Occupy Wall Street

[scorch-]

I'm not sure morally unacceptable is the right description. Contract breaches occur all the time and you (should happen but might not always) pay your due when it happens. If there was not an intent to breach at the time of signing, I don't think it's morally unacceptable. If it was, I think we would punish breaches with jail/prison time.

Definitely not advisable or smart. Then again, neither is offering high-risk loans to individuals with shaky credit.

[mg_]

I'm sorry you think distinctions aren't important.


That explains a lot of this conversation.

[mg_]

I'm not sure morally unacceptable is the right description. Contract breaches occur all the time and you (should happen but might not always) pay your due when it happens. If there was not an intent to breach at the time of signing, I don't think it's morally unacceptable. If it was, I think we would punish breaches with jail/prison time.

Definitely not advisable or smart. Then again, neither is offering high-risk loans to individuals with shaky credit.

Foreclosure is often not the worst thing that can happen. It's why it's a security in the first place, sure, the bank would probably prefer you pay it.

However, there comes a point when foreclosure might be a more advisable position for the mortgagee.



Thatsright, I'm sorry you think distinctions aren't important, but that's your own problem. Illegality is a specific word. Contracts are between private parties, and, as Dan already pointed out, illegality is rarely a concern.

[BrentMusburger]

Foreclosure is often not the worst thing that can happen. It's why it's a security in the first place, sure, the bank would probably prefer you pay it.

Of course the banks don't want the houses back, because they know that houses aren't an ATM machine like they temporarily were during the boom times. It's a depreciating asset that has a ticking time bomb of maintenance costs (roofs, heating), lawn care, and property tax costs. Not to mention in a depressed market, the values tank and they have an inventory sitting around....becoming less and less desireable as it sits there.

However, there comes a point when foreclosure might be a more advisable position for the mortgagee.

Funny. Many taxpayers have went against their moral obligation (and something they promised in writing) because it no longer made business sense for them to pay on it.

Yet, when businesses make business decisions....like laying off staff or shifting production to what is a more "advisable position" for the company, they're monsters.

Shouldn't the homeowners "do the right thing" and eat the losses so they can meet their obligation and not be a deadbeat and fallback on the people who do make their payments?

[BrentMusburger]

I'm sorry you think distinctions aren't important.


That explains a lot of this conversation.

They've taught you well.

but that's your own problem

No, it's not my problem, because it's not something I beleive. That's something you threw into my mouth.


Never did I make the claim "all distinctions aren't important". I basically made one mistake with minor wording--and it got blown out of proportion. My point still stood that walking away from a mortgage is no less "wrong" (I'll take away the term illegal because it apparently causes a firestorm) than making mortgages to drive commissions or what have you.


I gaurentee you'd be singing a different tune if you lent me $20,000 and I just decided that I wasn't going to pay you any more for what ever reason. Afterall, you should have known I wasn't good for it and I didn't really understand the payments.

[mg_]

Never did I make the claim "all distinctions aren't important". I basically made one mistake with minor wording--and it got blown out of proportion. My point still stood that walking away from a mortgage is no less "wrong" (I'll take away the term illegal because it apparently causes a firestorm) than making mortgages to drive commissions or what have you.


I gaurentee you'd be singing a different tune if you lent me $20,000 and I just decided that I wasn't going to pay you any more for what ever reason. Afterall, you should have known I wasn't good for it and I didn't really understand the payments.

Actually, depending on the reason, I'd negotiate with you to get that back as much as possible. Hence, why smaller regional banks have been more than willing to work with their debtors, than, let's say Bank of America, Countrywide, Chase, etc.

People who are actually close to the debt often realize strictly foreclosing, blind to the facts, find it bad business.

Shocking.




Call me when you rejoin reality.

[scorch-]

I'm sorry you think distinctions aren't important.


That explains a lot of this conversation.

They've taught you well.

but that's your own problem

No, it's not my problem, because it's not something I beleive. That's something you threw into my mouth.


Never did I make the claim "all distinctions aren't important". I basically made one mistake with minor wording--and it got blown out of proportion. My point still stood that walking away from a mortgage is no less "wrong" (I'll take away the term illegal because it apparently causes a firestorm) than making mortgages to drive commissions or what have you.


