OT - When does a recession become a depression?
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Shmax
New member
I was listening to the radio today, listening to loan officers and bank reps telling about how they're fully prepared to make loans, but the public has been so scared by this political MEDIA BS that there's not a customer to be found. I am so sick of politicians treating this like some freaking free candy holiday instead of the REAL problem they have created. The bill they're shotgunning through our government is literally riddled with frivolous spending and special interest bonuses. This country isn't in nearly as bad of shape as they make it sound to be, but they're certainly forcing it that direction. It's absolutely painful and sickening to watch.
MJAnderson
Premium Member
I really don't understand what the issue is with people who are so against this.
It's not that hard to understand. There are a ton of loans in the US backed by houses. Nobody wants to buy houses because a)the prices are still too high and b) the economy sucks because people borrowed too much money and can't keep spending like there is no tomorrow.
Banks are only allowed to loan out 10x their capital. Banks are also (since 1995 I think) required to mark down their assets down to fair market value. For every dollar their balance sheet decreases it reduces the amount they can lend by $10. Since the mortgage crisis started, banks have written down $99b in the value of their assets. This means they have withdrawn $990billion in lending that was available. All forms of lending are declining. Mortgages, HELOCS, student loans, car loans, and most importantly, business loans. When AT&T finds itself having a hard time finding a bank to give it anything but an overnight loan, things are getting bad.
The government is stepping in and trying to stop the downward spiral of writedowns of assets causing less lending causing more writedowns, etc. They can do two things:
a) they can buy the home of any American who wants to sell. This will free up bank assets and everyone will be flush with cash to help reset the housing market. Now everyone can buy homes from the government they can actually afford and the banks will be relieved of all those mortgages. Or they can,
b) buy the securities backed by the loans from the banks.
"A" would be nice as it would resuce both the banks and the homeowners from their own greed and stupidity. "B" just deals with the banks stupidity. But guess which one can be done overnight versus which one would take months if not years to implement? What's right isn't always what's best.
There is always "C" which is let both the people and the banks fail. They both deserve it.
It's not that hard to understand. There are a ton of loans in the US backed by houses. Nobody wants to buy houses because a)the prices are still too high and b) the economy sucks because people borrowed too much money and can't keep spending like there is no tomorrow.
Banks are only allowed to loan out 10x their capital. Banks are also (since 1995 I think) required to mark down their assets down to fair market value. For every dollar their balance sheet decreases it reduces the amount they can lend by $10. Since the mortgage crisis started, banks have written down $99b in the value of their assets. This means they have withdrawn $990billion in lending that was available. All forms of lending are declining. Mortgages, HELOCS, student loans, car loans, and most importantly, business loans. When AT&T finds itself having a hard time finding a bank to give it anything but an overnight loan, things are getting bad.
The government is stepping in and trying to stop the downward spiral of writedowns of assets causing less lending causing more writedowns, etc. They can do two things:
a) they can buy the home of any American who wants to sell. This will free up bank assets and everyone will be flush with cash to help reset the housing market. Now everyone can buy homes from the government they can actually afford and the banks will be relieved of all those mortgages. Or they can,
b) buy the securities backed by the loans from the banks.
"A" would be nice as it would resuce both the banks and the homeowners from their own greed and stupidity. "B" just deals with the banks stupidity. But guess which one can be done overnight versus which one would take months if not years to implement? What's right isn't always what's best.
There is always "C" which is let both the people and the banks fail. They both deserve it.
Shmax
New member
My main problem with it is this: The very people who instituted programs that directly affected the huge numbers of people "qualifying" for loans are now pretending they can fix it and properly manage the situation. You couple greed up with government policies designed to take away a bank's rights to deny people loans based on true qualifications, and what we're seeing now is exactly what you get. There is no overnight solution to this situation, the options are 1), deal with this situation and suffer short term through the consequences of past mistakes, or 2) throw an astronomical amount of money at it now, kick it down the road a few more years, and suffer longer for it. I'd rather take the medicine now. The great depression proved that kicking the problem down the road a ways will do nothing but prolong the process, and I fear that's what we're about to do.
All that aside, I would feel a lot more comfortable with such a bill if it was taken seriously by the people voting on it. I would feel a whole lot better if instead of using this as an opportunity to benefit from the situation, they stayed focused on the task at hand, instead of business as usual. The power hungry use this, as they do everything else, to slip more special interest funding and kickbacks to their own causes in, and it's nothing less than infuriating.
