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Kuros
Joined: 27 Apr 2004
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 Posted: Mon Feb 14, 2011 9:58 am Post subject: |
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| jaykimf wrote: |
| mises wrote: |
We've had disagreements on this forum about the total size of the bailouts. Here's a PBS piece that puts the total cost at 12.8trillion. This includes guarantees, asset purchases, lending/borrowing mechanisms in addition to the TARP funds.
http://www.youtube.com/watch?v=CPgwNdzvhG4
That's around 100% of US GDP. |
If the Government lent Citibank $500 billion and the bank paid it back with interest, did the loan actually cost the government $500 billion? 12.8 trillion may been the total potential liability, but I wouldn't consider it the actual cost. The true actual cost won't be know for years. (if ever) |
Its just like debating how much the Iraq War cost. The specific estimates are controversial, but most agree that the money was wasted. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Mon Feb 14, 2011 10:09 am Post subject: |
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| Kuros wrote: |
| jaykimf wrote: |
| mises wrote: |
We've had disagreements on this forum about the total size of the bailouts. Here's a PBS piece that puts the total cost at 12.8trillion. This includes guarantees, asset purchases, lending/borrowing mechanisms in addition to the TARP funds.
http://www.youtube.com/watch?v=CPgwNdzvhG4
That's around 100% of US GDP. |
If the Government lent Citibank $500 billion and the bank paid it back with interest, did the loan actually cost the government $500 billion? 12.8 trillion may been the total potential liability, but I wouldn't consider it the actual cost. The true actual cost won't be know for years. (if ever) |
Its just like debating how much the Iraq War cost. The specific estimates are controversial, but most agree that the money was wasted. |
I would agree that the Iraq war was a tremendous waste of money. However if the banks have or will repay their loans with interest, I don't agree that the money was wasted. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Feb 14, 2011 10:25 am Post subject: |
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| They pay their loans to the government with loans from the government. |
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mises
Joined: 05 Nov 2007
Location: retired
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jaykimf
Joined: 24 Apr 2004
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| Posted: Mon Feb 14, 2011 11:45 am Post subject: |
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| mises wrote: |
| They pay their loans to the government with loans from the government. |
bsnwar |
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bucheon bum
Joined: 16 Jan 2003
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jaykimf
Joined: 24 Apr 2004
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| Posted: Mon Feb 14, 2011 2:09 pm Post subject: |
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I saw that this morning.
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| Seattle is down about 31 percent from its mid-2007 peak and, according to Zillow�s calculations, still has as much as 10 percent to fall. Mr. Humphries estimates the rest of the country will drop a further 5 and 7 percent as last year�s tax credits for home buyers continue to wear off. |
Actually that's much better than the link mises recently posted which predicted a further 23% decline. I don't know which , or if either of those predictions will prove to be accurate. Only mises and his kind seem to know for certain that the worst possible scenario is inevitable. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Feb 14, 2011 2:46 pm Post subject: |
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| Quote: |
| Only mises and his kind... |
Aww man. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Feb 15, 2011 7:07 am Post subject: |
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As I begin to enter the world of foreclosure and consumer protection, I must say that while programs like HAMP have been disappointing, I have been impressed with the Truth In Lending Act (TILA).
TILA allows a homeowner to rescind a loan, provided:
-It was a consumer credit transaction
-Involving a non-purchase money lien/interest (includes refinancing and equity loans)
-On the consumer's principal dwelling
-The loan took place w/in 3 years
-And there are material errors in TILA required disclosures
Rescission is powerful. It places the homeowner back where he would have been had he not taken out the loan. All interest payments made are credited towards the principal balance. This can be a life-saver in foreclosure proceedings.
My favorite part about TILA: the client can recover attorney's fees. As some of you may know, just about every mortgage binds the borrower to pay the bank's attorney fees for any litigation on the note. TILA puts the power back into the consumer's hands. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Feb 15, 2011 3:23 pm Post subject: |
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The Truth in Lending Act sounds like a powerful and important regulation that helps consumers out a lot. How unsurprising, then, that the Federal Reserve Board wants it changed.
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The Federal Reserve Board is proposing changes to Truth in Lending mortgage regulations that consumer groups say would hurt homeowners facing wrongful foreclosure.
The controversy revolves around a clause that gives consumers the right to unwind an illegal loan through "rescission" for up to three years after the loan was signed.
A proposed change in the regulations by the Fed that was released last summer would require homeowners to pay the entire amount demanded by the creditor before the creditor is required to cancel the security interest in the home -- basically making the rescission rule useless. the Federal Reserve Board wants it changed.
"Instead of informing consumers about the terms of their loans as Congress intended, these proposals would allow broad misstatements of loan terms through new tolerances that are without statutory authority," the Consumers Union, National Consumer Law Center, the Center for Responsible Lending and a dozen other advocacy groups wrote in a letter to the Fed.
The letter pointed out that "the great majority of cases" brought to stop a foreclosure include rescission claims.
A New York Times editorial published Sunday said that requiring a borrower to pay off the remaining principal before the lender gives up its security interest "would be clearly impossible for troubled borrowers." "So," the paper reasoned, "the Fed's proposal would benefit the creditor who violated the law rather than the borrower, paving the way for foreclosures that otherwise could be avoided."
