Should the Fed Help Fannie & Freddie?

[glokstadt]

[quote][i]Originally posted by phillyidol[/i]
<br>I have to add something that people have missed. I do blame the companies that issued out easy credit and loans. I also blame them for dirty practices by selling mortgages to people with questionable credit. But I also blame the people. I bought a car, I bought a house. I can afford it. I did my homework and crunched numbers until I had a budget and could afford those things. But I have to also blame these morons that bought houses and could not afford it. Yes the loaners are scum and can lie, so you do your homework and know what you are getting into for gods sake. Can you even imagine what went on? Don't worry Mr. Jones, you can afford it on your income with a variable rate loan....oh ok lets do it. Are you kidding me? Tons of people went out and got loans and wow what a surprise could not pay it. I blame idiots for this whole mess as well.


Worlds GREATEST Photographer!
[/quote]

I think it was a line in a movie I once saw: "Idiots Rule!" (If someone remembers, LMK!) Their is no real 'financial' education in this country--you learn most from your parents, who learned from theirs, etc., etc. and when and if you do learn something it's by stubbling across it somewhere, or a friend tells you something about the financial realm, or what is working for them, or for me it was a friend of the family, a father-figure, that sat me down, showed me the Rule of 72, and did the middle-class thing to do, own Mutual Funds as an IRA(s)...

Thus, people are fed loads of horseshit when getting a loan/buying a house, closing escrow, etc. The scenerio I would think goes like this:

Mr. and Mrs. Flat-Broke, we have a payment plan for you, why waste $1,500 a month on rent, when you can get your own house with no money down, we'll state your income to qualify, and your payment will be around $900 to $1,000 a month! How's that???

Now they have that dream home, no impound accounts set up, so insurance and taxes are something they are not used to aying, and that 1% (Negative) ARM loan will be killng them in 1, 2 or 3 years as their principle climbs every month/year, and when the house reached it's pre-determined (landmine) amount, mostly 120% LTV of the original loan amount, ka-boom, Mr. and Mrs. Flat-Broke, your payment is now $3,500 a month!!! And you owe a few years property taxes, etc.

So now they walk away from the house and give it to the bank, after of course they take everything out of the house, and walls... besides leaving some big-ass holes in it for payback to the scum loan lords who now own your castle... And so it goes...


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[glokstadt]

Associated Press Sources: $85B gov't bailout of AIG likely

AP - People with knowledge of the situation say the government is likely to put up $85 billion to help rescue the huge insurer AIG.

http://news.yahoo.com/s/ap/20080917/ap_on_bi_ge/aig

Wow, I'm in the wrong business...

[glokstadt]

[quote][i]Originally posted by coop41[/i]
<br>[quote][i]Originally posted by marie3[/i]
<br>[quote][i]Originally posted by coop41[/i]
<br>[quote][i]Originally posted by marie3[/i]
<br>

BTW, 90 percent of bankruptcy are due to medical emergencies, which is totally unacceptable in this country. This administration has changed the bankruptcy laws so it is almost impossible for an average American to claim bankruptcy, but we seem to be bailing business's out left and right.
[/quote]


I think your figures are a bit high, (http://www.consumeraffairs.com/news04/2 ... study.html)
and the interesting part of this Harvard study is that nearly 75% of people who had medical issues HAD Health Insurance, at least in the beginning, which is odd.
Another study suggests it's just easier to file
http://www.youngmoney.com/blog/index.php?p=279

I would venture an educated guess that the percentage of bankruptcies due to medical reasons is now below 50% due to the current economic environment.

Glok, I feel for you bud, hang in there, hopefully it turns around quickly!
[/quote]

What I can tell you is that is the figure that was stated in my newspaper when the bankruptcy laws were changed after lobbyist for the credit card companies got to lawmakers. It was a few years ago so I can't look up the article. I remember it clearly because it hit close to home.

It really isn't surprising 75 percent of the people had medical insurance in the Harvard study. The insurance companies tell you what kind of treatment you are getting. So if they don't deem your doctor's advice in treatment necessary, you are shit out of luck. I know, it has happened to me.
Or what about people (like my sister in law) who had cancer and exhausted her insurance? People aren't going to let their family members die, so they do what ever they have to do and to pay the rest of their lives. It's so screwed up.

Anyway, I don't know if our country really knows the severity of what is going on right now. I am just sitting tight and holding on for the ride.
[/quote]

I think that's all anyone can do right now is hold on tight!!
Don't get me started on Insurance companies, a considerable source of irritation for me.

