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Greed
Old 12-07-2007, 04:46 PM   #181
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Greed

Greedy borrowers
Greedy lenders
Greedy government
Greedy builders
Greedy businessmen


Greedy me

Did I leave anyone out?
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Old 12-07-2007, 04:51 PM   #182
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Funny, and all these selfish people are all employed!!
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Old 12-07-2007, 04:52 PM   #183
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Originally Posted by barbarus View Post
Greedy borrowers
Greedy lenders
Greedy government
Greedy builders
Greedy businessmen


Greedy me

Did I leave anyone out?

"Its all about money the rest is just conversation"
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Old 12-07-2007, 04:54 PM   #184
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Oh the bank will probably take it, and make up for it by charging more to the low-risk customers like me.
I think that remains to be seen. Stricter requirements will mean fewer borrowers. Rates are partially determined in the marketplace. If there are few enough people qualifying to borrow, rates could actually go down.

Or, just pay cash. Your house now becomes a disproportionate percentage of your total net worth in some cases, say while you're young, but you avoid sky high interest rates.

Edited to add: the "just pay cash" comment is intended for members of this board, most of whom I'm guessing, could pay cash if necessary and they really wanted their own home.
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Old 12-07-2007, 04:56 PM   #185
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but what is rocket surgery?

Perhaps you wanted to pick either rocket science or brain surgery, but couldn't decide.
It's a euphemism (isn't that like a small Tuba?) that I heard recently. I really liked it - I thought the guy slipped up too, but it was a purposeful mangling of the two terms. Kind of like a yogi-ism.

'Brain Science' just does not sound as good, IMO.

I should google it, see if I can find a source...

Nice to see you were paying attention!

-ERD50

PS - wow -82,400 hits for 'rocket surgery' - nice Etymological NOTE here

"rocket surgery" definition from Double-Tongued Dictionary
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Old 12-08-2007, 09:00 AM   #186
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Excerpts from Bend Bulletin Editorial 12-7-07

"For years, President Bush has touted the value of an "ownership society" that emphasizes personal responsibility, among other things. To that end, we wonder if his administration's plan to freeze hundreds of thousands of home mortgages was the sort of policy he had in mind."

"Irresponsible lending institutions deserve much of the credit for today's mortgage mess and they deserve to suffer whatever consequences the markets hands to them. In their folly, however, they had millions of eager partners: average citizens who were willing to borrow money on potentially dangerous terms. In part because of the dip in the housing market, many of these people now risk defaulting of their loans and losing their homes. That is unfortunate. But forestalling the predictable consequences of bad decisions does not justify the plan Treasury Secretary Henry Paulson's is pushing on the lending industry..."

"Even so, many holders of risky mortgages would lose their homes. That's sad, but it comes with living in a society that expects adults to make responsible decisions or accept the consequences. And speaking of responsible decisions, the Bush freeze is incredibly unfair to the millions of Americans who did not borrow irresponsibly during the recent housing craze. They didn't buy more house than they could afford. They didn't gamble on an ever-escalating housing market. And their reward is...seeing irresponsible people rewarded for their irresponsibility."

"Assuming the frozen mortgages reduce revenue for lending institutions, meanwhile, one has to wonder whether they'll seek to pass the cost along to the next batch of responsible mortgage holders. That sure seems fair, doesn't it?"

"Finally, minimizing a correction in housing prices-which the Bush freeze intimately will do-hurts other responsible citizens who would like to become homeowners but can't afford to now. In retrospect, perhaps they should have secured risky loans when they had the chance, then counted on the government to reward their shortsightedness. It's a pity they weren't aware of the president's commitment to a "loanership society."
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Old 12-08-2007, 09:36 AM   #187
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It's a euphemism (isn't that like a small Tuba?) . . .
PS - wow -82,400 hits for 'rocket surgery' . . .
It's "oxymoron," I think. Hey--I'm as bad as you are. . . It's when I start trying to use sports metaphors around my male colleagues that I really get into trouble.
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Old 12-08-2007, 10:38 AM   #188
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A little touch of how defaulted mortgages will effect everyone:

States' investment strategy scrutinized

Florida officials disclosed their $27 billion investment pool had about $2 billion sunk into subprime-tainted debt -- and $725 million of that had already defaulted. Local governments rushed to withdraw about $13 billion from the battered fund, and there are worries similar runs might happen elsewhere.
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Old 12-08-2007, 12:29 PM   #189
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Yeah, I alluded to the muni mess in the muni thread. Shades of Orange County, but I think it'll be worse this time since it's so widespread. Add to that the fact that most municipalities get revenue as a function of property values. And finanlly consider that many local economies are pretty dependent on the housing market for jobs.

If nothing else, I think we'll start seeing higher muni bond yields pretty soon.
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Old 12-08-2007, 01:14 PM   #190
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Add to that the fact that most municipalities get revenue as a function of property values.
I don't know how other municipalities do it, but our property taxes do not go up based on property values alone. The taxes are fixed for the year, and are allocated across all properties. If everyone's home price doubled, the rate would be cut in half (all else being equal) so taxes would be the same $ amount for all. Same if home prices halved.

-ERD50
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Old 12-10-2007, 09:37 AM   #191
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This link will take you to interviews with George Soros, Paul Volcker, William Seidman and Robert Shiller on their thoughts of the mortgage crisis.

