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HAMP'd

By Big Tent Democrat, Section Obama Administration
Posted on Fri Dec 02, 2011 at 08:39:52 AM EST
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Geithner!

It’s housing, stupid. More precisely, it’s housing finance. As the Obama administration seeks ways to revive the economy, not to mention win an election, it is becoming clear that the biggest mistake officials made when they took office nearly three years ago was to underestimate the continuing damage to the economy from the mortgage crisis.

No sh*t.

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    HAMP'd | 140 comments (140 topical)

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    Once again (5.00 / 3) (#1)
    by Ga6thDem on Fri Dec 02, 2011 at 08:42:52 AM EST
    it isn't just Geither. It's Obama too. Have you ever thought that Obama is just as inflexible as George W. Bush? That it's just easier to continue on a failed path because trying to change that path might be too hard or might not work either?

    More or less this is typical Obama---a day late and a dollar short on something.

    Oh, (5.00 / 2) (#2)
    by Ga6thDem on Fri Dec 02, 2011 at 08:44:18 AM EST
    and it should be no surprise because Obama said no to an HOLC from the very beginning.

    Parent
    Yes, that was one of the key points (none / 0) (#32)
    by Towanda on Fri Dec 02, 2011 at 11:49:18 AM EST
    in the campaign when I knew that this guy just did not get the economy.  But, of course, so few of us were saying that the economy had to be the number-one issue.  I got shouted down a lot for that, and for bringing up the differences of the candidates on HOLC, because there was no difference between them whatsoever, of course -- and suggesting that there was, well, you know what the response was to that.

    So I still hold responsible for my children's unemployment, my spouse's inability to retire, and much more any and all voters who refused to face reality -- or, worse, recognized the realities but still pushed for the wrong answer for our country.

    Parent

    The problem is that people accepted (5.00 / 4) (#74)
    by inclusiveheart on Fri Dec 02, 2011 at 02:07:25 PM EST
    non-answers like "hope" and "change" in the midst of the crisis.

    For me it was like watching firemen show up to a burning house and instead of trying to put the fire out, they dropped to their knees and prayed.  The fire was always ever going to continue to burn down the house if not one actively tried to put it out.

    Parent

    yeah (none / 0) (#122)
    by TeresaInPa on Sat Dec 03, 2011 at 02:08:11 PM EST
    like the fire would purge the evil, the new growth would start fresh and all would be well in the world.

    Parent
    I think that you give them too much credit. (none / 0) (#133)
    by inclusiveheart on Sat Dec 03, 2011 at 08:28:22 PM EST
    I think that they just prayed without any particular vision other than thinking that hoping that things won't really. really suck.

    In other words, they weren't thinking about fresh shoots.  They were just being idiots about the crops that were already in ground at the time.

    Parent

    I remember bush saying, as he snagged (none / 0) (#119)
    by TeresaInPa on Sat Dec 03, 2011 at 10:27:42 AM EST
    the election he did not win, wanting to excuse his lack of experience, "I will hire advisers smarter than me to tell me what to do.  I will bring people together and then I will decide which advice is best."
    I remember Obama saying as he snagged the nomination  he did not clearly win, by way of excusing his lack of experience, "I will hire advisers who are smarter than I am......blah blah blah..."
    Both of them thought they were such great amazing managers that they could magically make the nation and the whole world work by the power of their personalities and personal wonderful executive talent.
    When that didn't work they had no plan B.

    I hope this is the end of jackass political operatives going on TV and making the case for wet behind the ears politicians "striking while the iron is hot".  I do not ever want to hear that idiotic argument again.  The country and the world can not afford another lame president who is not ready to lead and has no plan to lead other than playing it by ear, hoping someone he hires will know what to do.  We are not talking about being president of the law review or prom king for God's sake.


    Parent

    Everyone can see how the housing finance (5.00 / 3) (#3)
    by ruffian on Fri Dec 02, 2011 at 08:58:57 AM EST
    drives consumer spending down, and everyone agrees that consumer spending derives the economy.

    How can anyone see those two facts and not see that the economy cannot be fixed without addressing the housing finance crisis? It boggles the mind.

    Should have been Housing finance crisis (none / 0) (#4)
    by ruffian on Fri Dec 02, 2011 at 08:59:43 AM EST
    in my subject...you get the point.

    Parent
    Here is part of the problem (5.00 / 2) (#5)
    by ruffian on Fri Dec 02, 2011 at 09:10:28 AM EST
    He suggested that borrowers who were under water on their loans -- that is, they owe more than their houses were worth -- but were still making their payments should be able "to earn accelerated principal reduction over time."

    Any such plan risks infuriating homeowners who were responsible and did not borrow more than they could afford to pay.

    My bold. That is just not true, or it should not be. You can have been responsible, and only borrowed what you could afford to pay, and still be a hundred thousand dollars underwater through no fault of your own. I am living proof. The falling market sunk all boats, not just those of the irresponsible.

    I am (5.00 / 2) (#6)
    by Ga6thDem on Fri Dec 02, 2011 at 09:23:54 AM EST
    sick of that same storyline of blaming the buyer. First of all when we bought our house we bought 1/3 less than we qualified for. The second thing is due to losing an job and some other things my husband's income has declined 35% since we bought the house. Since we bought the house, the value of the house has declined 25% so I could buy the same house for way less than I did 8 years ago.

    What is the solution? The banks are not willing to work with you and I'm not sure if we even qualify to refinance the loan balance because of the pay cuts that have happened. Rents in my area have skyrocketed where they are as much as a house payment. It's just insane.


    Parent

    "What you qualified for" is one of (5.00 / 2) (#76)
    by inclusiveheart on Fri Dec 02, 2011 at 02:18:07 PM EST
    THE most important factors in this ongoing saga.  

    The BANK offered you that loan amount.  

    The fact that you did not take them up on the full 100% is lucky for THEM, too because based on what you are saying about your situation, you might be in an even worse position right now - as would they - without payments on a loan on which in this market they would certainly take a hit if you had to walk away.

    The banks were reckless as hell about handing out loans; and this point just has not been addressed in any meaningful sense.  John and Jane homebuyer just cannot be relied upon to do the complex computations and projections about where a market is going and how reliable they will be - aside from being "honest" and whatever - that should go into deciding who should get loans and what real estate is worthy of a loan.

    Parent

    That perception (5.00 / 2) (#7)
    by lilburro on Fri Dec 02, 2011 at 09:30:16 AM EST
    is most of the problem IMO.  I don't think it's true either.  Or, not true enough to be worth having done basically nothing to fix a very real economic problem affecting everyone.

    Its not like everyone who is facing the threat of foreclosure was taking a stab at becoming a celebrity house flipper.  People buy homes with the expectation that they'll be employed, with a steady income.  I don't think that's such a radical assumption that we have to punish people for it.

    Parent

    They also buy with the assumption (5.00 / 2) (#8)
    by ruffian on Fri Dec 02, 2011 at 09:35:03 AM EST
    that financing agencies are dealing honestly in making loans to qualified people for the collected benefit of everyone making money on good loans, and the prices of houses reflecting that market force.

    No one took into account that some were planning on making money on bad loans, and thus poisoning the whole system and collaterally driving up prices.

    Parent

    Translation (none / 0) (#9)
    by ruffian on Fri Dec 02, 2011 at 09:41:59 AM EST
    "to earn accelerated principal reduction over time."

    = Me to finance industry: I was defrauded in the way the purchase price of my house was arrived at by your manipulated market. I want part of my money back. Please "accelerate my principal reduction over time".

    Parent

    a lot of truth to that (none / 0) (#36)
    by BobTinKY on Fri Dec 02, 2011 at 11:56:04 AM EST
    and it's a good way of looking at things.

    Enron manipulated the California powerr markets by shutting down power plants that were able to be run, artificially decreasing supply in the face of increasing demand. Concumers paid more for power than they would in the absence of Enron's manipulation.

    Banks lent money to any one capable of signing their name to artifically drive demand and inflate home prices, increase origination fees, package mortgage securities for sale, etc.  As a result, consumers paid more, are paying more than they would in the absence of that market manipulation.

    Parent

    and at the same time they bet against those (5.00 / 1) (#51)
    by ruffian on Fri Dec 02, 2011 at 12:28:00 PM EST
    mortgage based securities.  They were going to win with high home prices either way.

    Consumers had a right to know that going in.

    Parent

    And... (5.00 / 4) (#10)
    by ScottW714 on Fri Dec 02, 2011 at 10:13:32 AM EST
     ...there were so many factors that the owners had nothing to do with, like the big one, location.  From the size of the bubble to the state & local finance laws to job markets.  Some people just got screwed who take the same risks as many others.

    The point seems to be that buyers in one location were more responsible in another which is idiotic and pretty sure something you won't see on this side of the political spectrum.

    It's also the issue that really exposed Obama for the conservative, at least financially, that he is.  Letting honest hard working people flail in the wind while their most important asset became their most gripping liability.  And then the shame of letting the very people who caused it run wild with damn near no oversight when they started giving people the boot.

