Where is the morality??

[Beacon]

This happened today:

I had lunch with a friend who is closing one corporation and starting another. He met yesterday with new lawyer. My friend has $18K of company credit card debt outstanding on the old corporation. This new lawyer told him not to pay it, but instead let him "negotiate it" with the bank and try to get 50 cents on the dollar. His old corporation is not in bankruptcy, it is just being restarted with new partners and some new businesses.

My friend and his partners do not have financial difficulties to pay this bill and til this meeting had every intention to pay it. But now my friend thinks maybe the lawyer is "smart".

I am so pissed off!! What is wrong with people? They think it is just fine to "walk away", "mail in the keys", send the lawyer to "renegotiate".

Then to top it off, my friend related the sad story of a woman we both know who holds a bunch of US Bancorp stock, and USB has just cut the dividend to almost nothing due to loan losses. This woman was using the dividend to fund her child''s private education, which is 15K per year. Now she may not be able to keep the girl in that school. It just happened this week.

My friend feels bad for her. But he does not seem to connect the idea that if people "walk away" from their obligations then they are harming society.

It makes me so mad!!

What is going on in America that people think they are "smart" to cheat? Do they not notice the harm that is happening?

 

[Dancing Fire]

just don''t understand people these days.

 

[tradergirl]

I imagine that a lot of people feel a lot less obligation to kill themselves to pay off these debts when they see every sleazebucket at the Washington trough getting bailed out and getting money for nothing. Not that that makes it right but we've become a "easy solution" bunch unable to delay gratification at all.

Honestly, I don't really feel too sorry for your friend who was using dividends to pay for the kids school. All one has had to do for the last 8-9 months was pick up a newspaper and you could see that dividends were being cut everywhere. She should have made contingency plans a long time ago. Again, people want their cake and eat it too. I'd tell her to sell the stock now and pay the tuition but of course they don't want to do that. Usually it's because they don't want to pay the taxes on the gain or the stock price has declined to a point they feel cheated (much like the guy who didn't sell his Compton crack house for 800K in 2005 when his neighbor did but still insists on getting that).

The ones who should really piss you off were the ones who were "buying" a cheaper house across the street in foreclosure and then walking away from their original ones. That loophole is now closed though as they could never get a loan for a second house, but it was quite rampant and reported widely for awhile.

 

[Beacon]

I feel sorry for this woman. She is a film editor and her father was a banker and she inherited that USB stock. Her father had it for decades. She thought it was fine because he told her it was fine.

Obviously she should have had a diversified portfolio but she didn''t know better. Lots of average people do not know better when it comes to investments.

Sell the thing? Hard to figure that. How about holding an equity for years and years and then picking the one three month period when it is on it''s absolute knees and deciding this is the good time to sell. Go broke like that for sure.

 

[steph72276]

Smart and ethical often don't go hand in hand. Would it be smarter for him to quit paying his debt for 6 months at which point the credit card will likely settle with him for pennies on the dollar? Yes. Is it ethical to skip out on your payments when you are capable of making them? No. It was his debt. He should pay it, but credit cards these days will settle because they have seen so many people skip out on paying completely that they will take what they can get. I'm seriously glad I've given up credit cards completely. If I don't have money up front, I don't buy it. If more businesses worked that way, they would be in lots less trouble right now, but people get greedy and try to grow too fast and go into debt to do it too often.

 

[beebrisk]

What morality exactly are you speaking of?

We are living now in a world where moral standards have been tossed aside and replaced by humanistic and relativistic thinking. How then can you expect (or even be disappointed) when people don't act morally?

Without a standard (and by standard I mean an "absolute"--the ideal in terms of which something can be judged) anything goes. Nothing is right and nothing is wrong. Even the most heinous of actions can be justified.

It's a much bigger conversation than can be had here, but this issue is precisely why we live in an age of Enrons, Bernie Madoffs and politicians who sell senate seats.

 

[strmrdr]

Date: 3/9/2009 12:20:17 PM
Author: beebrisk
What morality exactly are you speaking of?


We are living now in a world where moral standards have been tossed aside and replaced by humanistic and relativistic thinking. How then can you expect (or even be disappointed) when people don''t act morally?


Without a standard (and by standard I mean an ''absolute''--the ideal in terms of which something can be judged) anything goes. Nothing is right and nothing is wrong. Even the most heinous of actions can be justified.


