and you wonder why our country is broke...

[movie zombie]

once upon a time there were really only local and/or regional banks. those banks made loans AND HELD THE PAPER THEMSELVES. it was a different world. bankers knew the borrowers because they were local. also, loans didn't go for much more than five years. they did not bundle loans for resale on the international market.

even now most local banks [and credit unions] are more fiscally responsible. most did not make those fancy loans. most did not loan to everyone. most did not push those creative loan products as much as others.....and most did not bundle and sell loans but kept them "in-house". their interest rates were not as low and they had better loan criteria. still there were some that got caught up in the frenzy to make "easy" $ and because they were not "too big to fail" they were left flapping in the wind. they gambled and they lost so, no, i do not feel sorry even for them.

 

[Dancing Fire]

I can see the gist of DF's point; the GSA is specifically charged with saving the government money. Their job is to see that our money is spent wisely. Throwing an $800,000 party in the middle of a recession is ridiculous, unconscionable, and insensitive. It goes against their mission.

I think the head of the GSA, Martha Something, deserved to get canned.

I think DF's point is that all the government agencies run around frittering away money on nothing, then that is plain wrong.

i don't mind writing a check to uncle Sam but i wanted them to spend my hard earned money wisely.

 

[movie zombie]

i don't mind writing a check to uncle Sam but i wanted them to spend my hard earned money wisely.

agree with you 100%, DF!

but i bet we'd disagree a lot as to what constitutes "wisely"..........still, there'd be some agreement, too.

 

[Dancing Fire]

i don't mind writing a check to uncle Sam but i wanted them to spend my hard earned money wisely.

agree with you 100%, DF!

but i bet we'd disagree a lot as to what constitutes "wisely"..........still, there'd be some agreement, too.

of course we will disagree, cuz you "like most PSers" are too liberal..

 

[ksinger]

once upon a time there were really only local and/or regional banks. those banks made loans AND HELD THE PAPER THEMSELVES. it was a different world. bankers knew the borrowers because they were local. also, loans didn't go for much more than five years. they did not bundle loans for resale on the international market.

even now most local banks [and credit unions] are more fiscally responsible. most did not make those fancy loans. most did not loan to everyone. most did not push those creative loan products as much as others.....and most did not bundle and sell loans but kept them "in-house". their interest rates were not as low and they had better loan criteria. still there were some that got caught up in the frenzy to make "easy" $ and because they were not "too big to fail" they were left flapping in the wind. they gambled and they lost so, no, i do not feel sorry even for them.

Yes. When I got my loan back in '98 - back before the stupidity began - the credit union that originated my note, put me under a microscope financially. They did this thing called "due diligence". They had these other things called "standards". And while they did approve me for more than *I* thought I could afford, in retrospect it was hardly out of a reasonable range, and I could have done even the top end of what they approved me for. Now, that said, they did immediately sell my note, and did not hold onto it, and I think most of the problems with banks making bad loans could have been avoided if banks had been required to hold onto a defined percentage of the loans they originated, for a reasonable length of time - say, until the ARM or whatever balloon payment they had, kicked in? The banks would have have had a horse in the race and would have been a damn sight more careful. As it was though, they screwed the entire country to the wall. Anyway, I know a guy who is on that credit union governance board currently, and while they are in reasonable good shape, even they are now desperate to make good loans and HOLD them on their books. My how times change....

 

[ksinger]

i don't mind writing a check to uncle Sam but i wanted them to spend my hard earned money wisely.

agree with you 100%, DF!

but i bet we'd disagree a lot as to what constitutes "wisely"..........still, there'd be some agreement, too.

of course we will disagree, cuz you "like most PSers" are too liberal..

You mean "liberal" in the sense of generous? Like the banks, which were overly-generous when making fiscally irresponsible loans?
Or conservative and cautious like me? Who took out a tiny loan that I could actually afford, and is paying off early?

YOU are the one who continues to label and divide. People and situations are not so easy to pigeonhole, although I'm sure that won't stop you from dividing everything in life into 2 camps. This issue has little to do with sides of a political fence, and everything to do with pure greed. This situation is a perfect demonstration of why gutting Glass-Steagall and deregulating the financial world, was a really bad idea.

 

[Dancing Fire]

[quote="ksinger|

You mean "liberal" in the sense of generous? Like the banks, which were overly-generous when making fiscally irresponsible loans?
Or conservative and cautious like me? Who took out a tiny loan that I could actually afford, and is paying off early?

[/quote]


Karen
i have always said that both side are at fault on these bad loans,banks were overly generous and home buyers borrowed way more than they can afford.Karen,if everyone was conservative and cautious like you we wouldn't be in this mess.

 

[fleur-de-lis]

no, sell for what they were worth in the first place. banks aren't losing $. they got the down payment $ [yes many did put $ down], some monthly payments [in a friend's case 12 years worth of payments], PMI insurance [paid for by the buyer who didn't have 20% to put down], loan servicing fees, $ made when selling the original loan on the market, and in some instances took back property they don't actually own as they can't provide documentation. additionally, they got taxpayer $. another transfer of wealth into their hands. and to top it off they're sitting on a lot of that taxpayer $ and not making loans or refi's as they said they would to get that $. no, no pity for the banker, either.

but don't forget many of these foreclosed homes only worth 60% of its purchased price,plus most of these people probably haven't made a payment for at least 6-9 months.

say i bought a $500k home in 2006 with a 5% d/p. i borrowed $475K and now that same house only worth $275K so i decided to walk away.i don't think my bank would be very happy.