    Obama will worry about it like he did with jobs, when the polling suggests he do something if he wants to get re-elected.  And I for one diod not vote for that mentality.

    Parent

    I think that some locations have more volatile (none / 0) (#30)
    by BobTinKY on Fri Dec 02, 2011 at 11:46:44 AM EST
    home prices is well understood by most. I am pretty sure most people would have expected Fla, NV, Ariz and Calif to be places that would most expose one to the risks of a housing market downturn. Heck it's how I ended up in KY to escape rapidly increasing home prices in Southern New England.  Low prices, low volatility (low in a lot of other measures too, not all favorable). That said it is nevertheless in my self interest that these underwater mortgagees be assisted, certainly more than it is my interest that creditors alone be bailed out time & again.

    Though liberal in many respects, I tend to be very conservative, perhaps better put, risk averse with my money.  Love California and want to live there but could never bring myself to take the economic risk of moving there permanently.  Now that I can afford it, there are no jobs.

    Your points re Obama are well taken.

    Parent

    is he conservative? (none / 0) (#120)
    by TeresaInPa on Sat Dec 03, 2011 at 11:10:44 AM EST
    Or is he just clueless and following the advise of the people Rahm saddled him with?  I really can not figure it out.  
    What I do know is that he will likely say one thing and then do another, blaming republicans and blue dog democrats for his jog to the right.

    Parent
    Earn accelerated principle reduction (5.00 / 2) (#12)
    by Militarytracy on Fri Dec 02, 2011 at 10:35:35 AM EST
    over time?  Dying laughing over here.  Life is short, real people know this, nobody is signing up for servitude.  I grew up singing "Let Freedom Ring".  They screwed up big time with me, they forgot to raise an indentured servant.

    Walking away from a really bad mortgage is a business decision.  Just like shipping jobs overseas is.

    Parent

    "Walking away from a really bad mortgage... (5.00 / 1) (#19)
    by Dadler on Fri Dec 02, 2011 at 11:09:56 AM EST
    "...is a business decision.  Just like shipping jobs overseas is."

    Amen!

    Parent

    With one exception (5.00 / 2) (#38)
    by BobTinKY on Fri Dec 02, 2011 at 12:00:20 PM EST
    companies that walk away from their domestic workers pay no price for doing so, it's just business.  Those who walk away from a loan are punished by those from whom they walk away with sh!tty credit for a considerable number of years.

    Still, resulting bad credit is just another factor in the decision to walk away.

    Parent

    Bad credit is a factor (none / 0) (#107)
    by Militarytracy on Sat Dec 03, 2011 at 07:24:28 AM EST
    You will have to rebuild if having access to credit is important to you.  My daughter lives without a credit card right now though, many people do.

    I have never had to rebuild after a foreclosure.  But in Gillette WY, I was surprised to witness people getting to almost a complete recovery four years after being foreclosed on.  Even though the foreclosure was on their history, they had the income to make regular payments on vehicles and other things in that four year time frame and that weighed in their favor quickly when rebuilding their credit.  They had to sell themselves a little more, but they got it done.

    Parent

    I choose to translate (5.00 / 1) (#52)
    by ruffian on Fri Dec 02, 2011 at 12:30:35 PM EST
    'accelerated principle reduction' as cramdown, haircut, principle forgiveness...

    Put mine on hyper-acceleraton, please.

    Parent

    He is right and you are right (5.00 / 1) (#15)
    by jimakaPPJ on Fri Dec 02, 2011 at 10:54:51 AM EST
    The problem is, who will decide that Person A was not responsible and Person B was responsible?

    Instead of a Bankruptcy Court shall we have a "Responsible Court?"

    And if taxpayer dollars are used, is it fair for people who have been paying for years and owe maybe, $30K or less on the principal, pay for those who bought later and owe more and are underwater or not?

    And if its "legally" admitted that specific property is worth less, then how about the city and county tax base which is usually figured on "fair market value." There would millions of challenges and a huge loss of revenue.

    I see no solution that would be acceptable to all parties. The only practical one that I see is a return to an economy with under 5% unemployment, low FIT and low energy costs which will lead to rising prices.


    Parent

    I see this argument alot (5.00 / 1) (#23)
    by sj on Fri Dec 02, 2011 at 11:32:34 AM EST
    "...is it fair for people ..." and it kind of troubles me.  Life isn't fair and sometimes people need help because of circumstance and sometimes because of mistakes.  

    Conceptually, I can't abandon someone who needs help because they made a mistake.  I've needed help for that reason, and "someone" came through.  And in large populations, there will always be a sort of chronic mistake-maker, if you will.  

    I just don't see the "fair" argument.  I don't.  A just society cares for those who need it.  And hopefully then, that individual can become a productive and contributing member of that society.  If not, well then at least his/her status as non-contributing member of society was not determined because s/he was abandoned.

    BTW, this is not a critique in any way of your personal positions or values.  It's just that your comment reminded me, and I felt the need to discuss it.  Writing things out sometimes helps me clarify how I feel about it.  So thanks for giving me a place to do that.

    Parent

    Your welcome (5.00 / 1) (#56)
    by jimakaPPJ on Fri Dec 02, 2011 at 12:33:15 PM EST
    And I too think people sometimes need help and have no problem giving "help."

    But unemployment insurance and medicaid is one thing. Saying that we should take a class of people and reduce their mortgage principal is something else. The only workable solution is a robust economy.

    And, hopefully, some laws that will prevent this happening again.

    BTW - In '86 ('87? time does fly) we bought a house in Denver. There had been a small energy industry bubble burst and many homes were underwater. It was not uncommon for the seller to to bring cash to the closing and there were many "bank owned/foreclosed" on the market.

    We were moving from Seattle, which had not yet enjoyed its housing price boom, and had only about 18% of the house we purchased price for down payment. In spite of excellent credit and an impeccable job record they demanded Private Mortgage Insurance (PMI).

    About 2 years later I thought the we had 20% equity and wanted the PMI cancelled. The house was appraised and I discovered it was worth about $15K less than we owed. I was devastated.

    But, we trudged onward and we sold it in 2004 for about 2.5 times what we paid for it.

    Sometimes people need to remember the turtle instead of the hare.

     

    Parent

    i see your point, and raise you. (5.00 / 1) (#78)
    by cpinva on Fri Dec 02, 2011 at 03:13:48 PM EST
    the banks (real banks, not simply loan origination companies), regulated by both federal & state agencies, are not, by and large, responsible for the current housing mess. they lent to people based on standard business practices, which required actual documentation of the various sources of income reported, and claimed liabilities, of applicants. this was only after the applicant had already been "qualified" by the real estate agent, and that agent's broker.

    based on that initial "qualifying", the agent would only show properties that met the buyer's ability to pay, both the mortgage and ongoing maintenance/repairs. it also took into account anticipated living costs. then, the loan had to be approved by the lender's "loan committee". it was an onerous process, taking upwards of a month to complete, depending on how quickly third-parties responded. as well, the banks kept the loans, as well as servicing them, they weren't bundling them up and selling them off, for the most part. they had a vested interest in keeping risk to an acceptable level, and foreclosure rates were very low.

    not so in today's wild west environment. completely unregulated origination companies, making loans to people they knew up front couldn't afford them, because they also knew that:

    a. they would make a nice, pre-paid commission on each loan they originated.,

    and

    b. after S & P (or whoever) gave these loans bogus ratings, they'd sell them to someone else.

    these companies had a vested financial interest in churning out as many loans as possible, to practically anyone off the street, regardless of the borrower's ability to repay.

    this is a huge difference from just 10-15 years ago, and is the source of the crash. while borrowers bear some responsibility, they had no direct authority to approve their loans, the lenders did. it was the lender's responsibility to not approve loans to people it was painfully obvious would never be able to repay, ever.

    Parent

    You know (none / 0) (#84)
    by jimakaPPJ on Fri Dec 02, 2011 at 04:01:19 PM EST
    I have purchased 6 homes over a span of 37 years and I never had to be pre-approved before selecting the home and making an offer.

    So I don't know where the first paragraph and a half comes from. I do agree that the "bank" in three cases a Savings and Loan, did thoroughly vet me and it was time consuming and the "banks" kept the loans.

    Or did they?

    They could have sold them to whoever and acted as the collection agent and I would have never known, or cared.

    Were the real estate/loan originators/appraisers too aggressive and make some questionable acts? Yes. Were the actual banks too aggressive? Yes. But when Fannie/Freddie acted in 9/99 to increase the market for subprime loans that was a clear signal that all was well and the Fed wanted people to buy/sell homes.

    When the Bush administration tried to introduce regulations in 2003 to provide some controls, Barney Frank and the Demos opposed it. McCain tried again in 2005 with the same result.

    And this is not a blanket excuse for Bush. He could have tried harder, but the then political capital expenditure wasn't worth it. With 20/20 hindsight it was.

    Now, were the buyers at fault? To the extent that some lied about their incomes and ability to repay the loans, yes.

    For real good look at just how disgusting the whole thing was, read "The Big Short," by Michael Lewis.