I gaurentee you'd be singing a different tune if you lent me $20,000 and I just decided that I wasn't going to pay you any more for what ever reason. Afterall, you should have known I wasn't good for it and I didn't really understand the payments.

I guarantee that:
1) I wouldn't lend you 20,000$ unless it was a good investment.
2) The contract would stipulate exact terms on what should occur in cases of default, and a method of enforcement.

Funny how banks are businesses and have those in place.

The difference between negligence and poor judgment can be fuzzy sometimes, but negligence is where most people draw the line between morally acceptable but stupid and morally unacceptable. Also happens to be the point where civil liability starts turning into criminal offense in a lot of cases. Strange how that works.

[BrentMusburger]

Actually, depending on the reason, I'd negotiate with you to get that back as much as possible. Hence, why smaller regional banks have been more than willing to work with their debtors, than, let's say Bank of America, Countrywide, Chase, etc.

You'd help me only because, as a small lender, that $20,000 actually is materially significant to you and you don't have millions of other outstanding loans. The reality is, that if you were large enough of a lender, you would tell me to eat a dick, foreclose, and find someone else.

The big banks starting working with people, when it became material--just like the small banks did--but it became material to them much sooner.

They don't owe anyone anything.

But really--what were the big banks supposed to do? Open new offices, hire more employees, use more computers, paper, take on more overhead, and the whole 9 yards---shifting their resources of their business into a "lose even more money on the customers costing us money" division? Because, it's not like all this infrustruture is already sitting there in place ready to be shifted.....it's busy being used to do their core activities.

People who are actually close to the debt often realize strictly foreclosing, blind to the facts, find it bad business.

Shocking.

Or more likely they are less diversified. Being a small bank, they only work in their region. If the shit hits the fan in their region, it's not like a bunch of new customers are going to come riding in on a golden horse.

Make no mistake about it, they are only working with people because it creates less of a loss for them--and since they're smaller they are much more scared of losses. It's NOT because they're any "nicer".

They want to grow their market share by seeming nice compared to the big bad bank and play it off like they're the small friendly guy down the corner.

I guarantee that:
1) I wouldn't lend you 20,000$ unless it was a good investment.

Well, then you would have been exposed to the paradox of risk. You would have looked at my past to determine the risk of loaning to me, but the very idea of risk is that the future will be different from what we expect.

This article is about the dollar bubble, but it's the same idea to help you understand if you substitue the words in to apply to banks.

Of course they see it! (Bankers/Buyers) can see what is happening. They wonder about it and shake their heads. It even scares them a little, sending chills down their spine. But they keep (selling mortgages/buying) as though possessed. The greater their doubts, the more greedily they (make loans/cash out on equity). Indeed, that's exactly what is so crazy about these (banks/buyers) and their behavior: The client isn't just a client. (The buyer) creates the security he's purchasing by the very act of purchasing it. If (buyers) were to stop buying (mortgages) tomorrow, suspicion about the (housing values) would spread and insecurity would grow. Then the dream would end. The (values) would start to falter and all the wealth held in (housing properties) would lose its value. Of course, that's not something (banks/buyers) want to see happen.

The only way to fight a weak (housing market) is to strengthen it. Many people no longer care whether the market still justifies the faith people seem to have in it. The new game, which amounts to playing with fire, works exactly the other way around: The (buyers) deserves the faith they gets because otherwise (we lose) that faith. (loans) are bought so they don't have to be sold. The (market) is strong because that's the only thing that can prevent it from growing weak. Reality is ignored because only by ignoring it can the dream come true. Or, to put it still more clearly: Behaving irrationally has become rational behavior.

As long as the faithful outnumber the skeptics, everything works out fine for the (housing market). The trouble starts the day the scale begins to tip.

The process is complicated by the fact that (banks) aren't driven by blind faith alone. In part, it seems, hard facts also push them to extend their credit of trust a little longer. (Housing value growth)-- an impressive figure on paper -- is an important benchmark. When it is high, (banks) feel reassured in their faith in the power of the (buyers) to perform well.

And yet this benchmark is not as reliable as it seems. The faith (banks) have in the figure has actually helped create it. After all, the purchasing price of (more houses) feeds almost directly into state consumption. In this way, the expectations of (banks) -- including the expectation that the United States will continue to grow -- transform into certainties almost all by themselves.

