Thread: Bank failure(s)

Originally Posted by SheepOfBlue

For legal reasons but it is a group of people that gathered to petition the government. Yes Mr Seamus can go to Washington to talk to Senator Shelby and I bet you can even get in and get some time with him if you arrange ahead a bit. However you like I and most Americans are busy working and gathering Ovine information when not doing dishes. So there are organizations formed of like minded people that petition the government while we take care of things on the home front. THAT is a lobbyist. The alternative is they only listen to someone wealthy enough to be able to afford the time or someone that is not working.

Once they created a paid board, hired spokespeople, etc, they are no longer "the people".

I don't disagree with the message, just the method. Any change to the Constitution requires ratification by the States. In most states, that requires a vote by, ummm, the people. Once people start getting paid for something involving government access, corruption and abuse of power is shortly behind. Check Mr. Sessions earmarks and congressional adds for a clear, undeniable example of this.

Certainly not perfect but the alternative is only the people can get in.... So what only a resident of Alabama? That means only those that can afford to go get heard? Or they just run amuck with no feedback? I think the far bigger issue is the loss of the power of impoundment by the presidency as I have stated before that resulted in the guarantee that ear marks will actually happen thus encouraging MASSIVE abuse.

Speaking of accountability, what's to be said about the accountability of all the people who took out mortgages they couldn't afford and went into foreclosure? If I loan you a hundred bucks and you don't pay me back, do you point the finger at me because it was too risky to loan it to you in the first place?

Originally Posted by phobiaphobe

Speaking of accountability, what's to be said about the accountability of all the people who took out mortgages they couldn't afford and went into foreclosure? If I loan you a hundred bucks and you don't pay me back, do you point the finger at me because it was too risky to loan it to you in the first place?

They should lose the house. Now many houses that are in trouble are the subprime crap and that is an issue. You see in you example you decided to loan to me due to my excess character, accepting the risk in a rational manner. However many of the loans are more like if you loaned the money to someone of Baketech's character thus you SHOULD have wondering if you would get paid back and adjusted the loan accordingly (like payday loan rates) Many of the loans risk was just ignored rather than adjusted for. The resulting crash upped the risk factor on many in a surprising manner.








j/k Bake see you soon

Phobe, I don't think Canada is in any better or worse situation than any other anglo-saxon country. I'm slightly surprised no Canadian bank has gone yet, but perhaps your housing boom and derivatives involvement is slightly less extended. What's the Canadian bank deposit situation?

Originally Posted by phobiaphobe

Speaking of accountability, what's to be said about the accountability of all the people who took out mortgages they couldn't afford and went into foreclosure? If I loan you a hundred bucks and you don't pay me back, do you point the finger at me because it was too risky to loan it to you in the first place?

Accountability? I think that word was removed from many Americans' dictionaries a long time ago.

I have thought about that many times as well. Sure, maybe some lenders were unscrupulous in convincing these people that they should take on these loans, but one should know their financial situation well enough to know if one can afford a mortgage or not.

A TV salesperson who sells a customer a $1500 TV that he/she cannot really afford doesn't get blamed when the customer cannot pay for it, even though the salesperson stressed that it would only be $XX dollars per month.

It's just another situation where no one is blaming consumers at all for their financial pitfalls, they are blaming companies for providing the services that the consumers shouldn't have been utilizing in the first place.

Originally Posted by oldfogey

Phobe, I don't think Canada is in any better or worse situation than any other anglo-saxon country. I'm slightly surprised no Canadian bank has gone yet, but perhaps your housing boom and derivatives involvement is slightly less extended. What's the Canadian bank deposit situation?

As I understand it, the really high-risk paper represents a smaller portion of the Canadian banks' portfolio, compared to the US lenders. Also, subprime mortgages here (anything with less than 25% down payment) are required to have insurance through the CMHC. The government recently tightened up the standards... they'll no longer insure mortgages over 35 years or with less than 5% down payment.

Being as big as we are, we've got a bunch of different stuff happening in the housing market. In southern Ontario I think we'll see big drops in value and a high foreclosure rate as the manufacturing sector tanks on the low American dollar... Meanwhile the oil-based economy of the west continues to bring in new workers who need homes, and our property values continue to rise, albeit not as rapidly as the past few years.

To be honest I have no idea what the hell is going to happen here, but I can see the $700b bailout driving up interest rates, and then we're screwed here too.

Originally Posted by jose_jimenez

But many Americans are quite stupid. You get a loan officer and realtor yelling "you can afford it," well it's easy to see how this happened. I don't think you can blame one part of it, it's all. From the banks/lenders, to greedy real estate people (loan person, realtor, etc), to the dolts trying to buy more than they can afford. Tighter regulation is needed on all these mother fuckers so the rest of us (taxpayers) don't have to shoulder the burden of their fuck ups.

Why should the government have to step in anyways? The market will correct itself right?

