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ORIGINAL: Moonhead

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ORIGINAL: DarkSteven
The looser credit is, the more consumption will be. Consumption is of course a good thing - as long as the ability (and inclination) exists to pay off the credit.

Sadly, the plutocracy doesn't see it that way: they'd rather hoard their assets however many of your countrymen end up unemployed (and probably unemployable) as a result.

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2. The 1% (as you call them, the plutocracy).

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ORIGINAL: vincentML

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ORIGINAL: mnottertail

It was the way the usury was structured that put everybody in the shittter.

Not sure I understand your point. Isn't usury excessive and unreasonable vig on borrowed money? Lookit payday loans . . . 120% annual interest rate.

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The middle class is IMO what drives the actual economy because they represent the majority of the demand for goods and services.

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ORIGINAL: Moonhead

Steven, the problem with the plutocracy not spending its money is that there's an unfortunate tendency to try to bribe them to put it back into circulation with tax cuts, rather than fixing a flate rate tax so that they at least put some of it back into society. This hasn't worked in living memory. That's the whole problem with all of this nonsense about trickle down theory in a nutshell. Money doesn't trickle down. It never has, and it never will. As you say, if anything it trickles up, away from the shrinking middle class, and the scum at the bottom of the pile who are the two main groups who actually spend their money when they have it, rather than hiding it in offshore banks.

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ORIGINAL: Owner59

No way......the con talking points say that our debt is growing...President Obama`s fault yada yada.....

"WASHINGTON (MarketWatch) — Everyone knows America has too much debt. What they don’t know is that things are getting better, not worse.
Little by little, our economy is reducing its debt burden, slowly repairing the damage caused by 10, 20 or 30 years of excess.

If you want to know why economic growth has been so tepid, here’s your answer. Four years after the storm hit, the economy is still deleveraging. And it’s very hard for any economy to grow when everyone is focused on increasing their savings.

Total domestic — public and private — debt as a share of the economy has declined for 12 quarters in a row after surging over the previous decade.

The rapid rise in federal debt over the past four years has distracted us from the big picture. The level of public debt is indeed worrisome, but it’s not as big a worry as the economy’s total level of debt — public and private.
Although we have a whole cottage industry devoted to warning us about the dangers of too much public debt, we don’t have any comparable Cassandras telling us about the dangers of too much private debt. Yet the history of the past 30 years (or 300) clearly shows that too much debt, of whatever variety, can pose a systemic risk to the national and global economies.

As much as we hear politicians, pundits, tea-party patriots and the Congressional Budget Office obsessing about government debt, it was excessive private debt — not public debt — that caused the 2008 financial meltdown"

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ORIGINAL: LookieNoNookie

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ORIGINAL: Owner59
No way......the con talking points say that our debt is growing...President Obama`s fault yada yada.....

"WASHINGTON (MarketWatch) — Everyone knows America has too much debt. What they don’t know is that things are getting better, not worse.
Little by little, our economy is reducing its debt burden, slowly repairing the damage caused by 10, 20 or 30 years of excess.

If you want to know why economic growth has been so tepid, here’s your answer. Four years after the storm hit, the economy is still deleveraging. And it’s very hard for any economy to grow when everyone is focused on increasing their savings.

Total domestic — public and private — debt as a share of the economy has declined for 12 quarters in a row after surging over the previous decade.

The rapid rise in federal debt over the past four years has distracted us from the big picture. The level of public debt is indeed worrisome, but it’s not as big a worry as the economy’s total level of debt — public and private.
Although we have a whole cottage industry devoted to warning us about the dangers of too much public debt, we don’t have any comparable Cassandras telling us about the dangers of too much private debt. Yet the history of the past 30 years (or 300) clearly shows that too much debt, of whatever variety, can pose a systemic risk to the national and global economies.