In other words, the capital of trust creates the very growth rates it needs in order to justify itself.

These days, the (home loans) are making a lot of people uncomfortable. One morning many (banks/buyers) will wake up and look at the facts about the (housing market) without their rose-colored glasses --

Greed triumphed over fear for a few years -- but then fear came back.

Much the same fate is in store for the (homebuyers) and for (bank) loans. The (homebuyers) has sold more security than it has to offer. The expectations traded will turn out to be valueless because they can't be met. Just as the New Economy was unable to provide investors with either the growth or the profits that had been predicted for investors, (banks/buyers) will one day have to admit that the (values) backing the (housing market) they sold is weaker than they claimed.

Everything is fine. Until it isn't. Your loans look collectable, until they are not. You look like you'll be able to meet your payments, until you lose your job and cannot.

My belief is that the banks are EQUALLY responsible with the American public. Both sides were greedy and continued to act like there were no consequences.

A drug dealer on a street corner can offer every kind of crazy drug I don't understand imaginable, but if I don't bite and take a hit for a high, I'll be fine. They may be providing it, but I'm accepting it. The drug dealer has no control over me if I stay away from what he's peddling. He or she can only destroy my life if I let them in.

At the end of the day, you both suck. Dealer and Druggie alike.

[ward]

Who the fuck resurrected this thread? DIE IN A FIRE

[Sym]

My belief is that the banks are EQUALLY responsible with the American public.

That is nonsense. Disregarding the fact that 'the American public' is not a corporation of people and is, rather, millions of individuals actly largely independently you STILL can't reasonably justify this stance because neither party is responsible for the same thing. When the full weight of the crisis had arrived investment banks like Lehman, Bear Sterns, Morgan Stanley and Merril Lynch were holding AT LEAST 30 to 1 leverage ratios. THIRTY TO ONE. At that level it's no wonder sub-prime foreclosures could have wiped out equity (and it did, with Lehman taking a 3% hit, wiping out its equity, and sending them into spirals of asset sales). A single man foreclosing on his home does not, under any circumstance, equate to a multinational corporation leveraging itself beyond its means via risky securities and opaque practices.

It's absurd to take those individual home owners and lump them all together as the 'public' to act as, what, a moral counter-balance?? Maybe we should examine what we're trying to counterbalance. We have one side that literally creates an entirely seperate opaque banking and credit system in order to bypass regulation to fund its habit, and the other side...well it took a loan to buy a house that had the possibility of having its rate jacked up. Do you see a difference here?

Your analogy about the drug user/drug dealer dynamic is utterly hollow. The act of taking out a mortgage on a home is not a 'drug'. Nor is it inherently addictive. Smart and capable homeowners take out mortgages every day. It's practically part of the American Dream. And a good portion used ARM's effectively. Starting out in an ARM and moving to a fixed rate as they began to see it move up. But because some of them didn't it caused a loss--statistically normal. But because the institutions higher than the actual foreclosure were leveraged into the oort cloud, and had gamed their assets to the point where they couldn't even be identified properly it helped cause the whole thing spin into a crisis.

So unless you're willing to say that every sub-prime foreclosure acted in coordination with one another you can't even begin to equate the actions taken collectively by the Financial Sector with those taken by your 'American Public', and thus you can't equate their blame. You seem to be a capable thinker, but you're showing a distinct lack of it in your adherence to blaming this or that cultural abstraction. "Greed" isn't a real thing, so blaming it is worthless. And I can tell you from first-hand experience that people who take out mortgages on their homes DO understand the consequences. So your ire is coming across as bordering on white-washing. It ends up as the equivalent of a 'kids these days' attitude and it's entirely out of place.

[BrentMusburger]

Your analogy about the drug user/drug dealer dynamic is utterly hollow. The act of taking out a mortgage on a home is not a 'drug'. Nor is it inherently addictive.

Credit is the drug. Americans are beyond a doubt addicted to easy credit. It's not just the mortgage. It's the multiple credit cards, student loans, car loans, "in-store" credit, you name it.

The U.s savings rate was NEGATIVE. Private household debt is 9 trillion dollars, and 40% of that has been incurred since just 2001. The trade deficit was running at over $500 Billion a year, federal deficits have soared. Municipalities are in debt up to their eyeballs.