Doing credit presentations all the time and seeing hundreds and hundreds of consumers credit reports over the past 20 years, my own personal guesstimate is medical is usually the reason in about 25% of cases. Loss of Employment is usually a big factor but even with the so-called changes to make it tougher to file, a good portion of people I see simply ran up the charge cards, bought TV's, toys, boats, cars, etc and then at some point realized there was no possible way they would be able to afford it and bankruptcy is an easy out.

Ease of credit in all aspects of our lives has played a part in our current economic crisis. Blame politicians, mortgage companies, Wall Street, credit card companies, Greenspan, whoever you'd like, but ultimately, most people who did not encounter medical issues, need to look in the mirror for the real cause.
[/quote]

Holding on really tight here...

As far as insurance companies go, I have appointments with American General/AIG and have sold many a life insurance product through them...

Allstate, OTOH blows chunks and I never got around to repnding to Phillyidol's thread o the subject matter... they are gouging and changing their plicies upon renewal to lower amounts of coverage for more money and cancelling business--they may just go under from Katrina losses that the rest of us are making up across the nation with higher premiums to pay!

I've sold insurance and investments as a part-time gig since 1995--and I have to say I've never been a firend of them, the old addage, you get what you pay for... applies here to. Mercury and other insurers are low cost because they skimp and cut corners to save a buck or two and give you lower premiums, and they have clauses in your policy that effect you, the consumer, in a bad way in order to effect a bigger bottom line (profit) for the insurance company, I am not against profit, only when it hurts the little guy.

On the financial education of US citizens, we do an awful job! having seen my share of credit reports, mine included now, over the last 15 years, and conducting an understanding your credit history workshop for the past 4 years at Santa Monica College's Small Business Development Center (SBDC), I have seen and heard every excuse known in the English language as to why people make dumb decisions and hard choices between paying rent/mortgage, lights on, and food on the table.

Most folks lost a job or had medical issues/no health insurance... The idiots rule factor folks, they ran up their debts, bought everything in sight, went on shoping sprees, paid the minumums, and then went, oh shit... I can't pay this off ever!!!

Some blame has to go to the credit card issuers, who have the cards rigged in their favor, and use certain marketing angles to reel you in (i.e., 0% Interest, lifetime interest rate, intro teaser rate, easy transfer checks) and gottchas!

Any way folks don't know what they really need to know about credit, financial products, and insurance... just what sales guys tell them, I've never taken that approach, first always educational, and if I can't help them, or better their situation, I do not conduct business, my motto for 13 years! OK, off soap box (for now!).

[phillyidol]

AIG gets help! Thank God! I was watching this story very closely. The CEO went on tv to explain the situation and the government heard. They are so huge that if they were to go bankrupt, there would probably be a world wide depression. The chance was to big to leave to fate so the gov. gave them 85 billion and 2 years to pay it off. If you look into the story, we all dodged the bullet yesterday. Everyone came very close to being hurt in some way or another.




Worlds GREATEST Photographer!

[Spit]

[quote][i]Originally posted by phillyidol[/i]
<br>AIG gets help! Thank God! I was watching this story very closely. The CEO went on tv to explain the situation and the government heard. They are so huge that if they were to go bankrupt, there would probably be a world wide depression. The chance was to big to leave to fate so the gov. gave them 85 billion and 2 years to pay it off. If you look into the story, we all dodged the bullet yesterday. Everyone came very close to being hurt in some way or another.




Worlds GREATEST Photographer!
[/quote]
Looks like we "the American people" now own 80% of AIG. Where will the government get the money to pay the 85 billion ? Print new money. This willnot be a fix all by any means.

[coop41]

[quote][i]Originally posted by phillyidol[/i]
<br>a world wide depression. [/quote]


ummm.........

[abacab66]

The Ex-CEO of AIG said in his interview that a bridge loan was the best option. This way the company could have stayed together and possible fix its liquidity problem. Instead AIG will be no more as they begin to sell off pieces of it until its all gone.

I'd say Morgan Stanley is next.

Stay tuned.......

[coop41]

[quote][i]Originally posted by abacab66[/i]
<br>The Ex-CEO of AIG said in his interview that a bridge loan was the best option. This way the company could have stayed together and possible fix its liquidity problem. Instead AIG will be no more as they begin to sell off pieces of it until its all gone.

I'd say Morgan Stanley is next.

Stay tuned.......
[/quote]

WaMu is teetering as well.

John Stewart was hilarious the other night when he talked about AIG lending itself money

[phillyidol]

They are only going to sell off some stuff. It is still being treated like a bridge loan. They will not be selling off everything like they are bankrupt. They are meeting now to see what they can sell off without hurting the company as a whole. What will happen in 2 years? Who knows but right now they are ok. I do have an insider. So AIG is still alive and will not sell itself off in chunks.