All that aside, I would feel a lot more comfortable with such a bill if it was taken seriously by the people voting on it. I would feel a whole lot better if instead of using this as an opportunity to benefit from the situation, they stayed focused on the task at hand, instead of business as usual. The power hungry use this, as they do everything else, to slip more special interest funding and kickbacks to their own causes in, and it's nothing less than infuriating.
ronc98
New member
It would be nice for the voting public to actually become educated on the people they are voting for. I do agree that it is not as fun as watching American Idol but we need to get to a point where we are not voting for someone because we hear their bullet points or we see a sign on the road.
For me I am voting for anyone that voted AGAINST the bailout. I certainly wish we had a three or more party system.
For me I am voting for anyone that voted AGAINST the bailout. I certainly wish we had a three or more party system.
Shmax
New member
Amen to that, but we both know it's not going to happen. That's probably more to blame for what goes on in our government than anything else. Most people don't care at all anymore. They watch CSNBC, or Fox, whichever way they tend to lean, for a few minutes here and there then pretend they know what's going on. People today are more concerned with what celebrities are wearing than they are the future of the country. But, at least most of those people don't bother getting to the polls when it's time to vote.
<a href=showthread.php?s=&postid=13471919#post13471919 target=_blank>Originally posted</a> by cward
The whole thing is BS, and that is before the idiotic politicians added in the pork. We need a Terry Tate in the Senate to throw some of them out to the curb.
Think of all the good times. Better have a good health insurance plan.
MJAnderson
Premium Member
So you're going to vote against anyone who voted against this but wish people would become educated on the people they are voting for? "Hello Kettle, it's Pot. You're black. "
ronc98
New member
Seriously? That is what you come up with? Pot? Part of education is seeing how they vote in the on past issues that are important to me. I am completely against the bill. Sounds like a decent reason to me. Could just be me though.
Nice one though. You really got me with that one. WOW
MJAnderson
Premium Member
So you make fun of American Idol type voting then state that you're going to decide to vote for someone based on one decision? Great way to chose the leaders of our country. Very in depth and educated decision making process. Forget Iraq. Forget civil liberties. forget fiscal policy. forget real issues. Punish those people who were in Congress and had to vote for a crappy bill because of the poor decisions in government that have been going on since Regan reagarding oversight and understanding the market. Yea, they deserve to be punished for chosing the lesser of two evils.
I was listening to the radio last week and they interviewed some people in southern Ohio who decided to vote for Palin because she was a hunter and understood the needs of hunters in the US and because of that they were hoping she might end up being president one day so that hunters could finally get the representation they deserved...You just placed yourself in that group.
ronc98
New member
Fair enough, as much as I would like to say you are wrong I can not you are certainly right and perhaps it was a brash stupid statement.
I just simply do not buy that bill needed to be passed to prevent meltdown. We are going to meltdown anyway.
The problem with the current system is that the person that shares my views on the bailout, pulling out of Iraq, rolling back the patriot act(freaking Joke) and is actually a fiscal conservative would be a wasted vote. It would also be a wasted vote to vote for everyone against the bloated bailout bill. I think the vote in november is going to be very similar to voting for the bailout bill. Either choice is crap.
You win that one. "crap I hate when that happens"
I just simply do not buy that bill needed to be passed to prevent meltdown. We are going to meltdown anyway.
The problem with the current system is that the person that shares my views on the bailout, pulling out of Iraq, rolling back the patriot act(freaking Joke) and is actually a fiscal conservative would be a wasted vote. It would also be a wasted vote to vote for everyone against the bloated bailout bill. I think the vote in november is going to be very similar to voting for the bailout bill. Either choice is crap.
You win that one. "crap I hate when that happens"
MJAnderson
Premium Member
Even if you don't vote the same way that I do or believe in the same things that I believe in it's great to see someone who hasn't turned into a single issue voter. After hearing about the hunters or the old lady in PA who was voting against Obama because her pastor told her he was the anti-christ this country needs all the well informed thoughtful voters it can find.
Yay! Does this mean I can move into anyone's house that will still be foreclosing?
It's a sad truth but at least we will still have credit to borrow. Now we haven't solved how to help the homeowner. How many billions do you think that will cost?