The Americans are enjoying the present at the cost of selling off ever larger chunks of their future. Arguably, the imminent economic crisis is the most thoroughly predicted one in recent history. Rather than refuting the crisis, the current US economic boom merely heralds it.

Biologists have observed similar phenomena in plants contaminated by toxins. Before they wither, they produce one last batch of healthy shoots -- to the point that they can hardly be distinguished from healthy plants. Some speak of a panic bloom.

What all those various deficits suggest is that Americans were consuming far more than they produced. You can do that over the short run, but over the long run, it's of course impossible. Without savings, there is no future.

Banks are leveraged, but all those loans went to someone, and that someone is also highly leveraged as well.

We have one side that literally creates an entirely seperate opaque banking and credit system in order to bypass regulation to fund its habit, and the other side...well it took a loan to buy a house that had the possibility of having its rate jacked up. Do you see a difference here?

Right....that's all they did. Uh huh.

"From 2004 through 2006, Americans pulled about $840 billion a year out of residential real estate, via sales, home equity lines of credit and refinanced mortgages, according to data presented in an updated working paper by James Kennedy, an economist, and Alan Greenspan, the former Federal Reserve chairman. These so-called home equity withdrawals financed as much as $310 billion a year in personal consumption from 2004 to 2006, according to the data."

You were saying? AT the height of the insanity, people spent $1,000,000,000,000 of borrowed money based on borrowed money in 3 years. If you're going to BORROW money, it better be on a worthwhile investment and not just personal consumption----something that doesn't generate a return.

If you had gone into business on the day Jesus was born, and your business lost a million dollars a day, day in and day out, 365 days a year, it would have taken you until October 2737 to lose a trillion dollars.

People want to know where their money is for today or for the future.....they spent it all yesterday.

[BrentMusburger]

Imagine for a moment that someone inherits a farm. Let's say that the farm has good topsoil, a good well, good breeding stock, good seed, and excellent farm equipment in good repair. Prior to passing into the control of the present owner the farm did a good business selling vegetables, meat, and dairy products to the local market, and it made a small profit.

But let us suppose for a moment that the present owner of the farm doesn't understand farming, or isn't even really interested in learning. The present owner has no objection to standing around looking good, so he stays at the farm, standing in front of it, looking good to passers by.

Of course, the bills still come in, so our farmer puts them on his credit card. When that bill comes due he uses another credit card, Then another. Pretty soon the interest payments alone are higher than his bills and the banks get nervous and call him. No problem. Our farmer sells the tractor, takes the money around to the various credit cards, the food store, the utilities, and pays off all his bills. Then he stands around in front of the farm looking good to passers-by, the lord of his domain.

Will, the bills still come in. Again the credit cards get loaded up. So, this time our farmer sells the harvester. Then later on, the cattle, then the chickens, then the seeds, then he leases the well to his neighbor and finally sells the top soil from his farm to another farm down the road whose soil is getting tired. The cash is taken around to the various creditors, the food store, the utilities, etc.

Now at this point, our farmer thinks everything is okay. The bills are paid, he has a little cash in his pocket, and everything is fine.

Of course, you know better. The farm simply does not exist any more; it's just an empty lot with a few buildings, and soon they will be gone as well. The path from the farmer's present condition to seizure of the property for unpaid taxes is a foregone conclusion, even if the farmer doesn't look far enough ahead to see it.

Poor, dumb, stupid farmer.

That farmer is the American people, the government, and our business leaders.

Just as our hypothetical farm has lost its soil, livestock, seed, and farm equipment, America has lost its manufacturing ability.

Our nation is broke, bankrupt (when it loses the reserve currency status that is), and having sold much of its machinery and technology (or given it away to political donors), is unable to easily return to those endeavors which once made our nation great. Our infrastructure is in decay (the percentage of roads in the US with major damage doubled last year alone), our public schools unable to produce a workforce able to function in a high-tech manufacturing environment, and those managers end engineers with manufacturing experience have in great part been lured away to other nations. The severity of our total government debt has reached a point where the promise that the taxpayers can be made to cover any foreign investment loss rings hollow, because we can no longer pay the debts our government has now.