Interview Excerpts: Volcker, Soros, Others Weigh In on Mortgage Crisis - WSJ.com
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Old 12-10-2007, 09:42 AM   #192
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"U.S. Mortgage Crisis Rivals S&L Meltdown" is very interesting read.

U.S. Mortgage Crisis Rivals S&L Meltdown - WSJ.com
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Old 12-10-2007, 09:42 AM   #193
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And speaking of responsible decisions, the Bush freeze is incredibly unfair to the millions of Americans who did not borrow irresponsibly during the recent housing craze. They didn't buy more house than they could afford. And their reward is...seeing irresponsible people rewarded for their irresponsibility."

"Assuming the frozen mortgages reduce revenue for lending institutions, meanwhile, one has to wonder whether they'll seek to pass the cost along to the next batch of responsible mortgage holders. That sure seems fair, doesn't it?"
"
I agree especially with the excerpts above....which I partly stated in my original post.
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Old 12-10-2007, 09:45 AM   #194
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I don't know how other municipalities do it, but our property taxes do not go up based on property values alone. The taxes are fixed for the year, and are allocated across all properties. If everyone's home price doubled, the rate would be cut in half (all else being equal) so taxes would be the same $ amount for all. Same if home prices halved.

-ERD50
I live in Indiana, and we just had a huge increase in property taxes based strictly on a fresh appraisal that resulted in higher home values. Nothing else was changed.

The increase was so large that 10,000 citizens picketed the Governor's house, and they eventually revised all the calculations temporarily to give relief to the taxpayers. It was a real mess, and now the Governor has proposed an increase in the sales tax of 1% to make up for the lost revenue of not being able to increase property taxes. It's a huge shell game that started when Indiana eliminated the business inventory tax a few years ago without (IMO) fully thinking through the ramifications.

Dave
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Old 12-10-2007, 09:46 AM   #195
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Originally Posted by ERD50 View Post
It's a euphemism (isn't that like a small Tuba?) that I heard recently. I really liked it - I thought the guy slipped up too, but it was a purposeful mangling of the two terms. Kind of like a yogi-ism.

'Brain Science' just does not sound as good, IMO.

I should google it, see if I can find a source...

Nice to see you were paying attention!

-ERD50

PS - wow -82,400 hits for 'rocket surgery' - nice Etymological NOTE here

"rocket surgery" definition from Double-Tongued Dictionary
Learn something new every day ERD....I'd not seen that used before.
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Old 12-10-2007, 10:01 AM   #196
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I live in Indiana, and we just had a huge increase in property taxes based strictly on a fresh appraisal that resulted in higher home values. Nothing else was changed.

The increase was so large that 10,000 citizens picketed the Governor's house, and they eventually revised all the calculations temporarily to give relief to the taxpayers. It was a real mess, and now the Governor has proposed an increase in the sales tax of 1% to make up for the lost revenue of not being able to increase property taxes. It's a huge shell game that started when Indiana eliminated the business inventory tax a few years ago without (IMO) fully thinking through the ramifications.

Dave
Like I said, it varies by municipality. One thing I've seen - they often cycle the appraisals, you may get reappraised one year, the area next to you gets reappraised 3 years from now, etc.

So, if you get appraised at the peak of a boom, you get hit until the next appraisal, unless they decide to adjust. I think that happened in Chicago this year, and maybe that is what happened to you.

My appraisal went up 20% this year (!), but from my research, it looks like all my neighbors went up as much, and they do use a formula here to distribute the tax burden, so I don't see any sense in asking for a review - they might raise it!

-ERD50
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Old 12-10-2007, 11:49 AM   #197
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This writer editorializes in the SF Chronicle that the subprime freeze is just a scam to keep investors from suing US Banks to make good on the worthless paper they sold.

"The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process."
MORTGAGE MELTDOWN / Interest rate 'freeze' - the real story is fraud / Bankers pay lip service to families while scurrying to avert suits, prison
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Old 12-10-2007, 01:31 PM   #198
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Word coming in just now that a Bank of America institutional "money market-like" fund has just been frozen due to "subprime" issues. Don't have the time to find the link just now, but will come back later and post it.
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Old 12-10-2007, 05:32 PM   #199
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Looks like some of the members of this forum are finally starting to "get it".
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Old 12-10-2007, 06:53 PM   #200
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This writer editorializes in the SF Chronicle that the subprime freeze is just a scam to keep investors from suing US Banks to make good on the worthless paper they sold.

"The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process."
MORTGAGE MELTDOWN / Interest rate 'freeze' - the real story is fraud / Bankers pay lip service to families while scurrying to avert suits, prison
This article does sound very plausible. If it is indeed true, I hope those involved go to prison, because they certainly deserve it. Secret meetings do tend to raise suspicion. I've often thought that America should be ashamed of our loan originators for selling mortgage securities rated AAA around the world, when the truth was that many were nearly worthless. Whether we like it or not, this reflects negatively on all of us. So far, home prices have dropped an average of 10% nationally over the past year, if they continue this downward spiral to 30% (which today's WSJ reported as a possibility) someone needs to pay with hard time for their criminal misrepresentation.
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