Greed is no doubt a big part of it. A bigger part is commission. If that's the only way someone gets paid they're going to sell you whatever they can so they can make their own mortgage payment. Survival of the fittest? Oh, wrong thread.

Originally Posted by ND4SPD

Greed is no doubt a big part of it. A bigger part is commission. If that's the only way someone gets paid they're going to sell you whatever they can so they can make their own mortgage payment. .

Commission or not, nobody forces your hand to sign. In fact speaking of accountability, more people should have performance-based pay structures.

Originally Posted by phobiaphobe

Commission or not, nobody forces your hand to sign. In fact speaking of accountability, more people should have performance-based pay structures.

Amen to that.

Just in case nobody noticed, yesterday Fortis Bank was "rescued" by the Belgian government and in the UK Bradford and Bingley by a combination of the UK government and Banco Santander. Wachovia was bought by Citi. Glitnir Bank, the 3rd largest in Iceland, was nationalised and Hypo Real Estate in Germany rescued by a consortium of German banks.

Let's wait for today's toll.

OK, the day starts with Dexia, a bank that lends to local authorities, being given Euros 6bn in new capital by the governments of Belgium and France; and the Irish government guaranteeing all Irish banks' deposits and loans for two years.

http://www.bloomberg.com/apps/news?p...o&refer=europe

Dollar markets outside US effectively untradable.

A decent rally going on in the stock markets as people assume the bad news is sufficent to get Congress passing some version of the package. The Euro declines as bank failures spread to Europe. Coming down the pipeline for early October is the Credit Default Swap auction:

FT.com / Capital markets - Derivatives market faces biggest test

Originally Posted by oldfogey

A decent rally going on in the stock markets as people assume the bad news is sufficent to get Congress passing some version of the package. The Euro declines as bank failures spread to Europe. Coming down the pipeline for early October is the Credit Default Swap auction:

FT.com / Capital markets - Derivatives market faces biggest test

Keep it up OF, nice to have the commentary from an expert on your side.

YouTube - Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis

Sorry - the spectacle of a representative from Louisiana bitching with a straight face about how government money has to be treated with accountability after Katrina just reset my irony meter
.

It seems to me that there is a recent dangerous tendency by partisans of all stripes to blame this whole financial mess on anybody but themselves, which is typical.

But when it comes to blaming poor minorities who reached for "mortgages they couldn't afford while banks were forced to lend to them against their will, and Rock Financial was forced to do all those radio ads targeted at urban audiences saying that 'your credit history doesn't matter, they could construct a mortgage that would fit your needs'", that's over the line.

Google Michelle Bachman from Minnesota, the apparent spokesmodel for this crap. I remember her from the GOP convention - she looked like she had a fucking lobotomy or got into Rush's oxycontin supply.

And by the way, I don't know if that link has a political slant or not, you should ALWAYS read other sources.

I know hard working, responsible people who (inadvisably, in my view) kept their failing businesses alive by taking risky second and third mortgages on their homes, only to become insolvent when the housing slump reduced their equity, and they couldn't take the normal option of selling the home and paying a large portion of their debt because of the same housing crisis, exacerbated by the loss of jobs due to a fucking do-nothing federal government which will not advocate in any meaningful sense for American manufacturing.

I doubt that 700 billiion dollars of toxic worldwide debt is substantially comprised of poor people's houses. Were there no greedy fuck yuppies in McMansions who got foreclosed? There were in my neck of the woods.Why are they not being blamed with such righteous anger?

This is such utter bullshit bordering on racial scapegoating that it is beyond embarrassing, it is infuriating. And there are plenty of simpletons ready to hear it. .

Listen. When either party tries to explain this, remember that thery are obfuscating their own culpability and lying through their teeth. The Republicans shed controls, and they fucked up. Democrats shed controls, and they fucked up. Period. Got it?

You are not going to get to the truth of a complex problem by listening to a partisan radio asshole, or getting it second hand through a blogger.

Do some fucking research, people.

A quiet day today, waiting for US politicians. UBS makes 2,000 redundant; Xstrata calls off its $9bn bid for Lonmin because of an inability to finance the bid; Iceland's credit rating declines after yesterday's bank nationalisation and the Icelandic currency drops 11% this week, 25% in Q3; bank debt spreads widen further; the US money supply is finally showing that the taps have been turned on after 18 months of tightness.

Edit: UniCredit, Italy's biggest bank and the owner of Germany's HVB Group, will spin off real-estate holdings to strengthen its finances after the shares tumbled 24% in three days. Jefferson County, Alabama, won't make an $83.5 million payment on some of its $3.2 billion of sewer bonds, as it continues to seek more time to negotiate an end to the debt crisis that has pushed it close to bankruptcy.

Originally Posted by oldfogey

Jefferson County, Alabama, won't make an $83.5 million payment on some of its $3.2 billion of sewer bonds, as it continues to seek more time to negotiate an end to the debt crisis that has pushed it close to bankruptcy.