Worlds GREATEST Photographer!

[glokstadt]

I was in my credit union the other day, and was talking to the branch manager, he told me that they (WESCOM) where closing 11 branches and stoping their Sunday branch hours--while Sunday branch hours sound convienent... I used it like twice because I'm so used to not having any financial institute on on a Sunday, I'd forget they were even open! And I'm sure others did the ame thing.

WESCOM is not a huge financial institution, I just see it as a micro fallout to the macro of the whole financial system meltdown.

[coop41]

[quote][i]Originally posted by glokstadt[/i]
<br>I was in my credit union the other day, and was talking to the branch manager, he told me that they (WESCOM) where closing 11 branches and stoping their Sunday branch hours--while Sunday branch hours sound convienent... I used it like twice because I'm so used to not having any financial institute on on a Sunday, I'd forget they were even open! And I'm sure others did the ame thing.

WESCOM is not a huge financial institution, I just see it as a micro fallout to the macro of the whole financial system meltdown.
[/quote]


They were open on Sunday???? Jesus....

[KYYX4ever]

coop, you are extremely knowledgeable about financial matters, what is your take on this gov't bailout of Wall Street/ Financial institutions ? How far do you think it will go ? Does this set a bad precedent ? What other institutions (airlines? auto ?) might come asking for their bailout in the future ?

[coop41]

[quote][i]Originally posted by KYYX4ever[/i]
<br>coop, you are extremely knowledgeable about financial matters, what is your take on this gov't bailout of Wall Street/ Financial institutions ? How far do you think it will go ? Does this set a bad precedent ? What other institutions (airlines? auto ?) might come asking for their bailout in the future ?

[/quote]

I think anyone that pretends to be knowledgable about what is going on is lying.
My personal opinion, when politicians get involved, their typically corrupt ways and warped agendas usually do more damage than good. They'll argue over this, add stupid peripheral garbage to satisfy their particular party and in the end you and I will take it in the shorts.
I also think a government bailout is the only possible solution. For some time, the only thing I have been saying is that this is a lot worse than people think. I don't think it's a political issue to be quite honest or that it's realistic to point fingers. I have always chuckled when people called it The Sub-Prime crisis or when people blamed shady mortgage companies for providing bad loans. The Public demanded it! Wall Street had an insatiable appetite! Corporate Greed has run rampant for years but the total collapse of our financial system and the far-reaching impact of this global economic crisis requires unprecedented action the likes that no one has ever seen before.
People may whine and cry about the tax implications but come on. What is the alternative? The good news is they'll be making less so they'll have to pay less taxes! The alternative? No job? No income? I guess that would alleviate any additional tax concerns.


I'm over-simplifying to be sure and you need to take what I say with this in mind:

I have been in the mortgage industry for around 25 years and I worked for the largest lender in Arizona, in our 10 year history we never failed to have a non-profitable month. We employed over 6000 people and were privately held. As other companies were failing all around us, our business was increasing.
I was doing a presentation and a group of my employees asked "What are the chances of US closing?"
I responded "Nothing would surprise me but we are extremely solid, an industry leader, highly profitable and privately held."

Later that day we shut our doors and I haven't seen any of my commissions to this day (That was over a year ago). So what the heck do I know![:)]

[Bitter Almonds]

[quote][i]Originally posted by djcraig[/i]
<br>[quote][i]Originally posted by marie3[/i]
<br>[quote][i]Originally posted by djcraig[/i]
<br>

Is this the same government you want in charge of your health care?

<a href="http://www.djcraig.net/los_angeles_dj">DJ Craig</a>


[/quote]

Medicare and Medicaid has worked fine for many years.
[/quote]

So has the Post Office, the SEC, the IRS and Fannie Mae and Freddie Mac, God bless them.

I'd prefer not to wait an average of 18.3 weeks for surgery or treatment like they do in Canada, at a cost of billions.

http://www.cbc.ca/health/story/2007/10/ ... raser.html





<a href="http://www.djcraig.net/los_angeles_dj">DJ Craig</a>


[/quote]

<p align="justify">As opposed to being denied surgery right away here in the US because your insurance company (that you've been paying into for decades) will not pay for it[}:)]

[Bitter Almonds]

<p align="justify">As to the question, it's not that the Fed (i.e., us) is "helping" Fannie and Freddie, the Fed is BUYING these loser banks. I'd feel a teency bit calmed if I knew the ceos, the bankers, and the idiots who borrowed money they couldn't pay would have all their assets taken from them, and then jailed for the duration that this problem takes to solve[}:)]