The Official U.S.A. In Decline Thread

[WingZ]

WingZ, got to disagree with you...

Greenspan played a huge huge part in all this...and it's not just real estate. When you start looking at the last 100 years, and the role the federal reserve has played in the distrution of our country its pretty incredible.

You disagree that Greenspan was not asked to stay on?

Everyone has a part ,but this wasn't the way Greenspan would've had things play out. Greenspan knew that the retiring baby boomers would place a huge strain on our economy. The balanced budget and surplus we had before #$%^& took office and ran up a bunch of debt to start a war and occupation. This was not in Greenspans plans as to what America needed to be doing with it's money. True we're there now and not too much that can be done ,but the war has placed an enormous strain on our finances and ability to take care of America. We'll have to end up borrowing money for the new economic stimulus plan that's taking place this year.

We're borrowing money from China , Mexico , Japan , GB and others just to keep things going. I hate the thought of us being sold to foreign powers ,but that's exactly what's going on. Will take time to rectify all this and taxes will have to be raised on the rich as well until we're balanced again.

Recession will cause people to see that one person driving around in a Cadillac Escalade XL doing 90 mph on the freeway with the a/c on is not cool hip or fashionable. The very fact that gas guzzling SUVs became the norm showed how irresponsible we'd become.

We'll all have to ( :biggrin: except for you rich guys ) tighten our belts and pay off debt. Start to pay cash again for things. Buy what we need sometimes instead of getting what we want to get things back in balance. It's gonna hurt. Canadians have been living like this for years and look whose dollar is worth more now.

We also need to get back to having something other than cars made in America .. LOL

 

[WingZ]

Yup, and people will feel pretty stupid when it turns out they were right. Again, all you have to do is look at katrina for a perfect example of the system failing.

Wont take more then a few days after the grocery stores shut down.....

Oh Swift those guys are "scary"! Most of them are still training for a "race" war ( and no I don't mean Dems vs repubs ) I kid you not .. LOL

Besides what you're referring to would be the equivalent of the US turning into a third world country. If we get to that the nukes will make sure that groceries are the least of our concern:wink:

 

[MCM]

Greenspan played a huge huge part in all this.....



We have a winner.....................
Give that man a cigar!

 

[WingZ]

Greenspan played a huge huge part in all this.....



We have a winner.....................
Give that man a cigar!

Please elaborate?

 

[Swift]

the world is ending on 12/21/2012...so that should shorten the time span down for some of ya..lol

 

[MCM]

Please elaborate?

Dont really want to, but here it goes..........

It goes back to 1999 / 2000 trying to slow the eco. (market) by raising int rates for no real reason.
(Other than the fact that greenee thought everyone was going to get rich and no would be left to pay all the tax's needed to cover all the BS programs)He wanted a "soft landing"????
So he raised rates, again, and again, and again...... etc etc.
Not seeing results, more, more etc.

Then, well.... Looks like I did it! Better stop the downward spiral.
Will just lower rates a little to bring it back a bit.. hey, its not slowing down? better lower again...and again........ %$#@#@%^&$ times later he managed to kill the greatest stock market the world had ever seen, and borrowing money was at an all time low (think WWII low)
The Stock Market took a hit rivaling 1929.
Overlay the Nas chart over the crash of 29, % wise it was not even close.
Anyone ever figure out why? IRIATIONAL EXUBERANCE? Was the reason he gave. What a bunch of BS.
The stock market takes care of itself. One way or another. Some how its now trying to be controlled by the Gov. with int. rates?
Greenspaz will go down as the Azz hole who killed the market for no real reason. (Aside from it being overvalued in his mind)
During all this controlling the stock market BS with stupid low interest rates, real estate was gaining speed and going higher as many threw in the towel (stock market) and could borrow at stupid low rates.
Money was cheap, So........ prices went up, and up, and up.........
And now, here we are. I knew housing prices would drop, I just hoped the $$$$ would some how go back into the market.
No such luck (so far) the money seems to have vaporized.
Will know for sure in the next 3- 6 months.........
With no real choices headed into the White house, its anyone's guess.
Just a bunch of cartoon characters that we get to try and figure out
who will do the least amount of damage..
Typing at a rapid rate, this may or may not make any sense to you?
Others could have probably said it better...........
Lots of opinions on this, this is just mine................

 

[Ski_Banker]

While we all knew that new consumer credit has also dried up, Citigroup is now not only not issuing new cards/credit, but is canceling credit for higher risk folks. Front page in the companies & markets section of the FT.
_______________________________

From The Financial Times, Sat. 2-2-08:

Egg cracks down on ‘riskier’ clients

By Jane Croft, Retail Banking Correspondent

Published: February 1 2008 20:51 | Last updated: February 1 2008 21:10

Egg, the internet bank, is to withdraw the credit cards of about 160,000 customers in further evidence of a clampdown on riskier consumers by banks.