It''s a much bigger conversation than can be had here, but this issue is precisely why we live in an age of Enrons, Bernie Madoffs and politicians who sell senate seats.

bingo

 

[Mara]

ditto bee.... everyone is out for themselves... looking out for number one. worry about anyone else? why? that is definitely the mentality where we live and i thought that it was more localized to this area, but i think less and less so. honestly, part of this is why we have been in no rush to bring kids into this world. to me it's all going downhill.

trader said:
The ones who should really piss you off were the ones who were "buying" a cheaper house across the street in foreclosure and then walking away from their original ones. That loophole is now closed though as they could never get a loan for a second house, but it was quite rampant and reported widely for awhile.

when we were buying our house in dec, our bank told us this same thing was rampant a few months before. i was like WHO DOES THAT??? it's appalling. that is why when we bought our new property, and wanted to hold our first property, we had to qualify using both mortgages together as a certain % of income... so that the bank knew we could afford to pay both. i guess they assume less chance to walk away. if we couldn't have paid both, we had to have 30%+ equity in our first house to qualify instead. though i guess the former requirement does not guarantee against those who are ABLE to pay both mortgages, but still would feel free to walk away from the first house if it was under water.

 

[HollyS]

Date: 3/9/2009 12:20:17 PM
Author: beebrisk
What morality exactly are you speaking of?

We are living now in a world where moral standards have been tossed aside and replaced by humanistic and relativistic thinking. How then can you expect (or even be disappointed) when people don''t act morally?

Without a standard (and by standard I mean an ''absolute''--the ideal in terms of which something can be judged) anything goes. Nothing is right and nothing is wrong. Even the most heinous of actions can be justified.

It''s a much bigger conversation than can be had here, but this issue is precisely why we live in an age of Enrons, Bernie Madoffs and politicians who sell senate seats.

Succinctly put, and absolutely correct.

 

[Harriet]

Ethics, as well as prudence, has gone the way of the dodo. I''m trying to shut up in front of those who lived high on the hog at the taxpayer''s expense.

 

[tradergirl]

Beacon, life is full of tough choices. She can get a second job to pay the tuition, tell her kid to work or sell the stock. I don''t think the world owes her any more than that. If she inherited the stock and has a low cost basis, there''s still probably a significant gain (over her "real" cost basis of zero!)

 

[Beacon]

Tg, you don''t have to tell me that the world doesn''t owe her anything. I am the biggest believer in self reliance!

The reason I brought her up was to show that when individuals cheat the system they set up situations that harm other people. Further, they ultimately set up situations that harm themselves. In the end, cheating results in recessions, unemployment and declining asset values - sometimes much worse things.

Google had it right when they stated their basic corporate premise: "First do no evil."

 

[tradergirl]

Speaking of Google, looks like a decent short sale.

 

[cara]

But how is it immoral for a company to hold off on issuing dividends in this economic climate? Its fine to rant on about the lack of morals and ethics in the world, but should a company really continue paying dividends when they are running out of money or should they try to remain solvent and maintain appropriate cash reserves to weather the downturn.

Sorry, but if the woman relying on the dividends wanted a sure thing, she should have been invested somewhat differently. That she was unsophisticated in financial matters or listened to her father (who didn''t anticipate the current meltdown) just makes her like everyone else who is suffering some unfortunate consequences of the financial meltdown they didn''t anticipate.

 

[Beacon]

Date: 3/9/2009 3:55:46 PM
Author: cara
But how is it immoral for a company to hold off on issuing dividends in this economic climate? Its fine to rant on about the lack of morals and ethics in the world, but should a company really continue paying dividends when they are running out of money or should they try to remain solvent and maintain appropriate cash reserves to weather the downturn.

Sorry, but if the woman relying on the dividends wanted a sure thing, she should have been invested somewhat differently. That she was unsophisticated in financial matters or listened to her father (who didn't anticipate the current meltdown) just makes her like everyone else who is suffering some unfortunate consequences of the financial meltdown they didn't anticipate.

It is not immoral at all. But I never said it was immoral for banks not to pay dividends.

What I am saying is that when people cheat banks (or anyone/anything else), they cause harm. This bank stopped paying it's dividend. This hurt the shareholders. This hurts the economy. This causes unemployment.

So it is a chain reaction. People need to stop thinking it is "smart" or "just business" to default on their agreements.

My friend was encouraged by a lawyer to default on his credit card bill. Not because he could not pay, not because of anything other than he could get away with it.

To me that is just plain wrong.

 

[crown1]

Date: 3/9/2009 4:08:14 PM
Author: Beacon

Date: 3/9/2009 3:55:46 PM

Author: cara

But how is it immoral for a company to hold off on issuing dividends in this economic climate? Its fine to rant on about the lack of morals and ethics in the world, but should a company really continue paying dividends when they are running out of money or should they try to remain solvent and maintain appropriate cash reserves to weather the downturn.


Sorry, but if the woman relying on the dividends wanted a sure thing, she should have been invested somewhat differently. That she was unsophisticated in financial matters or listened to her father (who didn''t anticipate the current meltdown) just makes her like everyone else who is suffering some unfortunate consequences of the financial meltdown they didn''t anticipate.

