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R/E/P => R/E/P Archives => R/E/P Saloon => Topic started by: J-Texas on March 29, 2008, 12:23:31 am

Title: Yikes! It's the Feds.
Post by: J-Texas on March 29, 2008, 12:23:31 am
Kind of scary the US Treasury getting behind giving the Fed even more control!

http://news.yahoo.com/s/nm/20080329/bs_nm/usa_economy_regula tion_dc;_ylt=AlfQE6jEbexj2B_HXN4Aant34T0D

Title: Re: Yikes! It's the Feds.
Post by: rphilbeck on March 29, 2008, 08:40:50 am
Gotta protect the idiots from themselves.  
Title: Re: Yikes! It's the Feds.
Post by: J-Texas on March 29, 2008, 10:40:16 am
It's not just the idiots. The borokers were misleading the borrowers too. I don't see how something as simple as Debt to Income could be overlooked. The lenders were giving just about anyone a loan. Now those people, who knew they couldn't afford the mortgage in the first place, are living in tents in California. The lenders knew the volatility of some of these mortage products that they were offering people. Once the mortgage rates on these adjustable products went up, the borrowers couldn't pay for them anymore because they were already overstrecthing their budget to pay for the loan. Foreclosure... then tent. There's idiots on both sides.

These shady practices should have been taken care of when it was happening. Now, after the damage has been done, they want to hold the lenders to standards?

Chase aquires Bears Stern

Bank of America aqurires Coutrywide

I don't even know who's going to hold my mortage pretty soon.

It's a sad day in hell right now.

The treasury is looking to the Fed to bail everyone out right now. They could have done something about all of this before.

Now they're auctioning off emergency funds to the highest bidder?

Survival of the fittest?
Title: Re: Yikes! It's the Feds.
Post by: Jay Kadis on March 29, 2008, 11:45:22 am
J-Texas wrote on Sat, 29 March 2008 07:40


Survival of the fittest?
More like survival of the fattest.  Unbridled capitalism works great until it doesn't.
Title: Re: Yikes! It's the Feds.
Post by: mgod on March 29, 2008, 11:47:25 am
Jay Kadis wrote on Sat, 29 March 2008 08:45

J-Texas wrote on Sat, 29 March 2008 07:40


Survival of the fittest?
More like survival of the fattest.  Unbridled capitalism works great until it doesn't.


Then it becomes communism.

DS
Title: Re: Yikes! It's the Feds.
Post by: Jay Kadis on March 29, 2008, 11:54:27 am
mgod wrote on Sat, 29 March 2008 08:47

Jay Kadis wrote on Sat, 29 March 2008 08:45

J-Texas wrote on Sat, 29 March 2008 07:40


Survival of the fittest?
More like survival of the fattest.  Unbridled capitalism works great until it doesn't.


Then it becomes communism.

DS
I think you skipped socialism.
Title: Re: Yikes! It's the Feds.
Post by: danickstr on March 29, 2008, 01:39:21 pm
the fed had to do something, or panic would have ensued.  easy to say let the chips fall where they may until there is a run on your bank.  but it sucks to see the GOB network bail out the people who gambled knowing they could just count on a bailout.

they never intended to lose this much, but greed is a powerful delusional tool.
Title: Re: Yikes! It's the Feds.
Post by: Barry Hufker on March 29, 2008, 02:50:55 pm
Let's go right to anarchy and start the whole cycle over.
Title: Re: Yikes! It's the Feds.
Post by: John Ivan on March 29, 2008, 03:33:20 pm
I read this last night late, {early this morning}. And while it's the kind of thing that I need to read a couple more times to get my mind around , I think they've made a good case for the modernization of regulation in all markets..

 http://www.nytimes.com/2008/03/29/business/29regulate-text.h tml?pagewanted=1&_r=2

Over time, the tools that built our economy fall short and there ends up being a tendency for people to abuse the instruments and policies as they become less effective in protecting and growing the markets. I think it looks reasonable at first galnce but again, I need to really get my brain around it..

From the Times piece.

"Conclusion

"The United States has the strongest and most liquid capital markets in the world. This strength is due in no small part to the U.S. financial services industry regulatory structure, which promotes consumer protection and market stability. However, recent market developments have pressured this regulatory structure, revealing regulatory gaps and redundancies. These regulatory inefficiencies may serve to detract from U.S. capital markets competitiveness.