    Parent

    "Barney Frank and the Demos" - heh (none / 0) (#93)
    by Yman on Fri Dec 02, 2011 at 08:08:00 PM EST
    Really, Jim?!?  What makes you say it was "the Demos" that opposed it?  You know what would be convincing? - the results of a vote.  That would be fairly conclusive, depending on the provisions of the bill, of course.  Except for one tiny fact.

    Bush and the Republicans jumped on the (very foreign, for them) bandwagon of financial regulation in response the the Fannie scandal.  Of course, guess what happened as soon as the public spotlight moved on ...

    ... so did the new-found interest of Bush and the Republicans in Congress.  In fact, the Republican-controlled Congress never even moved the bill out of committee.

    Oops.

    Parent

    Uh, the proposal was in 9/2003 (none / 0) (#99)
    by jimakaPPJ on Fri Dec 02, 2011 at 10:08:04 PM EST
    well before the burst.

    But you know that because I have provided you links. You have either ignored them or have read them and are now pretending you haven't.

    And I have even noted that the Repubs could/should have done better.

    When the Bush administration tried to introduce regulations in 2003 to provide some controls, Barney Frank and the Demos opposed it. McCain tried again in 2005 with the same result.

    And this is not a blanket excuse for Bush. He could have tried harder, but the then political capital expenditure wasn't worth it. With 20/20 hindsight it was.

    But you know that. So go play your games on someone else.

    Good night.

    Parent

    The proposal was in response ... (5.00 / 1) (#103)
    by Yman on Sat Dec 03, 2011 at 07:15:17 AM EST
    ... to the Fannie/Freddie accounting scandal in July, 2003, not "the burst" in 2008.  Of course, after the heat from the scandal died down, the Bush admin and the Republicans (who controlled both Houses of Congress) did nothing, letting the bill die in committee without a vote.  Yet you blame the bogeymen of "Barney Frank and the Demos".

    Heh.

    Parent

    Follow this (none / 0) (#111)
    by jimakaPPJ on Sat Dec 03, 2011 at 08:55:57 AM EST
    2003 was when the looking problem was addressed the Bush administration.

    2003 is when the Demos served notice they would block any new regulations.

    ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

    NYTimes Sept 11 2003

    2007 is when the bubble started bursting and kept bursting.

    Night follows day.

    You've seen all the links with all the dates numerous times.

    Good day.


    Parent

    Baawaaa (none / 0) (#115)
    by Ga6thDem on Sat Dec 03, 2011 at 09:58:27 AM EST
    the GOP controlled everything in 2003 and they are blaming Barney Frank? LOL LOL LOL. Do you even realize that the GOP controlled congress, the senate and the house in 2003? Of course, this is typical of conservatives. They always blame someone else. There is no way Barney Frank someone in the minority party could have blocked anything the GOP put forth. I guess you don't understand the basics.

    Parent
    Barney and the Demos did what they (none / 0) (#125)
    by jimakaPPJ on Sat Dec 03, 2011 at 03:32:27 PM EST
    did. You can try and cover for them but the facts speak.

    And I have previously and severally noted that Bush didn't expend enough political capital to get the job done.

    So unlike you, I have made a non partisan comment.

    BTW - I found some interesting things in the article on Newt. I notice you haven't commented.

    ;-)

    Parent

    The facts (none / 0) (#132)
    by Ga6thDem on Sat Dec 03, 2011 at 06:39:04 PM EST
    are that the GOP controlled everything and did nothing. The facts DO speak for themselves.

    The article on Newt makes him seem even more cretinous that even I realized. He's a very good grifter though. He's the top clown right now in the polls but if the current GOP trend continues he'll be dropping out in a month or so. Heck Ron Paul is already going after Gingrich on a different level.

    Parent

    Follow this (none / 0) (#118)
    by Yman on Sat Dec 03, 2011 at 10:08:49 AM EST
    The Republicans controlled the House, Senate and White House in 2003 when the Fannie/Freedie accounting scandal broke.  They had the power to enact whatever additional regulation they wanted to enact.  What did they do?  They held some press conferences for political purposes, then let the bill die in their own Republican-controlled committee.

    Sorry, Jim - if you're driving a car and you get in an accident, you can't blame the guy in the back seat just because you don't like him.

    Parent

    You keep repeating yourself (none / 0) (#126)
    by jimakaPPJ on Sat Dec 03, 2011 at 03:34:53 PM EST
    but the Demos did what they did. If you want to say that the Repubs should have overcame the partisan and mistaken opposition of Barney and his Demo buds, be my guest.

    Parent
    "Should have overcame" ... (none / 0) (#127)
    by Yman on Sat Dec 03, 2011 at 04:07:09 PM EST
    ... what opposition?  You haven't cited a single vote showing Dems opposed financial regulation and Republicans supported it.  You've cited a single statement from one Democrat - Barney Frank, saying Fannie and Freddie were not in crisis in 2003 ... that's it.

    Pardon me if I laugh at your "evidence".

    BTW - Frank supported financial reform (including tighter regulation of Fannie Freddie) in 2005, along with Republican Mike Oxley - the Federal Housing Finance Reform Act of 2005.  Of course, it never went anywhere, thanks to the Bush administration's promise to veto it.

    Parent

    Go read the link (none / 0) (#128)
    by jimakaPPJ on Sat Dec 03, 2011 at 04:29:08 PM EST
    I'm done with arguing with you when you don't read links just make claims.

    Have a nice weekend.

    Parent

    Already did (none / 0) (#131)
    by Yman on Sat Dec 03, 2011 at 05:10:59 PM EST
    Which is precisely why I made my comments.  It says nothing about democratic opposition to the bill, other than Barney Frank's quote stating there was no financial crisis in Fannie/Freddie in 2003.

    The Republicans controlled the House, Senate and White House in 2003, yet when the Fannie/Freddie accounting scandal died, so did their sudden interest in financial regulation.  They let the Bush bill die in committee.  When Barney Frank and Michael Oxley proposed Fannie/Freedie reform in 2005, the Bush administration actually opposed it, threatening a veto.  You cite nothing - apart from Frank's statement - which demonstrates Democrats killed any bill in a Republican-controlled committee, House and Senate.  Yet you blame the Democrats when it was Republicans who never even put up a bill for a vote.

    Not a big surprise.

    Parent

    BTW - Here's a link (5.00 / 1) (#104)
    by Yman on Sat Dec 03, 2011 at 07:17:12 AM EST
    ... about the accounting scandal in July, 2003.

    "No charge for the education".

    ;-)

    Parent

    Those helped did not make "mistakes" (none / 0) (#33)
    by BobTinKY on Fri Dec 02, 2011 at 11:50:40 AM EST
    they knew they were playing musical chairs with an ever decreasing number of chairs and would be screwed once the music stopped.  That's why they keep paying the fiddler to keep playing for them, and only them.

    Parent
    I agree (none / 0) (#37)
    by sj on Fri Dec 02, 2011 at 11:56:33 AM EST
    But apparently I wasn't clear.  I am talking about human persons here, not corporate persons.  

    Parent
    What the securitization though (none / 0) (#34)
    by Militarytracy on Fri Dec 02, 2011 at 11:51:15 AM EST
    Investors bought the securities and the profits are supposed to go to them?  If you write down...no profits.  They sold a bunch of this to pension funds because they were rated AAA.

    Parent
    Sorry...what ABOUT the securitizations (none / 0) (#35)
    by Militarytracy on Fri Dec 02, 2011 at 11:51:44 AM EST


    Parent
    So when did (none / 0) (#39)
    by sj on Fri Dec 02, 2011 at 12:02:12 PM EST
    investing become a profits only game?  I've lost plenty on my 401K and other investments.  I actually don't think that's unusual or even unexpected (except that it's at odds with how 401k was sold, of course).  

    Investors should also take their haircut.  The whole "...but... but... but the stockholders!" thing absolutely mystifies me!  When did they become more important than the stability of the company itself?  

    Parent

    Investing isn't a profits only game (5.00 / 1) (#42)
    by Militarytracy on Fri Dec 02, 2011 at 12:07:37 PM EST
    But pension were not allowed to buy anything risky.  The whole system is set up to keep pensions safe, but people lied, broke the law, the rating agencies were paid off and they rated those securities AAA.  Too much focus IMO on homeowners and no focus on what is happening to pension funds or what will happen to those people in the end.  They are already getting hit hard.  If you save the homeowners you have to save the pensions at the same time.

    Parent
    And in this case (5.00 / 2) (#44)
    by Militarytracy on Fri Dec 02, 2011 at 12:12:33 PM EST
    We should have never "saved" the banks....only depositors.  But when Goldman Sachs is our treasury, we will save corporations....not people.  When we realize we should have saved the people instead it will be too late.  Trillions of dollars already disappeared into the "infrastructure" of nothingness, sucked into the black hole of quantdom.

    Parent
    Well, yes (none / 0) (#43)
    by sj on Fri Dec 02, 2011 at 12:11:03 PM EST
    If you save the homeowners you have to save the pensions at the same time.
    Oftentimes, those are one and the same, are they not?