Unfortunately there's going to be a lot of that, as most of those infrastructure bonds were taken out in the expectation of development that was planned and is now shitcanned... Don't ask me how I know.

The B'ham thing has been brewing for a while now and they are likely just using the current crisis as an opportunity. Alabama is actually still doing fairly well and was only lightly hit by the foreclosures compared to most other states. Jefferson county (location of B'ham) has a long history of mismanagement and corruption.

I agree the flip this house crowd and extremely leveraged yuppies are ALSO to blame CBRVFR. Though I would think most of the subprime are either less affluent folks or the house flipping morons. Reread your own post on never blaming themselves I think you will find there is a variety of causes but most can be accounted for by greed and over leveraged people (most of the over leveraged folks were loaned to by greedy lenders).

Originally Posted by CBRVFR

Do some fucking research, people.

OK, in my research I have unearthed the problem...testosterone!

Minyanville - Market Commentary, Investing Ideas, Global Finance, The Economy



Geez.

I've been thinking about what causes these situations quite a bit lately, even doing some research, and personally feel "the problem" is simply capitalism.

Capitalism, like democracy, is the worst system except all those others that came before it. The inevitable boom/bust cycles IMO are the number one problem, much moreso than income disparity, as the busts really hurt the poor and the middle class the most. Paradoxically, the booms and busts also may even be necessary for a capitalistic system.

Government regulation is what we use to try and moderate it's excesses, but the same reason socialism/communism doesn't work all that well, its inefficiency, is why government regulation will always lag "situations" in the market. Sorry, a government regulator is never going to outthink a Milken, or Enron or...that's why the regulator isn't out there getting filthy rich!

I think the best the government can do is try and regulate correctly, but also keep itself solvent, so it can save us from ourselves when scenarios like the current one arise.

Originally Posted by luvtolean

...

I've been thinking about what causes these situations quite a bit lately, even doing some research, and personally feel "the problem" is simply capitalism.

I believe that a lot of it can be traced back to a declining US Dollar... which means you'd have to explore the reasons why the Dollar shit the bed.

Why did property values go down? Less demand?

Why did demand go down? Fewer jobs, lower income?

Why did people lose their jobs?

These are just my thoughts... I have zero fucking research and I don't listen to partisan talk radio assholes.

Easy not enough SheepOfBlue in office

Badvertising: WaMu Says, "Take A Picture It Lasts Longer..."

Wall Street Journal: Conservatives blaming the victims

Just imagine the flights of fancy that the theory of borrower malevolence and Wall Street victimization requires conservatives to take: All these no-account folks, you see, got together and forced investment banks to engineer subprime mortgages into highly leveraged securities. Then they tricked all manner of hedge funds and pension funds and financial institutions into buying these lousy products. Just for good measure, these struggling homeowners then persuaded bond-rating agencies to misrepresent the risk associated with these securities.


Now imagine what such a fantastic scheme, if true, would mean for capitalism itself. This economic system, glorified by all, dominates the globe today, bidding prices up and down, forcing entire nations to change their ways to better suit its needs, and yet it is so fragile that when challenged by the weakest members of society and a handful of community organizers it simply crumbles. Thank goodness the Soviets never figured this out.

The US manufacturing ISM fell to 43.5 in September, the lowest since October 2001 and much lower than the expected 49.5: both pricing and volumes declined sharply. Ford's US sales fell 34% last month with F-series falling 42%. The UK's equivalent PMI indicators, incidentally, are the lowest on record for a series which began in the early 90's and real wage growth is negative and falling.

The Senate's vote has helped markets, but they're still holding their breath until the House vote. EU governments are arguing about the Irish two-year blanket guarantee which clearly affects competition among Euro zone banks for deposits. Anti (anglo-saxon) capitalist feeling grows among the social democrats and bureaucrats in power in the Euro zone.

The sage of Omaha lends GE $3bn in preferred stock with an equity option. There is more talk of suspending mark-to-market accounting for financials.

Originally Posted by luvtolean

I've been thinking about what causes these situations quite a bit lately, even doing some research, and personally feel "the problem" is simply capitalism.

Capitalism, like democracy, is the worst system except all those others that came before it. The inevitable boom/bust cycles IMO are the number one problem, much moreso than income disparity, as the busts really hurt the poor and the middle class the most. Paradoxically, the booms and busts also may even be necessary for a capitalistic system.

Government regulation is what we use to try and moderate it's excesses, but the same reason socialism/communism doesn't work all that well, its inefficiency, is why government regulation will always lag "situations" in the market. Sorry, a government regulator is never going to outthink a Milken, or Enron or...that's why the regulator isn't out there getting filthy rich!

I think the best the government can do is try and regulate correctly, but also keep itself solvent, so it can save us from ourselves when scenarios like the current one arise.

Amen