"In order to ensure the United States maintains its preeminence in the global capital markets, Treasury sets forth the aforementioned recommendations to improve the regulatory structure governing financial institutions. Treasury has designed a path to move from the current functional regulatory approach to an objectives-based regulatory regime through a series of specific recommendations. The short-term recommendations focus on immediate reforms responding to the current events in the mortgage and credit markets. The intermediate recommendations focus on modernizing the current regulatory structure within the current functional system.

"The short-term and intermediate recommendations will drive the evolution of the U.S. regulatory structure towards the optimal regulatory framework, an objectives-based regime directly linking the regulatory objectives of market stability regulation, prudential financial regulation, and business conduct regulation to the regulatory structure. Such a framework best promotes consumer protection and stable and innovative markets."
Title: Re: Yikes! It's the Feds.
Post by: rphilbeck on March 29, 2008, 05:27:49 pm
J-Texas wrote on Sat, 29 March 2008 10:40

It's not just the idiots.



Yes it is absolutely just the idiots.  The idiot banks making loans to people who don't deserve a loan, and the idiot borrowers taking loans they know they cannot pay back.

Now the rest of us, who did not make stupid decisions, get to bail these idiots out.  I am tired of bailing out the idiots.  There has got to be a penalty for stupid decisions. Otherwise, people will continue to do whatever they please with the expectation that the rest of us will bail them out.
Title: Re: Yikes! It's the Feds.
Post by: Jon Hodgson on March 29, 2008, 05:40:02 pm
RPhilbeck wrote on Sat, 29 March 2008 21:27

J-Texas wrote on Sat, 29 March 2008 10:40

It's not just the idiots.



Yes it is absolutely just the idiots.  The idiot banks making loans to people who don't deserve a loan, and the idiot borrowers taking loans they know they cannot pay back.

Now the rest of us, who did not make stupid decisions, get to bail these idiots out.  I am tired of bailing out the idiots.  There has got to be a penalty for stupid decisions. Otherwise, people will continue to do whatever they please with the expectation that the rest of us will bail them out.


Except that the risk that those banks took on in giving the loans has largely been sold on, split up, mixed with other risk, and sold on again. That's why the whole market went haywire, not only were lots of people exposed to that risk, but worse still noone really knew what their exposure was.

So it's not just the idiots, it's the sendible people who put money into a pension fund, and the hard working people who work for a oompany that finds itself exposed to that risk, and so on.

(But this doesn't mean that the people who started the screwup should get off scott free)
Title: Re: Yikes! It's the Feds.
Post by: malice on March 29, 2008, 05:50:16 pm
RPhilbeck wrote on Sat, 29 March 2008 22:27

J-Texas wrote on Sat, 29 March 2008 10:40

It's not just the idiots.



Yes it is absolutely just the idiots.  The idiot banks making loans to people who don't deserve a loan, and the idiot borrowers taking loans they know they cannot pay back.


That crash doesn't look like a crisis created by a few bunch of idiots.

When you have a lot of idiots making a lot of idiotic decisions that affect a whole economy on a planetary level with absolutly no leverage to stop it for real: you don't call it a mistake done by idiots.

You call it a system.

A flawed system, that is.

only idiots would disagree.

You don't loan money to poor people to be nice to them. You loan them money because you need them to have cash, and because it is profitable to you.

incidently : you don't loan money to people that don't need any of it. That is why poor people that needs money are paying dividends on rich people investments. That is how the system works. The trick is to make life more expensive to people that are poorer : you get the trick now ?

Supply and demand.

It's as freakin incontournable as ohm law in our field of expertise.

But please : don't.

Don't think this crisis is caused by idiots.

please

We're no fools.

malice
Title: Re: Yikes! It's the Feds.
Post by: J-Texas on March 29, 2008, 07:25:23 pm
John Ivan wrote on Sat, 29 March 2008 14:33

These regulatory inefficiencies may serve to detract from U.S. capital markets competitiveness.


Ok. More regulation will add to competitiveness? Is that what this is saying?

It is the competitiveness that got us into this trouble. Lenders paying off brokers, brokers sticking it to the borrowers with higher rates.

At least it will be fair competitiveness. With the lenders and brokers having to divulge their yield-spread premiums... it would help pull the wool off the eyes.

These aren't new practices. I don't agree with giving the Fed more power to regulate our economy. If the Fed was acting in the best interest of the US economy, it would have suggested to the Treasury to take action a lot sooner than this.

