Financial Meltdown (4 Viewers)

[Njja]

I don't understand. We just heard that this will def cost the tax-payer hundreds of billions to absorb the bad MBS's and the market shoots up? So, everything is ok as long as people like you and me take on the bad debt?

I don't want to pay for this. I shouldn't have to pay for this.




Thank You Gideon!

Finally someone upset by this mismanagement of our financial resources!

I have been paying into Social Security for 42 years, never had a problem glad

to contribute to the "Social Security Trust Fund".......only there is no "Fund"

The money goes into the general fund.....and when someone needs it they

just take it out and drop in an IOU. 30 Billion to start the war, 300 Billion for

the hurricane, 85 Billion for AIG 850 Billion for this little fiasco.......oh folks

by the way don't count on Social Security because by 2017 its going to have

a negitive cash flow......so well we might not need it anymore.

I have news for these clowns, I don't want to hear it.

Here's another little Gem to mull over the inheritance tax is set to expire on

1/1/2011 when it will revert to 55% of any estate over 1 Million........55%!

Lets say you worked hard you entire life, you have a nice home, and some

modest investments.....maybe a piece of land, or a vacation home. You wish

to past on your lifes accomplishments to your children. You leave an estate

of 2 Million. In steps Uncle Sam who hands your children a bill for $550,000?

Now you paid your taxes all these years......this is your savings, your lifes

work 55% of anything over 1 Million?

Lets say you had a small business like our friends here at Treefrog, its debt

free and valued at 2 Million it provides a nice income. In comes the tax man

now the business must either be sold or carry a $550,000 debt whose service

might ruin the profitability of the company.

This need for cash, your cash is a direct result of the people in power

forgetting its not their money its ours.

 

[1879fanatic]

Njja,

I'm sorry, but you have it wrong on the estate tax. Treefrog would owe
1,100,000.00 from whoever inherits it. Sounds like confiscation of property. I like your idea in several posts ago: Let the bad decisions fail and the good decisions succeed. Mike

 

[theBaron]

I agree, Spitfrnd, use of the term "meltdown" is the worst kind of sensationalism. I don't mean to criticize anyone here in the forum for that term, I decry the news media, who live from ratings, for using such terms.

It's serious, but it's not a depression, it's not 1929, and it's not the Second Coming.



Every American has just been handed a bill for $8500 which is going to have

to be paid by higher taxes. We are allowing the people that were in charge

to fix the problem.....never a good idea.

Using terms like "Financial Meltdown" is a wake up call for Americans.....it

is not our "Duty" to pay taxes it is the governments job to serve the people,

to be financially responsible with our tax dollars and treat everyone equally.

My parents worked hard to own a home, I worked hard to own a home,

my daughter did the same, my grandaughter will benefit from all these years

of labor. This is the American way, work hard and you can achieve anything.

Its not we're going to put people in a home they can't afford, then give

the bill to everyone else.

So now we all get to write a check for $8500 to keep someone in a home

that more likely then not cost more then the one you are living in.

This home may be in foreclosure, as over 2 million are, but lets not worry

the loans will be reworked to 30 year fixed rate......that they still can't pay

for ie......."I didn't know what I was signing"

So we will go through this again in 6 months or a year when the new loans

are in foreclosure.

Bottom line is if you can't afford it.....don't buy it.

Well, another point I often make (not in this forum) is that, short of armed insurrection, we are not going to roll back either the growth of government, nor the spread of what are, in effect, Marxist political, economic and social beliefs. Once they are entrenched, they cannot be undone by any other means, other than cataclysmic upheaval.

No bureaucrat will ever willingly submit to having his satrap eliminated, no leftist intellectual will ever be convinced that he doesn't know better than everyone else how everyone else should live, in short, the processes that have been at work for nearly 100 years have lain down so much sediment, that we will can't simply reason our way out

Not advocating it, just saying, that's how it seems to me, the more I look at the federal government, state governments, and modern American liberals act and speak.

 

[Njja]

Another very good point, very appropriate to mention!

No one should be allowed to sell stock they do not own. This day trading,

and selling short is yet another factor of mismanagement of the financial

sector.

The original purpose of stock was to give businesses the opportunity to sell

a piece of their company to the public to rase funds without having to

explain their financial position to the banks.

Its easy to say I don't buy stocks....so why do I care?

Even though you might not personally be in the market, your 401K, or other

retirement vehicle is more then likely somehow tied to the market.

As a general rule a modest investment in a solid company can produce a

nice return.

A $10,500 investment in Coke in 1986 would have repaid your initial

investment many times over. Currently evey 3 years your dividens exceed the

initial investment. On top of this return your stock would be worth $125,000.

Certainly something to consider.

 

[Njja]

Njja,

I'm sorry, but you have it wrong on the estate tax. Treefrog would owe
1,100,000.00 from whoever inherits it. Sounds like confiscation of property. I like your idea in several posts ago: Let the bad decisions fail and the good decisions succeed. Mike

Hi Mike.....believe me I don't have it wrong!

