Gas is bad... but we have bigger issues...

uncc civilengineer

uncc civilengineer

Well-Known Member
Joined
Jun 28, 2006
Location
Pfafftown, NC
...Morgan Stanley Reportedly in Talks with China as Fear Grips Financials...

Take overs are going to be the end of us..... and please dont come in here blaming it on the Bush administration... The US has been over paying hi-end execs, wall street, etc. and selling out for a long time...

Just wondering what others were thinking...
 
Fawk yeah bundle a buch of crap financials and sell it to them. Reverse Wal Mart at its finest!
 
uncc civilengineer said:
...Morgan Stanley Reportedly in Talks with China as Fear Grips Financials...
Take overs are going to be the end of us..... and please dont come in here blaming it on the Bush administration... The US has been over paying hi-end execs, wall street, etc. and selling out for a long time...
Just wondering what others were thinking...
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Not to change the subject but does'nt GWB have to go through congress to do anything and is'nt congress mostly DEMS?
 
i thought morgan stanley was in talks with wachovia? last time i checked, wachovia wasnt chinese.

whats your source on the chinese thing?
 
BigRedB2 said:
i thought morgan stanley was in talks with wachovia? last time i checked, wachovia wasnt chinese.
whats your source on the chinese thing?
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X2. I heard wachovia, wheres the chinese play into that?
 
Fox News, CNN... earlier today were talking about it...

The Wachovia stuff rumors too... Do you honestly think Wachovia is going to purchase another company in the shape they're in?
 
There is some precedent for this, remember back in the 80's when the Japenense economy was booming and they were buying all sorts of US real estate? (Empire state bldg, etc)

Just a note, we are running the gauntlet here of politics, will keep an eye on this but if we fall off the tightrope I will just move this over to the Garage so we can flail away! :)

Prez has some influence and the almighty VETO power, which keeps Congress from getting "too crazy" Finally if both of them go nuts and do something truly stupid, the Supreme Court comes back in and reverses it!

(This next statement could easily be construed as political and I am the freakn MOD)

Much our current financial woes comes from the mortgage mess. The mortgage mess comes from 2 things, one is the "normal cycle of boom/bust"... the 2nd thing is "social control" by gov't who was trying to put people in "their own homes" at any cost, even when those folks had already proven they could not be fiscally responsible.
 
SHINTON said:
the 2nd thing is "social control" by gov't who was trying to put people in "their own homes" at any cost, even when those folks had already proven they could not be fiscally responsible.
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The larger blame falls at the execs at these firms who were in place after banks were de-regulated and given the same abilities as commercial banks without the same standard traditional oversight and diligence. Their pay structure, bonuses, shareholder dividend were all based on short term goals and newer loans. Basicly a goverment sanctioned ponzi scheme when the Fed is lowering rates and encouraging a surplus of loanable money in the marketplace. But it was teh execs who allowed and motivated their loan officers to give a loan to anyone regardless of repay ability. Everyone knew they would just re-sell the loan in a few months and keep the profits off the origination fees.
No govt oversight of non-commercial banks should end and will change very soon. I am a big tim Rep but fully favor govt regulation of this. You cant reduce greed and shouldnt but you can reduce the allowable ways and increase the transparency of the process.
Obama was given ALOT of Fredd/Fannie money. Those execs were the dumbasses that bought the worthless loans knowing damn well the govt would have to guarentee them. Hopefully the fuse is lit and the explosion happens right before November.:flipoff2:
off soapbox
 
SHINTON said:
Much our current financial woes comes from the mortgage mess. The mortgage mess comes from 2 things, one is the "normal cycle of boom/bust"... the 2nd thing is "social control" by gov't who was trying to put people in "their own homes" at any cost, even when those folks had already proven they could not be fiscally responsible.
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Agreed that the mess stems from the mortgage crisis (credit companies in general), but unless I missed something- the only thing the gov't did here was not stop the bad mortgages.

The SEC is set up to control bad business practices on a large scale. These mortgage companies were all publicly traded and making the bad decisions. Interest only loans, ARMs, baloon loans, no down payments, over extended credit- all these are unacceptable risks taken on by greedy CEOs and thier board of directors. The SEC & gov't didn't provide these loans, they only let them happen and then bailed out the failed companies.

Of course now that the gov't is footing the bill for 50%+ of all mortagages in the US (Fannie Mae & Freddie Mac)- they should set up specific rules to buying a home- Mandatory 20% downpayment, 5% fixed loan for anyone who can afford the payment, set affordability calculators to tell you how much house you can really buy.

Gov't regulation... sure- deregulation hasn't worked for my electricity bill...

We could add commodities exchange here- copper, gold, oil, etc... used to be closer regulated by the Gov't, but since that freed up under Billy...

Sorry- I'll get off the soap box too...
 
ya, that's what you heard. and I'm not sure if it'll work or not, but it sounds like a crock of shit to me. They Buy it and "Write OFF" the majority of it. so the Debt just miraculously disappears. HORSE SHIT! Someone is gonna pay for it! who is it gonna be?
 
Mountain Ram said:
Of course now that the gov't is footing the bill for 50%+ of all mortagages in the US (Fannie Mae & Freddie Mac)- they should set up specific rules to buying a home- Mandatory 20% downpayment, 5% fixed loan for anyone who can afford the payment, set affordability calculators to tell you how much house you can really buy.
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This is a great philosophy, except in practice is impractical - at least that 20% down payment part.