Egg, which is owned by US bank Citigroup, sent letters to customers on Thursday night telling them they have 35 days to stop spending on their credit cards. After that they will be unable to use their cards and will have to pay down their remaining balance.

Citigroup, which acquired Egg last year from life assurer Prudential, says it has made the move after an extensive credit review of its acquisition.

Citigroup said all those customers affected had a blemished credit record – for example, they had previously missed payments or had gone over their credit card limits.

The move is the first such action taken by a UK credit card issuer.

It underlines that customers with impaired credit records will now find it harder to get credit – whether it be a mortgage or a credit card. Banks have been less willing to lend to riskier customers since the credit squeeze started because of concerns about rising bad debts.

Citigroup’s decision will hit about 7 per cent of Egg’s 2.2m customer base. It is understood a number of customers have already complained.

The bank has said it is not asking for immediate repayment of balances or making any changes to their current terms and conditions or interest rates.

Citigroup said: “Customers affected had a higher than acceptable risk profile. The decision to end these customer agreements was taken after conducting a one-off, extensive risk review of our book, following the acquisition of Egg by Citigroup in May 2007.”

It is understood that Egg’s arrears performance on its credit card book had been worse than Citigroup expected at the time of the acquisition.

Egg is thought to have only started to introduce risk-based pricing for customers shortly before its acquisition by Citigroup. This is common practice among card issuers globally.

Risk-based pricing allows credit card issuers to assess each customer and then offer them a variety of annual percentage rates according to their riskiness.


Edit: BBC news article with responses from cardmembers. http://news.bbc.co.uk/1/hi/business/7224268.stm Sounds like some folks may have been very creditworthy.

 

[Ski_Banker]

And another one... what you don't know can't hurt you, right?


The Financial Times Jan 30, 2008
____________________________________________

Chancellor cedes to Bank over rescues
By George Parker, Jane Croft and Peter Thal Larsen

Published: January 30 2008 10:40 | Last updated: January 31 2008 04:06

Alistair Darling, chancellor, on Wednesday bowed to Bank of England pressure to allow it to carry out limited covert bank rescue operations, as part of a wide-ranging package of measures to avert another Northern Rock crisis.

The move is a sop to Mervyn King, the newly reappointed Bank governor, who claimed a secret aid package to Northern Rock last summer might have saved the business without the humiliating public run on the bank.

Darling proposes legislating to allow the Bank covertly to provide emergency liquidity support for a “short period”, but his consultation paper is dripping with scepticism about whether this would work in practice.

“There is a strong possibility that such lending could quickly become public knowledge,” the paper says.

It warns that a leak of a Bank intervention – as happened with Northern Rock – could “prove a greater risk than a timely, but planned announcement to the market”.

Mr Darling told the Financial Times last October that the days of the Bank doing deals in “smoke-filled rooms” were over, adding: “I think the system is just far more open than it was.”

Government insiders also point out that Northern Rock needed, and still needs, long-term public support of more than £25bn and that keeping such a rescue secret would have been out of the question.

Although Northern Rock is scarcely mentioned in the paper, the Treasury, Bank and Financial Services Authority are clearly trying to remedy the serious regulatory shortcomings revealed by the crisis. That has drawn accusations that the politicians are trying to solve the last crisis rather than spotting the next.

Alex Potter, banks analyst at Collins Stewart, said: “You never have an identical situation – the next crisis could be triggered by credit risk or computer systems, for example, rather than a problem with liquidity.”

Among the proposals for legislation in the summer are dramatic new powers for the FSA to intervene to seize savers’ deposits in a failing bank, including taking control of the bank through a “bridge bank” with new management.

Lawyers expressed concern that the FSA’s controversial new powers, which the Conservatives believe should rest with the Bank, would have a significant impact on the rights of creditors and shareholders.

“I fear that this is a knee-jerk reaction to a unique and special set of market conditions and it would be better to give the markets time to adjust themselves to the lessons learnt in respect of recent events,” said Jennifer Marshall, a partner in the global restructuring group at Allen & Overy.

Mr Darling also infuriated banks by suggesting they fund upfront a multi-billion-pound compensation scheme for depositors.

 

[Ski_Banker]

A few other thoughts:

BIAS.

It impacts everyone's decision making, in different ways and in different amounts. Good decision making, however, doesn't include much bias.

Who do you think makes economic forecasts? Who are these stock research analysts? Who are the senior people at credit ratings agencies that make big decisions about credit upgrades and downgrades?

I'll give you the answer: They're normal people. Like most everyone else. They may get paid more, and are usually brighter than the average guy, but they're by no means maverick superfinanciers. They just want to make a nice living and get home to the family.