As a counterpoint, "the bank" had probably been very happy to receive the interest of a JUMBO mortgage rate of 7-8%, or around ~$35,000/year in interest, for those 6 years. That alone accounts for $220,000-- which is MORE than the decline in your example (475K less 275K). There probably were a few thousand in loan origination costs at the time of purchase too. Ka-ching!

Of course, in the modern era, "the bank" probably sold it in a bundle and received a commission for selling the loan (more $$$) to Freddie, Fannie, or someone else. "The bank", i.e. the entity who lent you the $475K, made their money quickly, got out, and no longer has an interest in your loan-- so your hypothetical default doesn't make them happy or unhappy.

 

[Dancing Fire]

why is Neely not fired?..

 

[Deia]

It. is. not. broke.

We would have to have a whole thread and a very complicated one to discuss this. And wow, that would take a lot of work on my part.

Putting aside even the concept of 'debt' as it relates to a sovereign government, we have a fiat money system. "Money' is printed or created electronically.

There is no shortage of it. We can pay our 'debts' forever.

I'll give some links if anyone wants to read about this stuff, but trust me, it is complicated and the truth has no resemblance to what the corporate media and major political parties are telling us.

I don't have a hot tub, but I wish I could go swimming now. I would find it very relaxing and it wouldn't cost a dime. But you can't go swimming after dark because of sharks.

BTW, you should do a photo spread of that beautiful watch. You're holding out on us!

Money is created out of thin air... The whole system is BS. Hooray for the Zeitgeist Movement

 

[Imdanny]

It. is. not. broke.

We would have to have a whole thread and a very complicated one to discuss this. And wow, that would take a lot of work on my part.

Putting aside even the concept of 'debt' as it relates to a sovereign government, we have a fiat money system. "Money' is printed or created electronically.

There is no shortage of it. We can pay our 'debts' forever.

I'll give some links if anyone wants to read about this stuff, but trust me, it is complicated and the truth has no resemblance to what the corporate media and major political parties are telling us.

I don't have a hot tub, but I wish I could go swimming now. I would find it very relaxing and it wouldn't cost a dime. But you can't go swimming after dark because of sharks.

BTW, you should do a photo spread of that beautiful watch. You're holding out on us!

Money is created out of thin air... The whole system is BS. Hooray for the Zeitgeist Movement

Thank you. LOL!

What I'm talking about is called Modern Monetary Theory. It's not something I made up and I can't take credit for it, really.

Here's a Washington Post article that deigned to talk about it. It's starts with a mention of James Gailbrath, the best (!!!) economist in the US IMO.

http://www.washingtonpost.com/business/modern-monetary-theory-is-an-unconventional-take-on-economic-strategy/2012/02/15/gIQAR8uPMR_story.html

 

[Deia]

I guess the multiple applauding smilies were a bit much haha, but I work in a Bank so I can't exactly voice my opinion on this subject at all at work, for obvious reasons ... heh. I have to pay my bills and unless I want to clean dishes in order to pay for them... anyway, I get excited when I see it mentioned elsewhere! Thanks for the link Danny, gonna look into this now during my lunch break

 

[Imdanny]

I guess the multiple applauding smilies were a bit much haha, but I work in a Bank so I can't exactly voice my opinion on this subject at all at work, for obvious reasons ... heh. I have to pay my bills and unless I want to clean dishes in order to pay for them... anyway, I get excited when I see it mentioned elsewhere! Thanks for the link Danny, gonna look into this now during my lunch break

Deia, you're welcome!

 

[partgypsy]

Great post, iLander. These things (GSA, Secret Service scandals etc) make me SO ANGRY because I work for the government and they are so far from the reality for 99.99% of the workforce. A few bad apples making all the rest of us look bad. Want to know what the vast majority of us deal with? At my former agency, the budget for office supplies ran out before Congress allocated any more money. We had no paper. The office manager was bartering with other field offices to exchange things we had that they needed, for things we needed but couldn't buy -- a box of mamilla envelopes for a couple reams of paper, or pens for rubber bands. It got so bad that the boss actually bought a box of paper on her own dime so we could receive faxes. Things are a little better at my new agency, but not much...our paralegal spent months sitting in a chair held together by duct tape because we didn't have funding to order her a new one. THAT's what really happens in the government on a day-to-day basis. So yes, this idiotic GSA thing does really piss me off on many levels, but don't kid yourself that it's a normal occurrence or generally accepted practice (and as an aside, I have no idea how it got approved because anything budget-related is so tightly controlled and we have to account for every cent spent, through multiple levels of review).

ditto. Where we work, we are being asked to cut 5% of the budget, while serving the same or more patients (I work for the VA). There are many targets as an agency for patient care we have to hit, so we can't sacrifice quality. And I think that is the trend in most agencies, that money is getting tighter. Maybe after asking other agencies to do this, they felt they were saving so much money they deserved a pat on the back?