Originally Posted By dshyates What's another $25B <a href="http://www.msnbc.msn.com/id/26876196/" target="_blank">http://www.msnbc.msn.com/id/26876196/</a>
Originally Posted By oc_dean You know .... if hybrids, fuel cell, and other energy sources were developed sooner ... I'd bet that bailout would be significantly lower.
Originally Posted By Mrs ElderP i doubt the high cost of energy has THAT much to do with people who got it over their head on their mortgage... not nothing, but not that much either... I'm all for the idea, but I fundamentally hate pile ons... if you want to pass a measure, pass it on it's own merits, don't burry it. As a matter of fact I would love a law that limits bills to a certain number of pages (like 50).
Originally Posted By fkurucz You know, it makes you wonder what is the incentive to to be responsible these days? If you are (save money on a steady basis, stay out of debt, etc.) all you will get for your trouble is a bizarro economy with high real inflation (i.e the "war on savers"). I think that we should not be surprised that Joe 6 Packs around the country tried to get in on the action by making heavily leveraged bets on real estate appreciation (which were possible thanks to no money down, no doc mortgages). A few years ago I was in Boston and on the shuttle from the airport to the rental car place the $10/hr shuttle driver was telling me about all the properties he owned and how much they were appreciating. For me this was the equivalent of the old pre-depression shoeshine boys giving stock market tips.
Originally Posted By Mr X Mrs P, as always I appreciate your pragmatic viewpoint. I would love for them to limit the bills to the issue at hand, and only that. But I guess I'm a dreamer.
Originally Posted By Mrs ElderP Actually, fkurucz, in this recent crisis the american savings rate has actually gone up!! (Granted it's gone from nothing to very pidly--we're no China) In any case, people are weird. When they feel "rich" they don't save. When they feel poor they do. You'd think it'd be the other way around, but nope!
Originally Posted By Sport Goofy << Actually, fkurucz, in this recent crisis the american savings rate has actually gone up!! (Granted it's gone from nothing to very pidly--we're no China) >> The only reason it went up is because the Commerce Department changed the formula for how the calculate the rate last year. The Bush administration got tired of hearing about a negative savings rate for over a year and a half. They decided the best fix for the problem was to change the mathematics on how the savings rate is calculated. Even under the new formula, the savings rate has not shown any statistically significant improvement with the new math applied -- although it is now miraculously positive again.
Originally Posted By Kar2oonMan >>You know, it makes you wonder what is the incentive to to be responsible these days?<< This is a very valid question, something I have been wondering myself lately. It seems like everyone, from average folks to giant corporations, just don't seem to feel any pangs of guilt over stiffing the people they owe money to. There used to be a sense of shame over this, and I just don't see it anymore. Maybe I should just walk away from what I owe. Maybe I'm a sap for worrying about paying the bills.
Originally Posted By fkurucz <<Maybe I should just walk away from what I owe. Maybe I'm a sap for worrying about paying the bills.>> You have to be savvy about this however. On one hand they tightened up the bankruptcy laws for individuals, so its now very hard to walk away from CC debt (unless all your assets are hidden overseas). This of course increased the incentive to play the "flip the house" game. When it works, you make a bundle. And when you don't, you just walk away (except in states where even first mortgages are "recourse" loans) and other than a credit ding, nothing happens to you. Also, don't refi the house, as it will now be a recourse loan. But from what I have been reading banks haven't bothered trying to collect from the deadbeats, because, well, they're deadbeats!
Originally Posted By Kar2oonMan >>You have to be savvy about this however.<< Yeah, it works a lot better if you're a CEO. Plus, I have that guilt gene, something so many on Wall St. seem to be without. I believe that a person should do his level best to pay back what he owes. Which is why I'll never be a CEO or Fed chairman.
Originally Posted By mawnck On the topic of the "guilt gene" - a family member just walked away from a mortgaged house because she had no choice. She owed $145,000 on a $95,000 house (the value had dropped quite a bit in the last year), and after cutting her expenditures to the absolute minimum, she was still in the hole for about $200 a month. In my family, this was one of the most horrible things that has ever been done - walking away from an obligation like that. But I'm tellin' you ... in the same position, I would've bailed a lot sooner than she did. The original purchase of the house was kind of an emergency thing, and she knew it was a risky loan, but it was the best of her bad options. When she originally got the loan, my first reaction was "is this bank crazy?" Who deserves the blame here? Would you have walked away under those circumstances?
Originally Posted By Mrs ElderP I know just enough about bankruptcy to get myself in trouble, so take what I say with a grain of salt. I know that there are two types of bk, the kind where you walk completely away, and the kind where you get restructuring so you pay off principle balances, but not neccessarily interest and fees. (Possibly even only partial balances--but you make some effort to pay them) I completely understand that there are situations where you need to use the second kind of bankruptcy--Medical Crisis, small business failure, and other personal crisis. On the other had I don't understand the first kind--walk away, wash your hands, and start fresh (with a big 'ole black mark). As for your family member, it sounds like she's been barely treading water for a while, hoping to figure out how to get out pool, or at least in the shallow end. This walk away wasn't the begining and it doesn't sound like the end. I wish her well and hope she finds some sound footing soon, a place from which she can rebuild.
Originally Posted By mawnck She didn't declare BK, she just said "bank, keep the house." There's a lot more to the story than I want to go into here, but she's already in much better shape than she was with the house, credit rating notwithstanding. The bank, on the other hand, is stuck with a house with a rapidly declining value. I just wonder how many more people there are in a similar situation, and how does the government think this bailout is going to help? A strange set of circumstances.
Originally Posted By fkurucz <<Who deserves the blame here? Would you have walked away under those circumstances?>> One one hand I too have the "guilt gene". On the other hand, if I see everyone else cheating and gaming the system.....
Originally Posted By fkurucz <<She didn't declare BK, she just said "bank, keep the house." >> AKA "Jingle mail"
Originally Posted By fkurucz <<I just wonder how many more people there are in a similar situation, and how does the government think this bailout is going to help?>> The idea is that the taxpayers will cover all the bad paper associated with the bad loans.
Originally Posted By fkurucz <a href="http://www.investopedia.com/terms/j/jingle-mail.asp" target="_blank">http://www.investopedia.com/te...mail.asp</a>
Originally Posted By fkurucz <<Yeah, it works a lot better if you're a CEO. >> Socialism for the masses: unnecessary and bad. Socialism for the rich: necessary and good.