It is not immoral at all. But I never said it was immoral for banks not to pay dividends.


What I am saying is that when people cheat banks (or anyone/anything else), they cause harm. This bank stopped paying it''s dividend. This hurt the shareholders. This hurts the economy. This causes unemployment.


So it is a chain reaction. People need to stop thinking it is ''smart'' or ''just business'' to default on their agreements.


My friend was encouraged by a lawyer to default on his credit card bill. Not because he could not pay, not because of anything other than he could get away with it.


To me that is just plain wrong.

i get you! i agree it is time to stand up for what is right.

 

[Allisonfaye]

Why don''t reinstate debtor''s prison?

 

[Rank Amateur]

Date: 3/9/2009 4:08:14 PM
Author: Beacon

Date: 3/9/2009 3:55:46 PM
Author: cara
But how is it immoral for a company to hold off on issuing dividends in this economic climate? Its fine to rant on about the lack of morals and ethics in the world, but should a company really continue paying dividends when they are running out of money or should they try to remain solvent and maintain appropriate cash reserves to weather the downturn.

Sorry, but if the woman relying on the dividends wanted a sure thing, she should have been invested somewhat differently. That she was unsophisticated in financial matters or listened to her father (who didn''t anticipate the current meltdown) just makes her like everyone else who is suffering some unfortunate consequences of the financial meltdown they didn''t anticipate.

It is not immoral at all. But I never said it was immoral for banks not to pay dividends.

What I am saying is that when people cheat banks (or anyone/anything else), they cause harm. This bank stopped paying it''s dividend. This hurt the shareholders. This hurts the economy. This causes unemployment.

So it is a chain reaction. People need to stop thinking it is ''smart'' or ''just business'' to default on their agreements.

My friend was encouraged by a lawyer to default on his credit card bill. Not because he could not pay, not because of anything other than he could get away with it.

To me that is just plain wrong.

It is the same as looting during Katrina. People figure they CAN get away with it, so they do. Everybody else is doing it, right? I gotta get mine!


On a bright note, I lost a wallet with $300 in it. A 14-yr old kid found it and within an hour my wife was calling my cell saying that these people tracked my home phone # down and had my wallet. The Dad and kid wouldn''t even accept a reward. How cool is that?

 

[crown1]

Date: 3/9/2009 5:55:00 PM
Author: Allisonfaye
Why don''t reinstate debtor''s prison?

interesting that you should mention debtor''s prison. i am not familiar with that but my former neighbor who recently passed at age 94 told me all about the local poor farm. her father was in charge and they lived on the grounds. it is interesting that the local country club is on the site where the poor farm was once located.

in my community people were sent to live on the poor farm rather than a debtor''s prison. sorry for the thread jack.

 

[ksinger]

Date: 3/9/2009 5:57:11 PM
Author: Rank Amateur

Date: 3/9/2009 4:08:14 PM
Author: Beacon

Date: 3/9/2009 3:55:46 PM
Author: cara
But how is it immoral for a company to hold off on issuing dividends in this economic climate? Its fine to rant on about the lack of morals and ethics in the world, but should a company really continue paying dividends when they are running out of money or should they try to remain solvent and maintain appropriate cash reserves to weather the downturn.

Sorry, but if the woman relying on the dividends wanted a sure thing, she should have been invested somewhat differently. That she was unsophisticated in financial matters or listened to her father (who didn''t anticipate the current meltdown) just makes her like everyone else who is suffering some unfortunate consequences of the financial meltdown they didn''t anticipate.

It is not immoral at all. But I never said it was immoral for banks not to pay dividends.

What I am saying is that when people cheat banks (or anyone/anything else), they cause harm. This bank stopped paying it''s dividend. This hurt the shareholders. This hurts the economy. This causes unemployment.

So it is a chain reaction. People need to stop thinking it is ''smart'' or ''just business'' to default on their agreements.

My friend was encouraged by a lawyer to default on his credit card bill. Not because he could not pay, not because of anything other than he could get away with it.

To me that is just plain wrong.

It is the same as looting during Katrina. People figure they CAN get away with it, so they do. Everybody else is doing it, right? I gotta get mine!


On a bright note, I lost a wallet with $300 in it. A 14-yr old kid found it and within an hour my wife was calling my cell saying that these people tracked my home phone # down and had my wallet. The Dad and kid wouldn''t even accept a reward. How cool is that?

I''m glad you mentioned that, honestly. While everyone is wringing their hands in melodramatic woe about the massive evils of the world, it''s nice to remember that by and large, most people DO do the right thing, and are basically decent.