    Parent
    Yes they are (none / 0) (#45)
    by Militarytracy on Fri Dec 02, 2011 at 12:14:50 PM EST
    If and when our leaders face this, then they have to deal with the fact that they saved dead air :)

    Parent
    There are parties with liability (none / 0) (#53)
    by BackFromOhio on Fri Dec 02, 2011 at 12:31:15 PM EST
    seller, packagers, rating agencies...... why take the problems out on homeowners?

    Parent
    The data is out there (5.00 / 1) (#59)
    by ruffian on Fri Dec 02, 2011 at 12:41:36 PM EST
    for the crunching.  No one wants to unwind the MBS trail. Which markets had prices inflated by brokers promoting loans to feed MBS sales?  The lawsuits brought by the investors will show which of the MBS's were unscrupulously at best, fraudulently at worst,  packaged and sold.  Unwind those packages and see where the loans were. I'd be willing to bet they are in particular geographical areas. If you bought a house while that was going on, the price you paid was driven by that practice.

    Hence the rush by the administration and some state AGs to settle those suits before the truth is apparent to the masses.

    Parent

    Your solution (5.00 / 0) (#61)
    by ruffian on Fri Dec 02, 2011 at 12:45:13 PM EST
    The only practical one that I see is a return to an economy with under 5% unemployment, low FIT and low energy costs which will lead to rising prices.

    is not practical at all without a solution to the housing finance problem first. Just not going to happen.

    Parent

    Accelerated "principle" reductions :) (none / 0) (#17)
    by Militarytracy on Fri Dec 02, 2011 at 11:02:39 AM EST
    all the way around.  Shockingly I'm with you Jim.  I don't really see how anyone goes after this,not at this late hour.  Everything is so interconnected too, and at the end of the whatever income is due from these mortgages sits a bunch of retirees needing their pension that is shrinking daily.

    Parent
    The good news is that (5.00 / 1) (#20)
    by jimakaPPJ on Fri Dec 02, 2011 at 11:14:54 AM EST
    us old geezers are dying so the retirement fund demand is shrinking.

    The bad news is that we still have Medicare and aren't dying fast enough.

    The only solution that won't crash the system is a strong economy.

    Now, how that will happen when we have companies like GE moving its imaging division, and killing thousands of high paid jobs, I do not know.

    I do know that the head of GE is Obama's job czar.

    Irony defined.

    Parent

    And the head of GE (5.00 / 1) (#21)
    by Militarytracy on Fri Dec 02, 2011 at 11:20:39 AM EST
    Just downsized my father-in-law.  They have been backing him into a corner now for years, fewer hours, no raises, reduced medical benefits, reduced everything.  They have finally told him to get his $hit and get out now :)  At least they didn't boot him before he was 65, they waited until he was 66.

    Parent
    Oh no (none / 0) (#25)
    by sj on Fri Dec 02, 2011 at 11:34:13 AM EST
    I'm so sorry to hear this.

    Parent
    He's bummed (5.00 / 1) (#26)
    by Militarytracy on Fri Dec 02, 2011 at 11:35:31 AM EST
    But there were indicators for years that GE wasn't a very trustworthy employer.

    Parent
    We aren't exactly close (none / 0) (#28)
    by Militarytracy on Fri Dec 02, 2011 at 11:40:54 AM EST
    He's very conservative and he's an actuary, it has always bothered me that my FIL...the sperm donor of the love of my life is an actuary for GE.  Oh the irony...the old actuary who has never been good with his own money gets lopped off, it burns :)

    Parent
    Here in the 2nd (none / 0) (#54)
    by BackFromOhio on Fri Dec 02, 2011 at 12:32:13 PM EST
    circuit, over 40 is a protected class.  

    Parent
    He's in the 3rd (none / 0) (#139)
    by Militarytracy on Mon Dec 05, 2011 at 08:49:29 AM EST


    Parent
    It would (none / 0) (#18)
    by Ga6thDem on Fri Dec 02, 2011 at 11:05:09 AM EST
    have to specifically target houses bought during the Bush administration as those seem to be almost all the problem houses. Well, you know what? Life isn't fair and if the people who have been paying on their mortgage for 20 years can't understand that this is what has to be done to get the economy back on track and that it benefits them in that way too then there's nothing that can be done and they really don't care about the economy. You're never going to make everybody happy so you are just going to have to do what will probably work.

    Doing nothing like you are suggesting is just going to create more foreclosures so I don't see that as a solution.

    One way that has been suggested is to have an HOLC that would deal just with the people who have this issue.

    Parent

    Foreclosures are not caused (none / 0) (#47)
    by jimakaPPJ on Fri Dec 02, 2011 at 12:16:51 PM EST
    by owing more than the house is worth. "Underwater"

    Foreclosures are caused by people not paying monthly payments.

    Some people stop paying because the house is Underwater. I have no sympathy for them. They made a deal and signed a contract.

    And, of course, if they own the house long enough it may wind up being worth a lot more. They even may make a profit.

    Now, since you say foreclosures will increase, and since most people won't ruin their credit by just walking away and not paying, then the majority of the foreclosures will be caused by loss of jobs/income.

    I have a great deal of sympathy for them.

    But you suggest nothing that will improve the economy. It is past time for Democrats such as yourself to understand that "give aways" have failed to fix the problem and will not do so in the future.

    Parent

    First (5.00 / 2) (#60)
    by Militarytracy on Fri Dec 02, 2011 at 12:41:43 PM EST
    I don't expect people to be pathetic businessmen and businesswomen while only President Obama gets to have savvy businessmen friends.  If your house is underwater and you walk away, that is a business decision.  The rest of the world does not get to get raving kudos for "screwing" others in search of profit while the poor American family must be the martyrs you can always bleed like some forever Jesus on the cross.  That just leads to American businesses being even more predatory.  The infrastructure must be able to suffer too, that is the only way you have a free market Jim.  Everyone has the ability to suffer,  it is our GROUP DESIRE to avoid suffering on all sides of all transactions that creates healthy free markets.  As soon as one element of transactions has no ability to suffer from its actions....you have created a predator.

    Secondly, if you find yourself in the situation where you have decided to walk away, your life is not over....you aren't ruined.  You may have certain challenges for awhile.  I lived through a serious boom bust cycle in a community based on the oil and gas industry in Wyoming.  When many people are affected by an economic downturn and are being foreclosed on, the amount of time that you find yourself "ruined" is a lot less.  There is still a market out there for people who have jobs and can make a payment.  If I find us walking away from this house, I will be creative and I will embrace it.  I have lived in less than stellar accommodations before, and as long as the residence is relatively safe I have only happy memories of the things we did to make our place more of a home.  I was never alone in surviving the less than stellar either.  I always had friends to throw parties with along the way.  We are not our houses or our failed mortgages or property values!  It only feels that way right now as we have all woken up with a McMansion party hangover :)

    Parent

    Personally, I like the ... (5.00 / 1) (#73)
    by Robot Porter on Fri Dec 02, 2011 at 02:01:15 PM EST
    "It's A Wonderful Life" version of the bank/homeowner relationship.  If a homeowner is having a hard time the bank (or "Building and Loan" in the movie) cuts you some slack.  And, if the bank is having troubled times, the homeowner does the same for the bank.  A truly cooperative relationship.

    It's a utopian vision.  But I think it's one we can strive for.  And there are ways to change baking regulations to push things in this direction.  

    Parent

    I hope so (none / 0) (#102)
    by Militarytracy on Sat Dec 03, 2011 at 07:14:32 AM EST
    Because the lack of community involvement and responsibility that banks incorporate into their business model at this juncture is hurting small business.

    Parent
    Foreclosures are not caused (none / 0) (#48)
    by jimakaPPJ on Fri Dec 02, 2011 at 12:16:51 PM EST
    by owing more than the house is worth. "Underwater"

    Foreclosures are caused by people not paying monthly payments.

    Some people stop paying because the house is Underwater. I have no sympathy for them. They made a deal and signed a contract.

    And, of course, if they own the house long enough it may wind up being worth a lot more. They even may make a profit.

    Now, since you say foreclosures will increase, and since most people won't ruin their credit by just walking away and not paying, then the majority of the foreclosures will be caused by loss of jobs/income.

    I have a great deal of sympathy for them.

    But you suggest nothing that will improve the economy. It is past time for Democrats such as yourself to understand that "give aways" have failed to fix the problem and will not do so in the future.

    Parent

    Contracts were made to be broken (5.00 / 4) (#50)
    by BobTinKY on Fri Dec 02, 2011 at 12:25:27 PM EST
    that's why they exist.  To address each party's risk of the other contracting party's non-perfomance. There is no moral issue here.  Borrowers secured loans by the value of an asset, their house.  Give the lender the house the lender agreed to take in the event of non payment, the lender signed the deal the lender should live with it. It's called cutting your losses and is a common business practice, "don't throw good money after bad" is how I often hear it described.    

    Where's the giveaway in walking away?  As you note,a deal is a deal and the contract addresses what happens when the borrower walks away.  