Our nation is in trouble. We don't make many of the products we used to make. Consequently we don't have the products to sell that we used to. We don't even make most of the products we need ourselves (like that computer you're staring at this very moment). Result: we have a massive trade imbalance. Our nation is becoming poorer, it is hopelessly in debt, and all the artificial escalation of stock/home prices cannot conceal that.


And as the artificially pumped up stock and housing market continues to decline, the true scale of the economic horror which is the product of decades of mismanagement, will become apparent to all

Michigan was the canary in the coal mine, and no one across the country wanted to listen, because they were too busy living the high life in the stock and housing markets.

But it's time to untie Detroit. Because we may be a few steps behind the rest of the country, but we're a few steps ahead of it too. And what's happening to us may happen to you.

Do you think if your main industry sails away to foreign countries, if the tax base of your city dries up, you won't have crumbling houses and men sleeping on church floors too? Do you think if we become a country that makes nothing, that builds nothing, that only services and outsources, that we will hold our place on the economic totem pole? Detroit may be suffering the worst from this semi-Depression, but we sure didn't invent it. And we can't stop it from spreading. We can only do what we do. Survive.

And yet we're better at that than most places.

Enough. We're not gum on the bottom of America's shoe. We're not grime to be wiped off with a towel. Detroit and Michigan are part of the backbone of this country, the manufacturing spine, the heart of the middle class -- heck, we invented the middle class, we invented the idea that a factory worker can put in 40 hours a week and actually buy a house and send a kid to college. What? You have a problem with that? You think only lawyers and hedge-fund kings deserve to live decently?

Read more: http://sportsillustrated.cnn.com/2009/w ... z1gtSiQWUH




There used to be a phrase that so as GM goes goes the country. Well???? Enjoy driving that foreign car---that is, until it gets repocessed.

[BrentMusburger]

Oh, and one last little thing.

Americans want the wealth to be more evenly distributed. They don't think it's fair that the rich have all the money.

Guess what? Americans represent 3% of the world's population, and consume more than 25% of its resources. If we expand this theory outside of your own self absorbtion, and include the human population, you're the rich, and they are the poor.

The wealth is being redistributed from the rich to the poor. But, I regret to tell you it's not in the form that you wanted. You're going to have to get by with less and less as the rest of the world boosts their living standard.

An increasingly debached currency is going to cause us to lose our privaledge of buying up the world's resources with paper money that has value because our military says it does---This will put an end to the rest of the world subsidizing American consumption.

But fair is fair, right? You should have to give back to the world that has given you so much? We would have never gotten to this point without the sweat from the brow of all the little people. Right???

Be careful what you wish for, because you just might get it, and it might not be at all what you expect. (redistribution of wealth from rich to poor).

I'm sure that you'll all disagree with that as well, but that doesn't make it any less true. Enjoy the ride.

Today's snowdrift will become tomorrow's avalanche. The masses of snow are already accumulating at breathtaking speed. The avalanche could happen tomorrow, in a few months or years from now. Much of what people today think is immortal will be buried by the global currency crisis -- perhaps even the leadership role of the United States.

Call me when you rejoin reality.

Ring Ring.

[rehpyc]

man, and here I thought GotFrag was the end of dealing with THRASHER and ThatsRight

[dane]

man, and here I thought GotFrag was the end of dealing with THRASHER and ThatsRight

[unpro]

it would be bad, if he wasnt on a thread with the debate going, and he wasnt behaving himself.

hes also made many fair counterpoints to what is being said, and isnt being a dick about it. however some of you guys are being a dick to him for him disagreeing with you and presenting reasons as to why he disagrees. calling someone an idiot because they hold a different viewpoint than you is dumb as shit, stop.

hes also capable of articulating the exact argument i was making earlier much better than me. kudos to him for taking the time.

ps: i linked that vid like 8 pages ago bitches.

[BrentMusburger]

it would be bad, if he wasnt on a thread with the debate going, and he wasnt behaving himself.

hes also made many fair counterpoints to what is being said, and isnt being a dick about it. however some of you guys are being a dick to him for him disagreeing with you and presenting reasons as to why he disagrees. calling someone an idiot because they hold a different viewpoint than you is dumb as shit, stop.

hes also capable of articulating the exact argument i was making earlier much better than me. kudos to him for taking the time.

ps: i linked that vid like 8 pages ago bitches.

First world problems, man. First world problems.