun on the front & back.

I think La Nicks' image homage is better suited for crotchless pantaloons or, in a pinch, apricot colored bloomers.


. . . I like old-fashioned hot-air balloons.

http://dustbubble.files.wordpress.com/2007/09/image003.jpg

Me too!