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Old 09-30-2008, 11:48 PM   #101
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I never understood how people could say this was a result of greed. To me, this was a case of everyone doing their best jobs to play their part in the system: get themselves rewarded for making money for shareholders. The problem was the system itself: too much incentive to play loose and fast, not enough incentive to do the responsible things (like not writing insurance you can't cover).
Long term we've got to transform the market to enforce responsibility, through regulation or whatever means are necessary. Having faith in corporations and their employees to act responsibly, and then getting surprised when they act greedy, is not going to prevent these problems in the future.
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Old 09-30-2008, 11:53 PM   #102
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Originally Posted by samclem View Post
I also don't think it was "the majority," but even if it was, even if it was 95%--why would we want to decouple irresponsible behavior from the natural result of that behavior? Let the folks who had the party pay the bar tab. Yes, there will be innocent people hurt (e.g. those who work for companies which have not managed their accounts so as to do without short-term lending). This is what is known in technical terms as "bad luck." And there's plenty of it throughout life.

If we subsidize irresponsible behavior, we'll get more of it in the future. The bailout bill is too expensive, and it doesn't address the root cause of the problem (mortgages that don't reflect the true value of the underlying homes in the "natural state" where lenders charge real rates for their loans based on real risk of non-payment). The market is the only true fix to this problem, and the sooner we let things adjust, the sooner the pain will be over.
While there are folks out there who are in a tight spot and genuinely unable to pay their mortges, I am afraid that any bailout will encourage a lot of others to jump on the bandwagon-The "Why should I pay if my neighbor doesn't have to" mentality. We are already seeing people walk away from their mortgages due to declining home values- not because they cannot afford the payments, but because their home values have declined due to short sales, etc. from others defaulting.
If people think that Uncle Sam is going to step in and make it OK, then we will see an marked escalation in mortgage defaults IMO- nothing like free cheese to bring out the rats.

People should be held accountable for their own financial decisions, and the millions of us who played by the rules should not be subsidizing those who cannot, did not, or will not meet their financial obligations. Expecting the taxpaying public to clean up this mess is infuriating. The financial institutions and Wall Street should shoulder the burden; they created and profited from this fiasco.

The stock market drops 775 on bad news and then and then recovers almost 500 the next day without a bailout? A trillion-dollar upswing in one day? Appears to me that the day 1 downturn was over-reaction, with a market correction on day 2. IMO, The market can and will continue to sort this out without a handout.

Tar and feathers and a free ride out of DC for anyone who votes for this bailout.
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Old 10-01-2008, 12:10 AM   #103
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Originally Posted by samclem View Post
I also don't think it was "the majority," but even if it was, even if it was 95%--why would we want to decouple irresponsible behavior from the natural result of that behavior? Let the folks who had the party pay the bar tab. Yes, there will be innocent people hurt (e.g. those who work for companies which have not managed their accounts so as to do without short-term lending). This is what is known in technical terms as "bad luck." And there's plenty of it throughout life.

If we subsidize irresponsible behavior, we'll get more of it in the future. The bailout bill is too expensive, and it doesn't address the root cause of the problem (mortgages that don't reflect the true value of the underlying homes in the "natural state" where lenders charge real rates for their loans based on real risk of non-payment). The market is the only true fix to this problem, and the sooner we let things adjust, the sooner the pain will be over.
I don't know where you read in my post that I think we should subsidize irresponsible behavior. :confused:

Quite the contrary.
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Old 10-01-2008, 12:14 AM   #104
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Heard a statistic from a talking head on the news that 94% of residential mortgages in the US are current in their payments - that's not a majority.

Seems to me by bundling the mortgages of the "complicit" 6% together with the rest of us the financial industry has socialized the complicity.

(Note - not "defensive" - just strongly disagree)
I should have been more precise that I'm referring to the total debt fest (orgy, dare I say ) that's been going on, not just the housing bubble and mortgage cr@p.

That's the real problem here.
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Old 10-01-2008, 08:33 AM   #105
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I don't know where you read in my post that I think we should subsidize irresponsible behavior. :confused:

Quite the contrary.
Sorry. I interpreted your posts as justifying and/or rationalizing the excesses in the mortgage and debt game (paraphrase: everyone is doing it or has done it, it is hard to come down against it now).
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Old 10-01-2008, 10:34 AM   #106
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Two years ago we sold our home and moved to our retirement home. The couple that bought our home had a new baby, both worked, 80% first and 20% second. We made concessions that enabled them to purchase the home. As I looked across the table at signing, I was amazed. My thoughts were 'these people have no business buying this home'. As I don't believe that area of Houston had decreased in value I doubt they are in trouble..... yet.

I think this is a example of what went on. Who was at fault? The Realtor, the mortgage co., the seller, the buyer? I guess, for me, it comes down to the buyer. He worked in Real Estate, both agents knew him. My guess is he has only seen the upside of real estate.

On the other side the Mortgage co./bank has to share some of the blame. Also, the government. The Community Reinvestment Act requires banks to do something to put money into low income areas they service. In many instances the Banks know this is not smart business, however, the law requires it.

We, the 'main street' citizen went along with this. For my part my house sold because he was able to close. We have gone along with liberal government programs that are intended to 'help' a class of society. Now it is time to pay for that 'help', and the politicians of both parties are running for cover, and we are going to pay for the votes they bought!
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