    Parent

    thank you (5.00 / 1) (#55)
    by CST on Fri Dec 02, 2011 at 12:33:00 PM EST
    it is a common and intelligent business practice to walk away from a bad investment.

    The banks themselves do this all the time.  It is stupid not to plan an out.  If you are an entrepeneur making an investment in a business and you don't have an exit plan in case things go south - you are not a good business person.  Mortages have a plan in place for failue.  There is nothing morally wrong about taking the plan that you signed and outlined on paper.  The deal for a mortgage is not "you pay this no matter what".  It's "you pay this, or we take your house back".  There is a reason that language is included and it's a valid option.  It's part of the contract that has been signed.

    Parent

    In many states (none / 0) (#63)
    by me only on Fri Dec 02, 2011 at 12:46:04 PM EST
    you are still liable for the difference between the mortgage amount and the value of your home.  Unless the bank signs off, they can come after you for the remaining amount.

    Parent
    That's (5.00 / 1) (#71)
    by Ga6thDem on Fri Dec 02, 2011 at 01:55:57 PM EST
    why a friend of mine who's in real estate says that sometimes it's really better to get foreclosed on by the bank. Many times here in GA a person trying to do the right thing has gotten really messed up and if they had just walked away, they would have been 100x better off.

    Parent
    yes (none / 0) (#64)
    by CST on Fri Dec 02, 2011 at 12:48:54 PM EST
    but that is also still a part of the business decision, and you are no longer on the hook for the remainder of the mortgage amount.

    It's not a great deal, it's not supposed to be, that's why it's a "failure" option.  But it is a business decision not a moral one.

    Parent

    CST, in some states (none / 0) (#65)
    by me only on Fri Dec 02, 2011 at 12:53:36 PM EST
    you ARE ON THE HOOK for the rest of the mortgage amount.

    Parent
    that's a bit misleading (none / 0) (#67)
    by CST on Fri Dec 02, 2011 at 01:12:24 PM EST
    The banks are typically required to sell the house at auction and it's the "rest" of it that you are on the hook for (if the house is underwater for example).  But it's not like you are paying for the entire house.  In fact, if they make a profit in that sale, they have to give you some of your money back.

    Except in the cases where you can just walk away from the mortgage, then the bank owns the house and can keep it.

    Parent

    I think we are talking around each other (none / 0) (#68)
    by CST on Fri Dec 02, 2011 at 01:15:58 PM EST
    you are on the hook for the "rest" of it yes, minus whatever value they get from selling the house.

    I agree that it's not like you can just throw your hands up and be done with it, but my original point that going into a forclosure proceding is a business decision - stands.  It's often a bad/worst case business decision, but it is not a moral question of whether it's "okay" to go into forclosure.  The process exists for a reason.

    Parent

    Original mortgages are loans (none / 0) (#112)
    by Militarytracy on Sat Dec 03, 2011 at 09:19:37 AM EST
    secured with the home.  It isn't a state issue.  Second mortgages though, you may be on the hook for what is underwater.  I have always assumed that when they changed the bankruptcy laws to the point that they could take our retirements in a bankruptcy, that Wall Street was saying that makes certain debts less risky.  And it probably did for a time, but they sold so many people into indentured servitude and over leveraged that indentured servitude that any loss of risk that the bankruptcy laws momentarily brought to the markets has now been negated.  Our 401k's are mostly $hit too.

    If you don't have the money to pay, how long will those you owe wait?  Are they willing to spend the rest of your life hunting you down when there are thousands of you?  And as the economy continues to be horrible and brutal people are going to get more and more angry about this servitude, to the point that it will have to be forgiven.

    If I found myself in such a position at this time, I'm not going to freak out about anyone saying "I'm on the hook".  There will be no blood from turnips, nor will there be an economic recovery when your people have all been turned into bloodless turnips.

    Parent

    Yes (none / 0) (#57)
    by Ga6thDem on Fri Dec 02, 2011 at 12:34:15 PM EST
    foreclosures are caused by being underwater because people are forced to walk away when the bank won't work with them. If you get a job in another town and you're upside down in your mortgage what do you do? Bank says no to short sale. You're not going to be able to pay two house payments so you let the house go not really having much of a choice otherwise.

    Parent
    No (none / 0) (#58)
    by Ga6thDem on Fri Dec 02, 2011 at 12:36:46 PM EST
    I specifically offer suggestions. You are the one that is suggesting doing nothing and letting the downward spiral continue.

    Pretty soon those people who have been paying on their house for 20 years are going to be upside down too if this is allowed to continue.

    Parent

    No, people that have substantial (none / 0) (#66)
    by jimakaPPJ on Fri Dec 02, 2011 at 01:07:29 PM EST
    equity won't be upside down unless the whole system collapses. If that is your forecast, plant a survivor garden and buy gold.

    My point was that your "suggestions" all revolve around giving money to some people. As a macro comment, that has not worked.

    The "villains" are:

    1. High energy prices. Which Obama likes.

    2. Millions of jobs outsourced. Which neither Obama or the Repubs seem to give a flip about this.

    3. A loss of construction jobs due to the collapse of the housing market. Neither side has a solution and I don't think there is one besides an improving economy.

    BTW - Interestingly enough the largest "shovel ready" construction project in years and years...the Canada/Texas oil pipeline.... has been blocked by Obama responding to one his major support groups, environmentalists.

    Parent
    How did you get this off road? (5.00 / 1) (#113)
    by Militarytracy on Sat Dec 03, 2011 at 09:20:37 AM EST
    Are you in a 4wheel drive?

    Parent
    He's been (none / 0) (#114)
    by Edger on Sat Dec 03, 2011 at 09:22:45 AM EST
    wandering in the desert for at least forty years.

    Parent
    And, (none / 0) (#69)
    by NYShooter on Fri Dec 02, 2011 at 01:21:41 PM EST
     only in wacko-winger land is protecting the environment a bad thing.


    Parent
    I'm a realist (none / 0) (#75)
    by jimakaPPJ on Fri Dec 02, 2011 at 02:08:30 PM EST
    and I believe in triage.

    When times were good and my stocks were in great shape I used them for "goodies." My wife and I took trips, ate out frequently and some other things.

    Now my stocks are not in great shape. The goodies have been reduced.

    In case you missed it.

    When the issue is people having jobs vs the yellow belly sapsucker.... Tough luck dear saps sucker.

    People come first.

    Parent

    Only (none / 0) (#79)
    by me only on Fri Dec 02, 2011 at 03:14:58 PM EST
    in wacko-winger world is the environment better off when regulations are so difficult that we drive production to China.  (Hint that makes the environment worse, just out of the sight of the busybodies.)  But the "environmentalists" pat themselves on the back every time.

    Parent
    Environmental regulations ... (5.00 / 1) (#87)
    by Yman on Fri Dec 02, 2011 at 04:11:59 PM EST
    ... drove production to China?!?

    As opposed to average wages of less than $2,000 year - much less in the 80's and 90's when production really started to move to China.

    Ah, yes ... if only we had environmental laws like China with wages to match.

    Parent

    If Obama doesn't (none / 0) (#91)
    by me only on Fri Dec 02, 2011 at 06:48:49 PM EST
    allow Keystone XL to be built, guess where the syncrude is going to go.  Since you are not very cognizant of reality, I'll just tell you.  They will build a pipeline to the West Coast and send it to China.

    Keystone XL is the environmentalist moment of stupidity.  Canada is going to increase production of the tar sands no matter what the idiots at the NRDC say.

    Parent

    "Not cognizant of reality" (5.00 / 0) (#92)
    by Yman on Fri Dec 02, 2011 at 07:49:45 PM EST
    "Reality" = Stuff you just make up.

    Are you talking about the wildly exaggerated number of jobs that the pipeline company claimed would be created, or do you think there won't be any spills, despite the fact that there were 12 spills in the first 10 months of operation of the current Keystone pipeline?

    Parent

    That is a seriously lousy piece of (none / 0) (#95)
    by me only on Fri Dec 02, 2011 at 09:01:58 PM EST
    reporting.

    As for the 12 leaks, 400 barrels, pfffl.  About 25,000,000 gallons of fuel end up in the rivers and oceans from America every single year.  That 400 barrels is a rounding error.  The pipeline carries 435,000 bpd.

    The proposed expansion is for a pipeline to carry about 700 MMBPD.  At $100/B, that is $25 Billion/year.  It'll happen.  If not Keystone XL, there will be another pipeline.  

    Parent

    Sorry you think so, ... (none / 0) (#96)
    by Yman on Fri Dec 02, 2011 at 09:50:44 PM EST
    ... but not much of a surprise.

    OTOH - the author is an energy/oil industry analyst who does this for a living, vs. ..... well, ....

    ... you.