The 1st Million is exempt, so a 2 Million dollar estate would have a tax liability

of 55% on the second million, or $550,000. Of couse most states also

have an estate tax in New Jersey it is on any estate over $650,000.

As home vaules increase this is going to effect more and more American

families.

 

[Spitfrnd]

Every American has just been handed a bill for $8500 which is going to have to be paid by higher taxes. We are allowing the people that were in charge to fix the problem.....never a good idea.
.....it is not our "Duty" to pay taxes it is the governments job to serve the people, to be financially responsible with our tax dollars and treat everyone equally.

Where are you getting the $8500 per taxpayer number? I would agree, as Jefferson would, that taxes should not be used for income redistribution. If you agree, throw out every Democrat (they are the worse) and fiscally irresponsible Republican that wants to do this, however subtlely. Here's a flash, the graduated income tax is one of our many forms of wealth redistribution. I would love to see us go to a flat tax, all the same for all, no deductions, no exceptions. We do not seem to have the will for that because someone either thinks it is unfair (being equal to some means something closer to socialism) or is afraid their favored group will lose out. If you want to treat everone equal, you have a lot of ground to make up and the mortgage issue is a very tiny part of that problem.

My parents worked hard to own a home, I worked hard to own a home,

Same here.

This is the American way, work hard and you can achieve anything.
Its not we're going to put people in a home they can't afford, then give
the bill to everyone else.

Well that gets to the main point of all this as I noted in my discussion of the underlying causes. The decision to promote this as a welfare solution was made with a poor assessment of the risk or cost. The assumption was that the risk was small and the cost was negligible. That said, if you think the government is going to allow massive home loss in an election year, I have some great bonds for you. However, as I also keep saying, none of us gain from a collapse of the financial markets. Now that would take more that a few years to repair. So some of this is a hobson's choice. Has our government over reacted, probably yes.

 

[damian]

Doesn't this sort of thing happen every 10 years or so. I seem to remember teh Dot.com thing was in 1999/2000 and before that in 1987 there was a big correction.
Regards
Damian

 

[Njja]

Well, another point I often make (not in this forum) is that, short of armed insurrection, we are not going to roll back either the growth of government, nor the spread of what are, in effect, Marxist political, economic and social beliefs.


I don't agree, each citizen can start by simply getting involved in his

community. Run for city council, school board, join the chamber of commerce.

We have a current candidate that did exactly that, taking a lot of heat I

might ad, but you have to admire her spirit.

When I get back to Jersey I'm going to participate in my local community....

.........or maybe.....just go back to the beach.

 

[vandilay]

Although the American taxpayer looks like wearing the brunt of this,
Any country that runs a defecit or joe public in those countrys with
a mortgage will also take a hit ,as due to the percieved risk now
the cost of borrowing money from anywhere has gone up.

From the sidelines I still wonder what choice they had but to act,
People who cant afford to pay should not be allowed to borrow but
that horse had already bolted [we had the same thing here with consumer credit and most of those finance companys have now gone bust taking their
investors money with them ]
in the fear and greed cycle fear is firmly in the drivers seat at present.

 

[Njja]

Where are you getting the $8500 per taxpayer number?

Number just offered from the news. They actually gave a higher figure...

I rounded it down for the sake of Forum Sanity.

I agree with your assessment of our political situation.....but we can't just

let the monkeys run the Zoo!

I'm counting on my Social Security to buy me at least a gallon of Gas!

 

[Njja]

Doesn't this sort of thing happen every 10 years or so. I seem to remember teh Dot.com thing was in 1999/2000 and before that in 1987 there was a big correction.
Regards
Damian

Yes.....like when AOL bought Time Warner.........what a mess that was!

 

[Spitfrnd]

Where are you getting the $8500 per taxpayer number? Number just offered from the news. They actually gave a higher figure...I rounded it down for the sake of Forum Sanity.
....

Ah well on complicated things like this (or often even on simple things), the news media oversimplifies to the point of absurdity. I suspect they are doing something like dividing total short term expected outlay by total taxpayers or something equally meaningless. Determining the true cost (or benefit) of this is no mean feat but I would trust that number about as much as I trust the people who wanted to expand the availability of mortgages.

 

[Njja]

I was thinking who is going to manage all the Sub Prime Mortgages purchased

by this new Agency? There are going to be homes in every county in the US.

Are we going to have thousands of new Government Employees? People to

manage these properties....to make sure the taxes are paid and they are

maintained?

And what about the deadbeats.....oh sorry the home-squaters?

A sensible solution would be to use the profits from the timed load payments

to pay down the Social Security IOU's and the principal to refund

the government bailout. But these people can't pay!