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A Federal Reserve spokeswoman declined to comment on the proposal Tuesday, but in a written explanation the Fed said that the new regulations would "reduce uncertainty and litigation costs" for creditors.
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 15, 2011 9:23 pm Post subject: |
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LA:
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| Los Angeles County took a big hit last month. The median price dropped from $330,000 to $300,000! A 9 percent hit in one month! In September of 2010 the median LA home was going for $340,000 so we are now down over 10 percent in a matter of four months. |
http://www.doctorhousingbubble.com/southern-california-real-estate-yoy-decline-in-price-los-angeles-10-percent-decline-4-months-30-percent-cash-buyers
Good analysis of the large structural and generational problems:
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| You also have many younger households that are holding off on having children and aren�t drawn to the allure of the suburbs. This may or may not be part of your situation but younger couples of today have different tastes from those of past generations. The housing bubble was largely a baby boomer phenomenon. We have a new dynamic where young working professionals are coming out with student loan debt that previous generations never had to contend with. Many young professionals have a mortgage before they even buy a house because of the burden of student loan debt. The generations of working at a blue collar job and affording a home in a good part of town seem long gone. In order to compete, many are finding it harder to avoid debt. Yet debt is now harder to access because the economy is over leveraged already. In other words, it is hard to see how interest rates don�t rise in the next few years. It is also hard to keep this model going because it is unsustainable. To iron out these dislocations, either incomes need to go up (no evidence of this with a 23 percent unemployment and underemployment rate in the state) or home prices need to go down (this is actually happening). |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Feb 16, 2011 5:48 am Post subject: |
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| Fox wrote: |
The Truth in Lending Act sounds like a powerful and important regulation that helps consumers out a lot. How unsurprising, then, that the Federal Reserve Board wants it changed.
| Quote: |
The Federal Reserve Board is proposing changes to Truth in Lending mortgage regulations that consumer groups say would hurt homeowners facing wrongful foreclosure.
The controversy revolves around a clause that gives consumers the right to unwind an illegal loan through "rescission" for up to three years after the loan was signed.
A proposed change in the regulations by the Fed that was released last summer would require homeowners to pay the entire amount demanded by the creditor before the creditor is required to cancel the security interest in the home -- basically making the rescission rule useless. the Federal Reserve Board wants it changed. |
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I have good news about this.
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| the Board has determined that proceeding with the 2009 and 2010 proposals would not be in the public interest. Although there are specific provisions of these Board proposals that would not be affected by the CFPB�s development of joint TILA-RESPA disclosures, adopting those portions of the Board�s proposals in a piecemeal fashion would be of limited benefit, and the issuance of multiple rules with different implementation periods would create compliance difficulties. Accordingly, the Board does not expect to finalize the August 2009 and September 2010 proposals prior to the July 2011 date for transfer of rulemaking authority to the CFPB. |
Elizabeth Warren heads the CFRB and is far less likely to try and gut TILA. |
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Feb 18, 2011 7:12 am Post subject: |
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http://money.cnn.com/2011/02/16/news/economy/middle_class/index.htm?iid=MPM
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How the middle class became the underclass
NEW YORK (CNNMoney) -- Are you better off than your parents?
Probably not if you're in the middle class.
Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.
In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.
Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust.
Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots.
But there's more to the story.
... |
The ariticle asserts that deregulation, globalization, the decline of unions (private sector) and tax cuts are largely at fault. I agree. The neo-liberal, neo-conservative revolution has been a tragedy. A whole country almost ruined in a generation and a half.
It is very unlikely this will be reversed. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Fri Feb 18, 2011 11:40 am Post subject: |
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Grousing about globalization and the effect of technology is as productive as howling at the Moon. North America needs to:
(1) either embrace single-payer health care, or get government entirely out of the business of health insurance.
(2) reinstate meaningful progressive taxation, which will mean slashing the ridiculous clutter of deductions in the tax code and accepting the Bowles-Simpson plan to tie mandatory marginal rate increases for every future deduction.
(3) reign in defense spending to 2.5% of GDP. The only reason it might be that high is to keep a large standing army, which I consider to double as an effective work-welfare program. Prioritize it so personnel salaries/benefits > military-industrial welfare.
(4) subsidize exports over the next decade, with declining investment at the end. Canada needs to lessen its inevitable dependence upon the US, and US companies need to learn to look abroad, particularly to Asia and South America.
(5) destroy public sector unions. The public sector is already burdened enough by social justice considerations, but this further handicap makes it nearly impossible for them to compete with the private sector.
(6) housing reform. Obama finally seems to be winding down Fannie/Freddie, which is good. My understanding is that Canada is starting to have problems here as well. Remove government subsidies from the housing sector, although allowing some presence for emergency relief might be prudent.
(7) become fiscally responsible. $1 trillion deficits are unsustainable. Left-wing American exceptionalism a la Krugman's 'deficits-don't-matter' needs to die. This will mean raising taxes, cutting services, and entitlement reform.
( do all the above within 5-10 years. The US is politically inefficient, and Canadian government, while better run, could also use improvement. In the US, a mixed government will help, although the Canadians may need a real majority to get things going, I'm not sure. |
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