That may be feasible in NC where home prices are in the 100-200k range, but many parts of the country aren't like that.
Up here in Maryland, you're looking at 300k+ for a halfway decent small house, realistically 400+ for something decent... and that's NOT anywhere close (e.g. < 1 hr drive) to DC.
20% of a home like that is $80,000. How long do you think it takes to save up that kind of coin? Yes, salaries are inflated too but not by nearly the same margin.
If you look at the stats, the problems all lie in the high-density areas that had the crazy insane stupid huge hike in home values. People got into loans they couldn't afford because, well, the prices of things required it - if you want a place to LIVE you HAVE to accept that 3% FHA-backed loan just so you can get in the door.

As example, we sold our home in Lewisville NC and walked away w/ >20% cash value in pocket, after busting ass for 7 years working on it, upgrading, fixing, etc (only put down 5%). Gallons of sweat (equity) put into that place. We have absolutely perfect credit.
Get here to MD, and low and behold, that same pot of money won't get me the minimum down payment, esp w/ closing costs (around $8k) for a loan. I have a decent Gov't job, my wife is a teacher, we can afford the payments and have proven our fincal responsibility - we're the model family for home ownership, but guess what - no way in hell that 20% would ever work for us.

Alot of the blame here falls on the shoulders of the quick-flip high-resell b/c-of-perceived high-demand housing brokers. They drove up the price for everybody getting rich quick themselves, suddenly the folks that were in fine shape can't afford housing anymore (note - when local values go up, so does rent!). So people have to either (a) accept less-than-ideal loans, (b) pay more in rent), or (c) move). Shitty choices, eh?
 
I am from Boston originally and I see your point...Home prices are inflated, but how do you fix that...

The right way to do it is require 20% downpayment and proof of ability to afford it. Very few will be able to afford the overinflated prices in the limited markets (mostly cities) and the market price will correct itself over time. I know alot of people who overpayed for their homes will be hurt financially by this, but you have to end the downward spiral somewhere.

Will something happen to correct the market? Doubtful, but you bet it will be ALOT harder to get a house in the coming years.
 
Mountain Ram said:
I am from Boston originally and I see your point...Home prices are inflated, but how do you fix that...
The right way to do it is require 20% downpayment and proof of ability to afford it. Very few will be able to afford the overinflated prices in the limited markets (mostly cities) and the market price will correct itself over time. I know alot of people who overpayed for their homes will be hurt financially by this, but you have to end the downward spiral somewhere.
Will something happen to correct the market? Doubtful, but you bet it will be ALOT harder to get a house in the coming years.
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I guess my point is, if you can demostrate the ability to afford the payments AND good credit, responsible history etc - why require 20%? that's just a huge pile of money to have to have ON HAND to drop at once.
I see your point, but what you describe is a scenerio where only wealthy folks can afford to buy homes, forcing everybody else into renting (you have to live somewhere), which makes it even harder to save long-term... only furthering the divide between Have /Have-Not.
Clearly you need buyers to have some personal investment - one option would be to allow for putting up additional asset as collateral (e.g. vehicles).
 
RatLabGuy said:
I guess my point is, if you can demostrate the ability to afford the payments AND good credit, responsible history etc - why require 20%? that's just a huge pile of money to have to have ON HAND to drop at once.
I see your point, but what you describe is a scenerio where only wealthy folks can afford to buy homes, forcing everybody else into renting (you have to live somewhere), which makes it even harder to save long-term... only furthering the divide between Have /Have-Not.
Clearly you need buyers to have some personal investment - one option would be to allow for putting up additional asset as collateral (e.g. vehicles).
Click to expand...

I'm definately no expert here but since I've bought a couple houses in my life, this stuff is making pretty good sense to me.
20% from the buyer being the magic number opposite the 80% that the financer uses to determine if the mortgage has to be insured. Below 80% and the risk of a foreclosure is much lower considering the option to sell the house from the financer's standpoint for that 80% value is much easier to regain full losses than trying to regain full value. In opposite action though, the market corrects itself with home prices falling to find a buyer but not the values (appraisals). Same goes for the million dollar homes to start selling for $900,000 to find a buyer who can come up with just 10%.
If I had to sell a middle class home of around $100,000 (an easy round number), but only the upper class could afford knowing a down payment was needed of $20,000 (20%) (about the price of buying a new car with cash), instead of having to wait years to find a buyer who wanted it bad enough, I would simply lower my price to $95,000 or even $90,000 so that a potential middle class buyer could afford the 20% and I could sell it and move on. No upper class buyer will ever want a Middle class home. A small loss on my part but I'd pick it right back up on the next purchase of a market corrected home being sold for 90% appraised value again. Comes around - Goes around sort of thing. Values remain as prices fall instead of the opposite which is happening right now.
But in turn, the Fed is still needed to intervene into the markets so that dumb buyers don't get the options of high interest rates and buying homes for more than a legitable appraised value. There will always be a buyer out there regardless of the risks that has to stop to correct this situation. But I think it's the stupidity of the general public that got us in this position to start with and it's taking ALL of us to correct it...
 
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