    BTW - The 21,000 gallon spill in North Dakota may be a "rounding error" in your mind, but any spill of over 50 barrels is classified as "significant", your reassurances notwithstanding.  More importantly, KXL will run through 6 major Texas rivers and the Ogallala aquifer, which supplies water for twenty percent of U.S. irrigated farmland and more than 2 million people.  The EPA review concluded that, given the shallow water table depths and high soil permeability in the aquifer area, - "if a spill did occur, the potential for oil to reach groundwater in these areas is relatively high."  The Clean water Act requires TransCanada to estimate the potential worst-case discharge from a rupture of the pipeline in order to estimate how it would respond to a spill (can you say "Deepwater Horizon"?).  An independent analysis by by John Stansbury, a professor of water resources engineering at the University of Nebraska-Lincoln, concluded that a worst-case spill in the Sandhills region of Nebraska could pollute 4.9 billion gallons of groundwater with a plume of contaminants 40 feet thick, 500 feet wide and 15 miles long, contaminating drinking water as far away as Kansas City, MO.  

    Parent

    The poison went first (none / 0) (#100)
    by Rojas on Sat Dec 03, 2011 at 03:19:37 AM EST
    The calculations are pretty simple. You have to retool a new plant, acquire new technology and master the new process.
    Or you package up the existing plant equipment of which cost of production is known. Set it up in a low labor cost country with no/lax environmental regulations and use you existing technicians to train the new workforce.
    One has risk the other only reward.
    Rinse and repeat.

    Parent
    "The poison went first"? (none / 0) (#105)
    by Yman on Sat Dec 03, 2011 at 07:19:40 AM EST
    Not sure what your point is, or what you mean by "the poison went first".  Are you suggesting (as SUO), that it was environmental over-regulation that drove production from the US to China?

    Parent
    I'm simly telling you (none / 0) (#121)
    by Rojas on Sat Dec 03, 2011 at 11:52:52 AM EST
    that the cost of compliance is one of the items on the spreadsheet. In the first world the cost of compliance can be pretty high. In the third world not so much or not at all.
    Did it drive production the China? Absolutely, I've been in the room when these decisions are made. I've had countless meetings with suppliers over the years who have laid out their options.
    Just review some of those that were the first to go. Metal formers who have to supply their product with a finish, plated or coated, that require substantial use of poisonousness, first world regulated chemicals.

    By the way, while we are on the subject, direct labor is generally a very small line item on the spreadsheet. In most processes one can simply add a level of automation to offset the cost advantage of moving to the third world. It's the cost of first world compliance, administration, engineering and infrastructure maintenance that are the holy grail that these corporations are getting off their balance sheets by relocating.  

    Parent

    Of course it is (none / 0) (#124)
    by Yman on Sat Dec 03, 2011 at 02:28:08 PM EST
    No one was claiming it wasn't.  That being said, protecting the environment, reducing health care costs, and internalizing some of the pollution costs is well worth it, IMO.  SOU's statement and your anecdotes notwithstanding, I'd rather see some actual evidence establishing that it was burdensome (or overly-burdensome in SOU's case) environmental regulations that caused production to move to China, as opposed to all of the other "line items on the spreadsheet".

    BTW - Labor costs are labor costs - I wasn't distinguishing between labor and "direct labor", although I can understand why someone would try to draw that distinction.

    Parent

    How do you internalize those cost (5.00 / 1) (#136)
    by Rojas on Sun Dec 04, 2011 at 11:30:35 AM EST
    if you allow these corporations to simply move it overseas where there is no accountability and no controls? As someone up-thread said "only in wacko-winger world"

    There were a hell of a lot of non wingers who told us exactly what was going to happen when the Walmartization of America was just a little snowball at the top of the hill.

    You know, as complex as the multi-nationals appear, just like their Wall street siblings, the way they respond to stimuli is pretty well known. Would you say American filed for bankruptcy because the were burdened or overly-burdened by their labor and pension cost? It's all relative. When we allow their competitors to unload those costs and continue to compete against them there was never really any question of how the corporation would respond to the stimuli. It was simply a matter of time.

    BTW-It's generally accepted accounting principal that the Cost of Goods Sold are seperated from  Selling, General and Administrative expenses. And on that note I'll leave you with another anecdote.
    Some years back one of our Japanese suppliers came to announce that they had made the decision to move production of one of our products to China to save on labor cost. I had been to the plant in Japan and watched the line run at rate. The line was automated. I quizzed my Japanese counterpart on some of the inputs and outputs. We went over some of the numbers. It did not make sense. There was such a small labor cost contribution that it couldn't be justified economically. Finally, the engineer looked around the conference table and said it is the cost of you and me, and the others in this room that we will save. Managers from accounting, purchasing, engineering, quality, sales and manufacturing were all sitting around the table, the creative class.

    Parent

    Good for the accountants (5.00 / 1) (#137)
    by Yman on Sun Dec 04, 2011 at 12:42:12 PM EST
    BTW-It's generally accepted accounting principal that the Cost of Goods Sold are separated from  Selling, General and Administrative expenses.

    Only I was making no such distinction, because they're simply different forms of labor.  Selling, General and Administrative expenses are simply another labor expense on the spreadsheet.  Whether you distinguish them from direct labor costs or not, they are simply an expense that can cause companies to relocate to China, apart from the original claim, which was that it was environmental regulations that cause production to move to China.

    How do you internalize those cost if you allow these corporations to simply move it overseas where there is no accountability and no controls?

    You can't control the laws of other countries, other than pressuring them to sign/adhere to international agreements.  US environmental laws help internalize pollution costs in the US, not in other countries.  As such, they are not only generally effective, but desirable.  Yes, that gives countries such as China a production cost advantage, but so what?  That's not the same thing as claiming that it was environmental regulations, or unfairly/overburdensome environmental regulations in SOU's case, that caused production to move to China.  Are the costs of adhering to environmental laws a factor in a company's decision?  - sure.  But not even remotely the same thing.  Staying with your preference for anectdotal evidence, my last car had an tire-wear issue - I'd go through front tires in @ 30,000 miles rather than a more typical 40-50K, making the car a little more expensive to operate.  Was this a factor in my decision to get a new car?  Sure, ... a little.  But was it the reason I decided to get a new car?  Not remotely.

    As I said, if you want to support the proposition that it was environmental regulations that caused production to move to China, let's see some actual evidence - something more than anecdotes.

    Parent

    Companies used to advertise (5.00 / 1) (#140)
    by Militarytracy on Mon Dec 05, 2011 at 08:55:11 AM EST
    about being non-polluting, and they gained loyal customers doing so.  I used to love Walmart, in the beginning.  Remember how they made all sorts of things in America, when they were building customer loyalty and attempting to destroy the competition.  It worked too, and now they have destroyed enough competition they don't have to make anything in America.

    If I were in manufacturing right now I would be only looking at production in America and I would be advertising it wildly.  Can you imagine the customer loyalty available out there during this crisis?

    Parent

    Right oh, brother! (none / 0) (#80)
    by jimakaPPJ on Fri Dec 02, 2011 at 03:21:10 PM EST
    ;-)

    Parent
    I guess (5.00 / 0) (#83)
    by Ga6thDem on Fri Dec 02, 2011 at 03:51:42 PM EST
    you won't be one of the ones breathing the toxic fumes you seem to think everybody should have cycling into their lungs 8 or more hours a day.

    Then when you get cancer, we'll just sit you over to side and let you pass on.

    Parent

    yea in this case (none / 0) (#85)
    by CST on Fri Dec 02, 2011 at 04:03:04 PM EST
    "out of sight" also means "out of my water source" or "out of the air that I breathe directly into my lungs"

    Yes I realize we are all on one planet.  But there is a reason kids in poor neighborhoods have significantly higher asthma rates.  And it's not because they live on a different planet.

    Parent

    And that reason is that the (none / 0) (#88)
    by me only on Fri Dec 02, 2011 at 04:19:22 PM EST
    older housing stock has substantially more particulate in it.  Fiberglass insulation breaks down over time and creates a lot of dust.  Poorer homes are also more likely to have dirty, worn out carpet.  Again, this is prone to more dust.  Poorer neighborhoods are more likely to be black, which is a significant predictor of asthma.  So is weight.  Poor people are more likely to have overweight children, another significant predictor.

    Parent
    yes some of that is for that (none / 0) (#89)
    by CST on Fri Dec 02, 2011 at 04:30:27 PM EST
    and some of it is because they are more likely to live near highways, and live near industrial plants, and other polluting industries.

    You can ignore those factors in your list if you want but it doesn't mean they don't exist.

    I get that there are other factors here but let's use the common sense check for a minute.  It is very difficult to breathe in a place that is filled with smog.  It is easier to breathe in a place that is not filled with smog.  Smog is obviously bad for your lungs.

    Also - Erin Brokovich - based on a true story.  Contaminated water is a local issue, not just a global one.

    Parent

    Smog is no longer primarily generated (none / 0) (#90)
    by me only on Fri Dec 02, 2011 at 06:40:43 PM EST
    by industrial facilities.  In California you cannot intake the air and exhaust it "as is."  Any new facility has to discharge air cleaner than the intake air.  Marine and older vehicles emissions are a much bigger problem.

    You can fantasize that the sulfur that Chinese plants dump into the atmosphere doesn't make it to the West Coast all you want.  But you are dreaming.

    Erin Brockovich is a true story.  It involved a pollutant that was discontinued prior to the Clean Air Act and Clean Water Acts.