So, is that the best person/group to analyze what is going on in the housing market? I can write more, but the point is clear... most people that *can* influence anything, are homeowners and therefore are biased positively.

 

[01blacks4]

Some Midwest states have been hit the hardest. Foreclosures in Michigan and Ohio are among the highest.

I hope you're joking that you want First Franklin to throw you a bone.
If I'm not mistaken, you just had a post about buying a new car.

yeah ohio and MI had high FC'rs because its a toilet to live there...and the blue collor jobs that the union has been overpaying for so long said screw it and left...it had nothing to do with the RE run-up and mortgage rates...

oh yeah just so you dont think i dont know about the midwest..Ohio born and bred...and i lived in MI for awhile too..still own homes in ohio

 

[Ko-nsx]

Vance, I think Silverstone05 has a great point. Why should your mortgage lender lose money (by lowering your rate, or fixing your ARM when it shouldn't be) just so you can buy a 2008 $38k car?

Not trying to begrudge you, it's just that this line of thinking is PRECISELY why the U.S. is going down the tubes.

Yea VANCE!!!! ALSO you being a gold member on nsxprime is another precise reason the U.S. is going down the tubes!!!! If you ask Lud for a refund you'll be on your way to that 2008 $38k car!!!!!:smile:

 

[Ski_Banker]

Yea VANCE!!!! ALSO you being a gold member on nsxprime is another precise reason the U.S. is going down the tubes!!!! If you ask Lud for a refund you'll be on your way to that 2008 $38k car!!!!!:smile:

What in the world are you talking about? Are you sure you're in the right thread?

 

[BD]

Vance, I think Silverstone05 has a great point. Why should your mortgage lender lose money (by lowering your rate, or fixing your ARM when it shouldn't be) just so you can buy a 2008 $38k car?

Not trying to begrudge you, it's just that this line of thinking is PRECISELY why the U.S. is going down the tubes.

Did you read post #6?

You see my friend, the mortgage company is not loosing money by lock in my rate around high 5%, in fact, they will still make pertty darn good money. The whole point is the system created during the housing boom was flawed, and they're trying to do every thing they can to fix the problem. Don't forget, the Feds just lower the rate and they will probably lower it even more.

There is a difference between ripping people off on the interest rate vs. conduct the business with good economic sense.

Yea VANCE!!!! ALSO you being a gold member on nsxprime is another precise reason the U.S. is going down the tubes!!!! If you ask Lud for a refund you'll be on your way to that 2008 $38k car!!!!!:smile:

What are you talking about, Lud offer me a refund already few months ago..:biggrin: BTW, if you haven't read some other threads, I got the S2k already last week. I'm doing my part to help moving the economy:smile:

 

[LJSB]

What are you talking about, Lud offer me a refund already few months ago..:biggrin:

I think I remember that.:biggrin:

 

[Ski_Banker]

Did you read post #6?

You see my friend, the mortgage company is not loosing money by lock in my rate around high 5%, in fact, they will still make pertty darn good money. The whole point is the system created during the housing boom was flawed, and they're trying to do every thing they can to fix the problem. Don't forget, the Feds just lower the rate and they will probably lower it even more.

There is a difference between ripping people off on the interest rate vs. conduct the business with good economic sense.

Yes, I read it. You are incorrect, though, in that the mortgage company will be losing money if it makes some sort of special adjustment to your contract. Whether it is freezing, at lower rates, ARMS. Or just lowering the rate of a fixed mortgage. THE MORTGAGE COMPANY / BANKS / INVESTORS WILL LOSE MONEY.

$ for $. You save $100 in interest, they lose $100 in interest.

 

[BD]

Yes, I read it. You are incorrect, though, in that the mortgage company will be losing money if it makes some sort of special adjustment to your contract. Whether it is freezing, at lower rates, ARMS. Or just lowering the rate of a fixed mortgage. THE MORTGAGE COMPANY / BANKS / INVESTORS WILL LOSE MONEY.

$ for $. You save $100 in interest, they lose $100 in interest.

So what your saying is, since they wouldn't refinance my "first" mortgage to a lower rate, even though it has nothing to do with the Second mortgage, which is secured by another bank, because the combine $$$ of the two is higher than what the condo is currently worth - Even though by refinance the first mortgage without having additional $$ to the original loan?

I don't buy that.

The fact that there are record foreclosure here in S. Cal area basically reflect on the lending rules they created. When I sign my loan doc three years ago, the loan officer told me that I will have "absolutely" no problem refi my property if my credit stays the same. Now those guys are no where to be found.

If the value vs. return doesn't make sense, people will have to do something, regarding the consequence. I have absolutely no problem making payments for a mortgage that is higher than the local rent value, but not by double!!! Considering the fact that they are charging credit card rate on real estate.

 

[MCM]

"The fact that there are record foreclosure here in S. Cal area basically reflect on the lending rules they created."