As much as we hear politicians, pundits, tea-party patriots and the Congressional Budget Office obsessing about government debt, it was excessive private debt — not public debt — that caused the 2008 financial meltdown"

I'm missing something here.....

Your point was?

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the economy is still deleveraging

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ORIGINAL: mnottertail

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ORIGINAL: vincentML

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ORIGINAL: mnottertail
It was the way the usury was structured that put everybody in the shittter.

Not sure I understand your point. Isn't usury excessive and unreasonable vig on borrowed money? Lookit payday loans . . . 120% annual interest rate.

and that is what the ARMs and the shitbox derivitives were.

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ORIGINAL: DesideriScuri

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ORIGINAL: mnottertail

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ORIGINAL: vincentML

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ORIGINAL: mnottertail
It was the way the usury was structured that put everybody in the shittter.

Not sure I understand your point. Isn't usury excessive and unreasonable vig on borrowed money? Lookit payday loans . . . 120% annual interest rate.

and that is what the ARMs and the shitbox derivitives were.

Um, did homeowners get forced into signing on the dotted line for those ARM's?

The only real problem with the derivatives is that no one truly knew which derivatives had the shitty loans, or which loans within the derivative was shitty. Knowing that there was a very small % of loans out that were shitty gave everyone investing in them puckered sphincters, and the value of the derivatives dropped like a rock, regardless of the quality of the loans inside. There just weren't *that many* shitty loans out there, but enough to ruin the entire derivatives market.

There is nothing wrong with an ARM. Nothing at all. It can be a useful too, to be honest. I signed for a 5 year ARM that would break into a 30 year fixed rate. I had planned on moving in 3-5 years, so I would never have to see that increased rate. I move 6 months prior to the ARM breaking. Was that ARM usury?

This is, once again, not holding people responsible for their actions. Did mortgage companies do wrong? Yes, and they should be punished for their wrongdoing. Did they all do wrong? No. Did the ones that did wrong always do wrong? No. They should be punished for those instances where they defrauded the lendee. The people who signed ARM's that got screwed when they ARM's broke and they didn't realize what was going to happen should bear the consequences of their choices (except in the cases where the lenders were guilty of fraud and/or misconduct). Was I happy people weren't able to meet their obligations? No. Absolutely not. Was it my fault? No. Now, every taxpayer is bearing the consequences of the few while mortgage lenders are being demonized, regardless of whether their actions were worthy of that criticism.

Cheer on the shedding of debt. Will it make the recovery more difficult? Perhaps a little. What would happen if today's lower level of consumption is the new norm? Business will take it on the chin and have to deal with it.

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ORIGINAL: Owner59

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ORIGINAL: DesideriScuri
Um, did homeowners get forced into signing on the dotted line for those ARM's?
The only real problem with the derivatives is that no one truly knew which derivatives had the shitty loans, or which loans within the derivative was shitty. Knowing that there was a very small % of loans out that were shitty gave everyone investing in them puckered sphincters, and the value of the derivatives dropped like a rock, regardless of the quality of the loans inside. There just weren't *that many* shitty loans out there, but enough to ruin the entire derivatives market.
There is nothing wrong with an ARM. Nothing at all. It can be a useful too, to be honest. I signed for a 5 year ARM that would break into a 30 year fixed rate. I had planned on moving in 3-5 years, so I would never have to see that increased rate. I move 6 months prior to the ARM breaking. Was that ARM usury?
This is, once again, not holding people responsible for their actions. Did mortgage companies do wrong? Yes, and they should be punished for their wrongdoing. Did they all do wrong? No. Did the ones that did wrong always do wrong? No. They should be punished for those instances where they defrauded the lendee. The people who signed ARM's that got screwed when they ARM's broke and they didn't realize what was going to happen should bear the consequences of their choices (except in the cases where the lenders were guilty of fraud and/or misconduct). Was I happy people weren't able to meet their obligations? No. Absolutely not. Was it my fault? No. Now, every taxpayer is bearing the consequences of the few while mortgage lenders are being demonized, regardless of whether their actions were worthy of that criticism.
Cheer on the shedding of debt. Will it make the recovery more difficult? Perhaps a little. What would happen if today's lower level of consumption is the new norm? Business will take it on the chin and have to deal with it.