    Parent

    this is way late (none / 0) (#138)
    by CST on Sun Dec 04, 2011 at 12:45:17 PM EST
    and you may never see it.

    But I'm really confused by this comment.  It seems like you are arguing that the regulations we put in place help protect our water/air quality.  Which I agree with and do not consider a bad thing.

    My point about the Chinese sulfer plants is not that it never makes it to the west coast, it does eventually, we are all on one planet.  But it's a lot worse if you are actually in China.  There is a saying I learned in an enviro class "dilution is not the solution to polution".  And that's absolutely true on a macro scale.  But on a micro scale, it sure helps prevent you and your family/friends from getting sick

    Parent

    You are a lousy guesser (none / 0) (#86)
    by me only on Fri Dec 02, 2011 at 04:09:24 PM EST


    Parent
    Your (none / 0) (#70)
    by Ga6thDem on Fri Dec 02, 2011 at 01:49:13 PM EST
    belief in high energy prices has been debunked time and again. What happened when gas went to $1.80 as you so love to talk about? Nothing. We were shedding tons of jobs.

    It does not involve giving something to people. They are still going to have a mortgage but are going ot have it at the "market rate" instead of the overinflated bank rate. You talk about fair but how fair is that the banks foreclose and then sell the house for 25% less than you paid for it but won't work with you on your loan balance? They keep getting cheaper and cheaper and more and more people are going to be have even more incentive to walk away. Credit rating? A credit rating in a lot of ways is a pretty worthless thing because if you even close a credit card account it will hurt your credit rating. If you pay things off it can hurt your credit rating. With so many people dealing with this, it's probably going to be ignored in the near future.

    Parent

    Yes, we were shedding jobs. (none / 0) (#77)
    by jimakaPPJ on Fri Dec 02, 2011 at 02:23:27 PM EST
    We were in a recession.

    Energy prices are an inversely proportional leading indicator of the economy. Energy prices go down and a few months later the economy goes up.

    Of course the price didn't remain down because Obama had announced in an 8/08 interview that he had no problem with slow price rises. And then at the end of January he rescinded all the actions that both Demos and Repubs had done in the summer/fall.

    Guess what. Prices went up, and the economy continued falling with unemployment U3 hitting around 10%. U6 around 18%. And it has stayed in that neighborhood.

    And if you tell a bank that "someone's" mortgage has been reduced by $20K then you have taken $20K from the bank and given it to the "someone."

    The bank's stockholders have given "someone" $20K.

    If the government gave the $20K to the bank then the taxpayers have given it.

    I am amazed you seem to think otherwise.

    And you signed a contract. If the bank won't work with you, that's life. Will the bank profit more or less? I don't know. You don't know. But the bank has a duty to its stockholders to maximize profits, not redistribute wealth.

    Parent

    Hahahahahahahahahahahaha ..... (none / 0) (#81)
    by Yman on Fri Dec 02, 2011 at 03:25:56 PM EST
    Of course the price didn't remain down because Obama had announced in an 8/08 interview that he had no problem with slow price rises. And then at the end of January he rescinded all the actions that both Demos and Repubs had done in the summer/fall.

    Riiiiiiiigggghhhhhhttttt ...... the oil prices shot back up because Obama, who hadn't even been elected, said - not that he "had no problem with slow price rises"* - but that he thought that a gradual price increase would have been better than the sharp increase in prices which hurt people's pocketbooks and the economy.

    * at least it's somewhat closer to reality than when you used to claim he said he wanted high gas prices.

    BTW -

    And then at the end of January he rescinded all the actions that both Demos and Repubs had done in the summer/fall.

    What are "all the actions that both Demos and Repubs had done" that Obama "rescinded" in January, 2010?  You keep making this claim without the slightest bit of evidence.

    Parent

    Jim (5.00 / 1) (#82)
    by Ga6thDem on Fri Dec 02, 2011 at 03:39:03 PM EST
    has a habit of just making stuff up. Most conservatives do. Their lies get repeated so much it becomes a truth to them. he's not the only one though. I just talked to a friend of mine who's whole talking points collapsed time and again when I showed her the facts. She listens to Fox News and people who don't even watch news are more knowledgeable that the Fox heads.

    Parent
    I have given you (none / 0) (#97)
    by jimakaPPJ on Fri Dec 02, 2011 at 09:58:04 PM EST
    links to unemployment and oil pricing.

    If you think that is "making stuff up" that is your right.

    As for your facts, I never see any, just your claims.

    Try some links.

    Parent

    Your links are like ... (none / 0) (#106)
    by Yman on Sat Dec 03, 2011 at 07:23:18 AM EST
    ... the guy who provided a link to the video of his rooster crowing and the time of the sunrise.

    IOW - absolutely meaningless.

    Parent

    You gave to be (none / 0) (#109)
    by jimakaPPJ on Sat Dec 03, 2011 at 08:45:37 AM EST
    able to view the links and see cause and effect.

    If you cannot I can't help you.

    Parent

    Sure you could (none / 0) (#116)
    by Yman on Sat Dec 03, 2011 at 10:00:59 AM EST
    Provide a link from an expert/authority that provides evidence of causation.  Of course, you can't, because there are no experts that support your theory, just like there are no experts that support the idea that the rooster's crowing makes the sun rise.

    BTW - Exactly what did Obama rescind in January, 2009 that caused the increase in oil prices?  Are you talking about the temporary moratorium on deepwater drilling that happened after the Deepwater Horizon spill months later?

    Parent

    You (none / 0) (#108)
    by Ga6thDem on Sat Dec 03, 2011 at 08:15:36 AM EST
    are just trying to blame everyone else for the problems in this country. I find time and again that the GOP will make excuse after excuse for what they have done.

    You have repeatedly ignored the fact that Obama's energy policy has been "drill baby drill" and has handed out more drilling permits than Bush ever did. You seem to think that some words would have more effect than ACTUAL policy. The fact of the matter is we cannot drill our way out of the problem.

    And opinion pieces from senators do not count as factual. There's a reason it's called OPINION Jim. Most conservatives it seems are stuck in some sort of echo chamber where they repeat the same lies over and over so they come to believe them as truths.

    Parent

    Still NOTHING ... (none / 0) (#94)
    by Yman on Fri Dec 02, 2011 at 08:11:39 PM EST
    ... to back up your story about how "Obama rescinded all the actions that both Demos and Repubs had done in the summer/fall"?

    Tough getting called out on stuff you just make up, huh, Jim?

    Parent

    Why should I keep giving you (none / 0) (#98)
    by jimakaPPJ on Fri Dec 02, 2011 at 10:03:30 PM EST
    link after link. You either don't read them or pretend to not have read them.

    Go play your games on someone else.

    Good night.

    Parent

    Keep giving "link after link" - Heh (none / 0) (#101)
    by Yman on Sat Dec 03, 2011 at 07:02:58 AM EST
    IOW - You can't, because it's just one more thing you made up.

    Parent
    Not gonna let you bait me into a (none / 0) (#110)
    by jimakaPPJ on Sat Dec 03, 2011 at 08:46:42 AM EST
    useless argument. The links were given.

    Have a nice day.

    Parent

    Like I said (none / 0) (#117)
    by Yman on Sat Dec 03, 2011 at 10:02:43 AM EST
    You can't, because it's just a lie.

    Parent
    All you can do is insult. (none / 0) (#129)
    by jimakaPPJ on Sat Dec 03, 2011 at 04:31:39 PM EST
    Shows who you are.

    Have a nice weekend.

    Parent

    It's not an "insult" (none / 0) (#130)
    by Yman on Sat Dec 03, 2011 at 04:48:52 PM EST
    Just a fact.

    You claimed (with regard to oil/gas prices):


    ... at the end of January he (Obama) rescinded all the actions that both Demos and Repubs had done in the summer/fall.

    The reason you can't provide a single link to support this ridiculous claim is because it's a lie.  Sorry if you find the truth insulting.

    Have a nice weekend!

    Parent

    You should learn to Google (none / 0) (#134)
    by jimakaPPJ on Sun Dec 04, 2011 at 09:18:29 AM EST
    I mean the following has only been posted 4 times before today.

    The last time was on 11/15/11 and it was in a thread you were involved in.

    Don't bother to apologize. You knew I was right all along.

    By Tom LoBianco
    -
    The Washington Times
    Wednesday, February 11, 2009

    Facing gas prices near $4 a gallon and a pivotal national election, congressional Democrats allowed a ban on offshore drilling to lapse in September

    But times change, and on Tuesday, the Obama administration - with gas prices roughly half what they were and many Democrats' having been swept into office - blocked offshore drilling plans put in place at the last minute by the Bush administration, including plans to open the national outer continental shelf for drilling.

    Interior Department Secretary Ken Salazar also announced last week that his agency would block drilling on public lands in Utah, criticizing the Bush administration for releasing its offshore drilling plan just days before leaving office.

    Link

    And gasoline prices started their climb.

    Link

    And this was just what Obama wanted.

    In a June 10 2008 MSNBC interview he spells it out.