(2) fold problem.

(1) prices doubled in 5 yrs.
(2) People were buyin with adj. non fixed rate loans.

 

[Ski_Banker]

So what your saying is, since they wouldn't refinance my "first" mortgage to a lower rate, even though it has nothing to do with the Second mortgage, which is secured by another bank, because the combine $$$ of the two is higher than what the condo is currently worth - Even though by refinance the first mortgage without having additional $$ to the original loan?

I don't buy that.

The fact that there are record foreclosure here in S. Cal area basically reflect on the lending rules they created. When I sign my loan doc three years ago, the loan officer told me that I will have "absolutely" no problem refi my property if my credit stays the same. Now those guys are no where to be found.

If the value vs. return doesn't make sense, people will have to do something, regarding the consequence. I have absolutely no problem making payments for a mortgage that is higher than the local rent value, but not by double!!! Considering the fact that they are charging credit card rate on real estate.

Vance, as a business owner, you should know as well as anyone "if it ain't written, it ain't worth anything." So, if your lender/broker/RE agent told you that you would have no problem refinancing, they are making baseless claims. The fact of the matter is, your mortgage is a contract and the only way you can (should be able to) get out of it is if you refinance or pay it off.

This whole issue is why there is an uproar over "fixing ARMS" etc. as a way to help solve the housing mess. And, while I do think that something along these lines should be done, I recognize that it fundamentally breaks the sanctity of the business contract.

I do wish you the best, though -- not trying to begrudge you. :smile:

 

[BD]

Vance, as a business owner, you should know as well as anyone "if it ain't written, it ain't worth anything." So, if your lender/broker/RE agent told you that you would have no problem refinancing, they are making baseless claims. The fact of the matter is, your mortgage is a contract and the only way you can (should be able to) get out of it is if you refinance or pay it off.

This whole issue is why there is an uproar over "fixing ARMS" etc. as a way to help solve the housing mess. And, while I do think that something along these lines should be done, I recognize that it fundamentally breaks the sanctity of the business contract.

I do wish you the best, though -- not trying to begrudge you. :smile:

Hey, I appreciate your input. This was my very first purchase and I fell into the unforeseeable trap like most others. The good thing is that even though my current business is not doing as well as the old location, I can still stay afloat. First Frankly was the first to contact me to see if I needed help, they supposedly is worrying that I may be going the way of foreclosure because I'm late on my payment (after 15 days grace period, but not before 30 days late); they told me it is possible to locking the rate for 5 years (government program) but the only thing that is preventing me from making this happen is that I'm self employed, and they can't do any thing unless I have "paid stubs."

I do have another property in the Seattle area which is still growing in value, I can always sell it and reposition the equity into my condo in California, but I will have to wait till my capital gains period is over, which is is six months. Of course I rather not do that because it is a money maker at the moment, and I do want to move back up there in the future, and having a condo there is not a bad idea; also it is harder to qualify for a loan. Banks statements alone can't get the deal done any more. However, if I must sell it to break even down here, I will.

Part of being on Prime is I get to meet some good smart people who can offer good advise; I appreciate it.:smile:

 

[SilverStone05]

yeah ohio and MI had high FC'rs because its a toilet to live there...and the blue collor jobs that the union has been overpaying for so long said screw it and left...it had nothing to do with the RE run-up and mortgage rates...

oh yeah just so you dont think i dont know about the midwest..Ohio born and bred...and i lived in MI for awhile too..still own homes in ohio

Man...someone having a bad day? :wink:

 

[nicholas421]

I've been doing a lot of business overseas, primarily China. My current client shut down 15 US sites and moved their manufacturing to Asia. Many companies are dumping billions into China because on paper, the returns are enormous. The problem is, it's nearly impossible to get the money back. It's not like you can just say "ok, i'm ready to cash out, give me back my money".

the only way we can get out of this in the long term is to somehow keep the money within the US. i use to roll my eyes at the "Buy American" campaigns of the 90s. now i know better. everyone sell your nsx's and buy new corvettes.

 

[WingZ]

now i know better. everyone sell your nsx's and buy new corvettes.

Easy for him to say as he drives a Ferrari

 

[BD]

Easy for him to say as he drives a Ferrari

Sell the Ferrari, buy a Corvette, a Viper, and house paid in full some where in middle Texas...lol:biggrin:

 

[Ski_Banker]

Not that this thread is "timely" or anything.




Except that it is, timely.

 

[Ski_Banker]

Yea VANCE!!!! ALSO you being a gold member on nsxprime is another precise reason the U.S. is going down the tubes!!!! If you ask Lud for a refund you'll be on your way to that 2008 $38k car!!!!!:smile:

I still don't know what the hell you're talking about here. I'd love to hear an explanation though.