I fear they will lower the actual mortgage amount to the current value of the

home.....so a $500,000 home loaned at value + 25% or $625,000 might

result in a $350,000 (actual current market value) mortgage.

This would cost you and I $275,000.

I would hope this $275,000 would be applied as a lien to any future sale of

the property. Better to refund OUR money before these stiffs walk off with

a hefty profit and a new Mercedes.

 

[Canadian Samurai]

Guys, listen, this is all very interesting D) but you're not going to be able to change the world (to how you envision it should be), by ranting away in this little corner of cyberspace. Go out and breathe some fresh air, smell the flowers for the last time before winter sets in - it will do your body good.

 

[Njja]

Yes lets not talk about it........maybe it will all just fix itself!

And we can do something about it on Nov 4th!

No Incumbent should be returned!

And no intelligent politician should ever say it is citizens "Patriotic Duty" to

support wasteful tax increases!

Oh and I'm typing this note outside.

 

[Canadian Samurai]

........maybe it will all just fix itself!

Umm, but isn't that exactly the political principle you guys believe so fanatically in?

 

[Njja]

No its not. We believe in the free market economy system, I started this

thread because I thought a lot of Forum members might not understand what

was happening, and how it might affect them personally.

I have learned a bit more from some members, enjoyed a lively discussion and

I hope provided an insight or two for others to consider.

It is a serious situation that will more then likely have a few ramifications for

our Great Neighbor's to the North also.

 

[Canadian Samurai]

I started this thread because I thought a lot of Forum members might not understand what was happening, and how it might affect them personally.

Sorry, but I'm still confused, and I'm not trying to be facetious here. I just don't get the logic of what some of you guys are talking about. Right now this thread reads like some hallucinogenic attempt to try to rationalize that the cause of this crises is the solution…

It seems perfectly clear to me that it is an overly free, unregulated financial market that has led directly to this collapse. What’s to blame (and this is no different than the Great Depression) is that in the pursuit of private greed ahead of public good, we’ve ended up creating a global casino with no rules except make as much money for yourself as possible and screw society. And yet somehow, somehow, I don’t have a clue how, but it has, I see by page 6 this has turned into yet another tiresome rant against regulation and government and taxes? At the end of the day, what do you guys want, more regulation of financial markets or less? It's quite simple really. Or do you not even know what you want except to be bitter at a system which is failing to deliver the goods no matter what party is in power?

 

[Njja]

Wrong,

Here is it over simplified:

We have various Government Agencies which regulate our Banking,

Insurance, Investment, and the Stock Markets.

We also have Congressional Committees with oversight, and Cabinet Posts

such as the Secretary of the Treasury concerned with finance and monetary

stability of the US.

All of these people were aware of the SUB Prime Mortgage Mess.......giving

Mortgages to people without verifying their income or ability to pay.

Barney Frank current Chairman of the House Financial Services Committee

thought this was a good idea to put more (UNQUALIFIED) Americans in

homes.

Do they create neighborhoods with $100,000 starter homes that young

people just out of High School, Trade School, or College could buy for their

first home? No!

They sell them $200,000 to $1,000,000 homes then loan them an extra 25%

(to make the payments) and move them into all communities to accomplish

what?

Nothing like having a couple of homes in Foreclosure to spruce up your

environment.

I've even got a few folks in my area under some program called "Section 8"

they pay $100 a month and "We the People" pick up the rest....one of them

has a Mercedes and an Escalade.

Coming soon to a neighborhood near you!

 

[Pierre]

Sorry, but I'm still confused, and I'm not trying to be facetious here. I just don't get the logic of what some of you guys are talking about. Right now this thread reads like some hallucinogenic attempt to try to rationalize that the cause of this crises is the solution…

It seems perfectly clear to me that it is an overly free, unregulated financial market that has led directly to this collapse. What’s to blame (and this is no different than the Great Depression) is that in the pursuit of private greed ahead of public good, we’ve ended up creating a global casino with no rules except make as much money for yourself as possible and screw society. And yet somehow, somehow, I don’t have a clue how, but it has, I see by page 6 this has turned into yet another tiresome rant against regulation and government and taxes? At the end of the day, what do you guys want, more regulation of financial markets or less? It's quite simple really. Or do you not even know what you want except to be bitter at a system which is failing to deliver the goods no matter what party is in power?

Can't agree more with you, CS... and, as usual, it's the ones who are responsible for a situation who yap the louder, trying to hide their abuses... What was the US surplus when Clinton left the White House?... Now, the whole system must be saved by taxpayers... Where is the money they gave to their authorities over the eight last years?... In the pockets of stealers... They stole America... and they're comfortable with that There's even someone in that forum who was congratulating himself lately 'cause of the misfortune of his fellow-citizens... HE WAS HAPPY, HE WAS ABOUT TO MAKE MORE MONEY... Impossible to be more disgusting than that... Poor America... So great sometimes, but can be so little sometimes too...