    Parent

    More lies (none / 0) (#135)
    by Yman on Sun Dec 04, 2011 at 09:28:06 AM EST
    And this was just what Obama wanted.

    Only, Obama doesn't say he wanted higher gas prices - he says he would have better if the rise in prices hadn't been so sharp and sudden.

    I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing.

    See the difference?  It's not that hard.

    And gasoline prices started their climb.

    Good.  Now, since Google has become so easy for you, why not post a single link demonstrating that the Interior Department's move caused the rise in gas prices.

    C'mon, Jim ... just one?

    I'll even help you.

    Parent

    On top of everything else (none / 0) (#123)
    by cal1942 on Sat Dec 03, 2011 at 02:18:02 PM EST
    Trick mortgages nailed many people who did buy houses they could afford.

    The worse the mortgage the higher the broker's commission.

    Parent

    This reluctance to develop a (5.00 / 4) (#14)
    by Anne on Fri Dec 02, 2011 at 10:49:33 AM EST
    principal reduction program that would put mortgages in line with the market, because some percentage or number of irresponsible homeowners would benefit, is a little like saying that it's better to convict 10 innocent people lest one guilty person go free.

    There is no question that there were people who thought they could make a killing in the real estate market, buying and flipping properties for profit as the values continued to balloon.  And there were people who bought more than they could realistically afford.  

    But there is also no question that with the drive to feed the mortgage-backed securities market, and earn obscene commissions, lenders convinced people they could afford these loans, began to sell the crap out of cash-out new loans, cash-out re-fis and home equity loans by telling borrowers they could eliminate all their high-interest debt in one fell swoop in exchange for a lower-rate loan against their home.  

    And while that is true in the abstract, it only works when the lender has accurately represented the terms of the loan, has actually verified income and creditworthiness - which we already have evidence that many just flat-out did not, and even encouraged borrowers to lie on their loan applications - and - the borrower doesn't then begin running up new credit card debt - which many did when they lost their jobs, had to take pay cuts, had a big medical crisis, etc.

    And - news flash - lenders are STILL telling potential borrowers that they can afford to borrow up to the limit of what they qualify for because...their income will continue to increase, their equity will build and Uncle Sam will pay part of the freight by allowing them to deduct the interest and have a smaller tax bill.  Well, maybe that last part is still true, for now, but the other two are fairy tales: incomes are not rising, and as long as home prices continue to fall, equity is not increasing, it's decreasing.

    Using the excuse that it's just not fair to reward the so-called irresponsible borrowers is a way to avoid having to unwind the giant morass that was created by the savvy investment bankers/brokers, avoid inflicting pain on Wall Street and exposing the reality that there are a lot of people who should probably be in prison for what they've wrought with the help of lax and lenient and non-existent regulation - and those people are not the ones who took out the loans.

    I mean, who does Obama and his team think they're kidding?

    Where's the concern over irresponsible bankers? (5.00 / 0) (#22)
    by BobTinKY on Fri Dec 02, 2011 at 11:30:45 AM EST
    they got made whole.  Fraudsters.

    They should have filtered that money given to mortgagors through mortgagees first to even things up.

    They could have given some tax breaks or something to responsible ("lucky") homeowners like me who are not underwater yet have seen equity vanish faster than Rick Perry's lock on the GOP nomination.  That would have been benefit in addition to an improved economy that would have raised wages and provided opportunity for everyone involved, except maybe Krugman's rentiers.

    Parent

    Id'ing property flippers is so easy (5.00 / 1) (#29)
    by Towanda on Fri Dec 02, 2011 at 11:45:02 AM EST
    that the argument about them getting this bennie just exposes how those who use this argument have other agendas.

    Parent
    Who flips more property than the crooks (5.00 / 1) (#31)
    by BobTinKY on Fri Dec 02, 2011 at 11:47:53 AM EST
    on Wall Street who got bailed out?

    Parent
    actually, it isn't the (none / 0) (#11)
    by cpinva on Fri Dec 02, 2011 at 10:35:34 AM EST
    mortgage crisis per se, it's the totally unregulated loan originators, who are at the very heart of the housing mortgage crisis. we can clean up the current mess, but until these fly-by-night operators are either put out of business entirely, or subject to real regulation, the sub-prime scam will simply repeat itself in another decade.

    as well, the private entities (S&P, etc) used to grade securities suffer no legitimate oversight, leaving them free to support said scams, by giving "junk" notes investment grade status.

    combine these two, along with a complete failure of due diligence on the part of the great brokerage/investment firms, and you have "einstein's theory of cyclical economic disaster".

    adam smith recognized, as the basis for his overall theory of free-market capitalism, that people and, by extension, their institutions, will do whatever they perceive to be in their best self-interest. he ultimately recognized the necessity of having restraints placed on the market, to keep it from self-destructing every few years.

    I Am Already Seeing... (none / 0) (#16)
    by ScottW714 on Fri Dec 02, 2011 at 10:58:48 AM EST
     ...those scam artist, I mean 'exotic' loan schemes making a come back in print and TV ads.  They have no shame, flaunting bad credit mortgages or no interest loans, or any of the ridiculous non-sense that lead to the crash.

    Parent
    paying people to get a deal done (none / 0) (#24)
    by BobTinKY on Fri Dec 02, 2011 at 11:33:06 AM EST
    results in a lot of bad deals getting done.  Doesn't matter what industry we're talking about. Obama thinks he is being paid to get deals done.

    We'll see.

    Parent

    The Difference... (none / 0) (#72)
    by ScottW714 on Fri Dec 02, 2011 at 01:58:39 PM EST
     ...being this particular industry was capable of sticking us in a recession.  Used car dealers are probably worse, not by much, but the economy won't collapse when every clown in town releases they are upside down on the car.

    And I highly doubt they are selling those notes as grade A paper on Wall Street.

    Parent

    It was all securitized and sold into (none / 0) (#13)
    by Militarytracy on Fri Dec 02, 2011 at 10:42:41 AM EST
    institutional pension funds.  Nobody wants to address that reality all at once.  They can't.  The outrage would be insane.  They must allow and settle for the leaking balloon, hoping that the leak never reaches such a painful release that it brings about our total outraged and we all grab pitchforks and construct guillotines.
    the bailouts were suppose to prop up investors (5.00 / 1) (#27)
    by BobTinKY on Fri Dec 02, 2011 at 11:36:52 AM EST
    but the underwater homeowners cannot sustain a growing economy putting these investors once again at risk.  

    They need to solve things from the bottom (homeowners)up, not top (lenders) down.  

    Just admit unregulated capitalism is a bad joke, lower everyone's debts, let lenders take a haircut & start over with sensible rules. It's ultimately what will be done, though it might be 2025 by then.  

    Parent

    The pension investment failing (none / 0) (#40)
    by Militarytracy on Fri Dec 02, 2011 at 12:03:44 PM EST
    cannot stand either though.  This stuff was rated AAA, it is sitting in institutional pensions.  You will destroy the pensions going in massively on the mortgage level and writing down mortgages unless the banks pay for the write down.

    People on pension have bills too and contribute to the economy too.  They must get whatever profit they can from what is available and that means allowing us all to fail when we reach failure and paying what we are able to pay until we can pay no more.  The bailouts shored up the banks so that banks didn't fail, where did they shore up pensions? The pensions need their AAA investment or whatever they can get out of it at this point. If the investments completely fail the pensions fail.

    If you start writing down the mortgages in my neighborhood, people who can pay will walk away from paying more for less too.  More failed mortgages.  There is no easy pain free way out.

    Parent

    "unless the banks pay " (5.00 / 1) (#46)
    by BobTinKY on Fri Dec 02, 2011 at 12:16:03 PM EST
    exactly what should have happened.

    The money given to banksters, if it was to be given at all, should have gone first to mortgagees with strings that it could only be used to pay down the mortgage.  Instead, Bush/Obama gave it to banks leaving the homeowners' indebtedness unchanged, except for minor tinkering with the rates which was laughable for underwater borrowers who were in no position to refinance.

    The bailouts at best provided temprorary reprieve from pension funds, they are still at risk due to lack of demand & the resulting depressed economy. The hope, to be charitable, was that the temporary reprieve would jump start the economy.  But that was either stupid or disingeuous or both.  Demand is where you jump start the economy not supply side.    

    Barring some wildy unforseeble, massivley productivity enhancing development, many times that of the INternet, there are only two ways out of this.  Call it what you will old testment jubilee, giant do over, that is one. The other is massive government expenditures to employ people.

    Parent

    for pension funds not from (none / 0) (#49)
    by BobTinKY on Fri Dec 02, 2011 at 12:17:05 PM EST


    Parent
    I agree Bob (none / 0) (#62)
    by Militarytracy on Fri Dec 02, 2011 at 12:45:18 PM EST
    Write down...banks pay

    Parent
    That's for darn sure (none / 0) (#41)
    by sj on Fri Dec 02, 2011 at 12:06:41 PM EST
    There is no easy pain free way out.


    Parent
    HAMP'd | 140 comments (140 topical)

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