Mergers. Acquisitions. This country is going to be owned by monopolies in each industry pretty soon. A handful of companies and a million different brands to choose from.  
Title: Re: Yikes! It's the Feds.
Post by: John Ivan on March 29, 2008, 08:12:38 pm
J-Texas wrote on Sat, 29 March 2008 19:25

John Ivan wrote on Sat, 29 March 2008 14:33

These regulatory inefficiencies may serve to detract from U.S. capital markets competitiveness.


Ok. More regulation will add to competitiveness? Is that what this is saying?

It is the competitiveness that got us into this trouble. Lenders paying off brokers, brokers sticking it to the borrowers with higher rates.

At least it will be fair competitiveness. With the lenders and brokers having to divulge their yield-spread premiums... it would help pull the wool off the eyes.

These aren't new practices. I don't agree with giving the Fed more power to regulate our economy. If the Fed was acting in the best interest of the US economy, it would have suggested to the Treasury to take action a lot sooner than this.

Mergers. Acquisitions. This country is going to be owned by monopolies in each industry pretty soon. A handful of companies and a million different brands to choose from.  




It's NOT as simple as you're making it.. Maybe you should read the proposals and get an idea about what they are talking about doing..

Perhaps you've been trained to not like the word "Regulation".. This is not always a bad thing. If we don't do something to motivate better decision making and behavior, it will be harder for us to compete world wide. The "wild west" mentality at work in Mortgage origination and what is seen by many to be an inappropriate use of the discount window by the Fed, indicates that re-working regulation across all markets is probably a good idea..

You see this as MORE regulation. It might not be "More"..Just different..

Ivan.................
Title: Re: Yikes! It's the Feds.
Post by: J-Texas on March 29, 2008, 08:23:25 pm
John Ivan wrote on Sat, 29 March 2008 19:12

...what is seen by many to be an inappropriate use of the discount window by the Fed...


I NEVER said that we don't need rules regulating unfair lending practices. That's a given.

I don't think that the Fed is the right entity to make those decisions. What about the checks and balances. The Treasury is looking to the Fed to "straighten things out". And then what? Are they going to ask for the power back? Take it? Not without a price.

ps Don't sit there and poke at me by making assumptions. You don't even know me my man. A couple of posts is not enough for you to make those sorts of judgments of my character. Perhaps I have not been trained to do anything but use common sense.
Title: Re: Yikes! It's the Feds.
Post by: danickstr on March 30, 2008, 01:53:20 am
we are devaluing our currency with lazy, complaining workers, high import imbalances, and war spending that is out of control.  as the dollar becomes more and more worthless. current fed policy is also a negative contributor the only way to fix it will be to change at least one of those dollar devalue-rs.

we can't have a sound internal economy while we are bleeding cash.
Title: Re: Yikes! It's the Feds.
Post by: J-Texas on April 02, 2008, 11:08:59 am
" If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property, until their children will wake up homeless on the continent their fathers occupied. The issuing of money should be taken from the banks and restored to Congress and the people to whom it belongs."

-Thomas Jefferson
Title: Re: Yikes! It's the Feds.
Post by: emerrill on April 02, 2008, 12:57:29 pm
We are fortunate that it was Alexander Hamilton and not Jefferson who created our economic system. Jefferson's hope for an agricultural nation that shunned both industry and commerce would not have worked out nearly as well.

The problem in our current crisis is that there have been a great many institutions (and mortgage brokers) functioning as banks but not subject to the same regulations that have applied to banks since the Depression. The fed HAD to act to stop what was little more than a massive bank run.

When mortgages are immediately resold, the mortgage lender has little incentive to worry about creditworthiness. Foreclosure is always another's problem.


Eric
Title: Re: Yikes! It's the Feds.
Post by: Guest on April 02, 2008, 02:48:05 pm
J-Texas wrote on Sat, 29 March 2008 16:25

John Ivan wrote on Sat, 29 March 2008 14:33

These regulatory inefficiencies may serve to detract from U.S. capital markets competitiveness.


Ok. More regulation will add to competitiveness? Is that what this is saying?

It is the competitiveness that got us into this trouble. Lenders paying off brokers, brokers sticking it to the borrowers with higher rates.



J, I think that what the article is saying here is that regulatory inefficiencies, i.e. redundant regulation and insufficient regulation, could stop the U.S. capital markets from being competitive with other international capital markets, such as London and Japan.

Emerrill's post also made some very good points.








Jason