Not so much that I"forgot", I tried to be brief! Like I said, it is very complicated. More than I can say on the Boards without writing a Kendall-sized post!! HA!!!!!!!!!!!!!!!!!!!!!!!!!!!!! (Apologies to Kendall)
[Show/Hide Quoted Message] (Quoting Message by Head banger from Tuesday, March 24, 2009 9:38:44 AM)| |  | Head banger wrote: | | you forgot to acount for the fact that as the american economy goes down, they buy less crap, resulting in less work and money going elswhere.
| | | Deep Freeze wrote: | | OK, I will try to give you an abbreviated version. As I mentioned earlier, it is a very complicated process. Here goes;
When mortgage loans are made (in this manner) they are put with others. Thousands are "bundled" and sold to Wall Street as "Mortgage Backed Securities". These loan pools are used to sell investors bonds and and other "secured" investments. They are the "collateral" you mentioned in an earlier post. The theory is, not all will go bad and the interest collected in a pool is far greater than the loss. Now, the problem comes when this system grows to a point where losses begin to overtake profit. More and more of these "bad loans" go sideways and are supplemented by further bad loans. They are sold and re-sold to different investors throughout the world (so other economies are affected). As more bundled securities arrive and are sold, the risky loans that have gone bad slowly begin to affect the profit margin. In the meantime, the loss loans now become foreclosures. These are sold at reduced rate and then picked up and re-mortgaged and placed into yet further pools. The values are watered down over time, and most of the time were inflated to begin with. This causes what is known as being "upside down"..property is worth less than the amount owed. Of course, that further disrupts the total value of the securities that are the basis of other investments.
I am being somewhat simple in my explanation. The fact is, this does affect other economies because they are sold on the market and investors from all over the world are involved. Not necessarily in mortgage investments, but in the resulting securities that the bundles fund.
(Quoting Message by _strat_ from Tuesday, March 24, 2009 8:01:53 AM)
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_strat_ wrote: |
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True. So, now that we cleared that up, explain why are we in a reccesion, when it was the American citizens who took bad loans, and explain how that is connected.
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Deep Freeze wrote: |
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At LAST!!! Someone that gets it...!!! HAAAAAA!!!!!!!!!!!!!!!!!!!!!!! Oh thank you so much Ron!! You came in and said that people should take responsibility!!! WOW!!! Consequence for action!!! woo hoo!! At last! At last!! HAAAAAAAAAAAAHAHAHHAHAHAHAAA!!!!!!!!!!
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ronhartsell wrote: |
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It still ultimately boils down to individual responsibility...I have to agree with the way Freeze put...income-outgoing=???...if that's a negative number, you don't have it...how much more complicated does it have to be??...just because it's 'offered' does NOT mean one should accept!!! RESPONSIBILITY!!!!!
Good morning fellow Metalheads!!!
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Head banger wrote: |
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but, one of the large issues we are not addressing is government debt. the US government owes so much, they destablize the economy just by their daily actions. if the US federal debt was half, they owuld be much further ahead. as the govt debt goes, realy, so does the banks, the corporations, and the citizens.
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ronhartsell wrote: |
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Freeze, HB, MG, strat...all of you have nailed it...blaming the institution is only allowing the individual to escape responsibility!!! No one was forced to sign their names on the dotted line, and that's what all of this boils down to...nothing more, nothing less!!!
THERE ARE NO INNOCENT VICTIMS IN THIS EXCEPT THE TAX PAYER WHO DIDN'T TAKE OUT A LOAN YET HAS NO CHOICE IN WHERE THEIR TAX DOLLARS GO!!!
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Deep Freeze wrote: |
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You know, maybe I should put this in the Pissed Off Thread but last night, the Princess and I were watching Dateline NBC and they were doing a report on the "mortgage crisis". Now, before strat goes postal on me just let me say that it truly IS a situation caused by greed and corruption. I get that. Being in the business for twenty years, I saw my fair share of "questionable" loans. OK, now that I have prefaced my comments....:
WHAT????!!!!!!!!!!! I sat here ready to friggin PUKE when I heard these morons talking on camera. There were THREE 'borrowers' that were interviewed and guess what they ALL had in common?? ALL three signed for a loan they could not afford ! Worse yet, they continue (probably for litigation reasons) to insist they had no fault!!! WHAT??!?!!??!?! Oh man. I nearly had a stroke!!!!! What the fu#@????????Look, I know there are bad people in businesses. People that would do things to make a buck regardless of right or wrong. I understand. What irritates me is these borrowers claiming they "did not know" that they could not afford a half-million dollar home on a $1600 a month salary! Or, they claim they believed it because the "lender said they could".. WHATEVER! This is FOURTH GRADE friggin math, people!!!! You make $1600 and the mortgage payment is $3000...um, it DOES NOT WORK. You cannot blame that on anyone but yourself !!!!!!!There was even one lady that bought like THREE properties and her income taxes showed she was LOSING money in her business every year!! (Her quote; 'Oh! Those are MY taxes??) Yet she went ahead and signed papers for millions of dollars in loans and now claims it is NOT her fault!!!!!!!!!! Riiiiiiight....... Disgusting.
Like I said, I get that the banks have some responsibility here. No doubt. But these losers that claim they have NO fault at all make me sick!!!!!!!!!!!! Stupid people should NOT buy homes! I am SO sick of people blaming business for all there idiocy!
Edited at: Monday, March 23, 2009 9:11:57 AM
Edited at: Monday, March 23, 2009 9:18:22 AM |
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Edited at: Tuesday, March 24, 2009 8:23:28 AM |
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