The victims were duped with the promise of another re-fi in a couple years.
A fucking lie in most cases.
Predatory loans were by design.....meant to fail .
With the loan maker getting a bigger take(from a higher interest rate to foreclosing and taking everything) and the loan taker paying a higher rate.
A house of cards that wasn`t the fault of Fanny May or Freddy but went to the very heart our financial institutions.
It was private banks that put us in the ditch and it was private banks that bush nationalized in the summer of '08'.
You must have been out of the country then or you would have caught it.

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"If we compare the performance of adjustable- and fixed-rate loans by year of origination (which keeps new and old loans separate), we find that FRMs [Fixed Rate Mortgages] originated in 2006 and 2007 had 2.6 and 3.5 times more delinquent loans within one year of origination, respectively, than those originated in 2003. Likewise, ARMs [Adjustable Rate Mortgages] originated in 2006 and 2007 had 2.3 times and 2.7 times more delinquent loans one year after origination, respectively, than those originated in 2003. In short, FRMs showed as many signs of distress as did ARMs. These signs for both types of mortgage were there at the same time; it is not correct to conclude that FRMs started facing larger foreclosure rates after the crisis was initiated by the ARMs."

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"But what came first? Foreclosures or dropping home values? The Office of Federal Housing Enterprise Oversight (OFHEO) says it's a two-way street. A 2007 study released by this office also found a high correlation between falling house prices and rising foreclosure rates. Homeowners are more likely to default on their mortgage when the value of the property is less than the loan balance, suggesting that lower prices drive foreclosures. But foreclosures can also lead to lower values because there's an oversupply of houses on the market [source: OFHEO]."

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"All holders of mortgage contracts, regardless of type, have three options: keep their payments
current, prepay (usually through refinancing), or default on the loan. The latter two options terminate
the loan. The termination rates of subprime mortgages that originated each year from 2001
through 2006 are surprisingly similar: about 20, 50, and 80 percent, respectively, at one, two, and
three years after origination. For loans originated when house prices appreciated the most, terminations
were dominated by prepayments. For loans originated when the housing market slowed,
defaults dominated. The similarity of the loan termination rates for all vintages in the sample suggests
that subprime mortgage loans were intended to be “bridge” (i.e., temporary) loans. In addition,
between 2001 and 2006, the number of terminated subprime purchase-money loans (loans used to
purchase rather than refinance a house) outweighed the estimated number of first-time-homebuyers
with subprime mortgages. The effect of the subprime lending on the increase of homeownership
in the United States—a potentially positive outcome of subprime mortgages—most likely has been
overstated. (JEL D12, G1, G21)
Federal Reserve Bank of St. Louis Review, March/April 2009, 91(2), pp. 79-93.

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"Using two large proprietary datasets from New England, this paper establishes some basic
facts about the subprime crisis. First, while unaffordable interest-rate resets are often
blamed for setting off this crisis, most subprime borrowers who defaulted did so well in
advance of their reset dates. Defaults on subprime adjustable-rate mortgages are more sensitive
to declining housing prices than are defaults on fixed-rate loans, however, and the
data support a number of alternative explanations for this finding. Second, many borrowers
with good credit scores took out subprime loans as the housing boom gathered steam. It is
hard to construct a prima facie case that these borrowers were inappropriately steered into
the subprime market, however, because the loans that these borrowers took out were too
risky for prime treatment. Finally, 70% of Massachusetts homes recently lost to foreclosure
were originally purchased with prime mortgages. But subprime refinancing is especially
prevalent among owners who were likely to have extracted substantial amounts of equity
before they defaulted."