What do you think about the current financial situation?

^hope I didn't come off as a bi*ch there. I really do appreciate your response.  Building is not an option for me, I can't get a loan on vacant land, I'd need to have a lot more money down.  Plus I don't have the money to build, I'd have to take out a seperate construction loan. I'd like to build in the future, but for right now, I'd rather get something that needs a little work, and just do that.  It's my first personal investment.

I plan on spending more time to post more about what was discussed in the subprime lecture that I went to today, but for now, here's some food for thought....

He brought up the idea, as part of a long term solution, to have equity insurance based mortgages.  Basically what he meant, was that if the economy is stable for a period of time, and someone holds lets say...20% equity in the home they currently live in, that if their city/state/region were to have a period where home values depreciated (like michigan a couple of years ago), their mortgages would adjust accordingly.

so if you have a 500k house. and you owe 400k on it.  Then the market drops significantly, and your house is worth 400k. Rather than going to 0% equity in your home, your mortgage balance drops, to maintain equity in the home. So your mortgage balance would drop to 320k.  This makes it so that you maintain your 20% equity, which gives you options to refi or sell...and if the market then went back up it would adjust accordingly as well.

There are a lot of questiosn to be addressed, and my example was pretty vague, but it's something to think about.

as a college freshmen i am far from an expert on the housing crisis.....


but where would the money come from? i know its all "mythical money" in the first place, but when the market adjusts, people are going to loose equity.....

i dont know, it is going to get ugly, and ALLOT of people are going to pay through the ass for the bad decisions they made earlier. 

it just sounds like a bad idea for the government to adjust the price of a a house and say "your house was worth 300k, now its 200k. and you only owe 100k instead of 200k"


i will have to read up... 

o does anyone have any idea as to what is going to happen to mortgage rates? go sky high? or fall?

i think there's still some parts of alaska that you can homestead on

no, silly.

It's insurance, it would come into play when something happens in a region that dramatically decreases home values.  Whether it be natural disasters (earthquakes, hurricaines, etc.) or economic disasters.

I imagine there would be some premium involved with these types of mortgages. Although one could argue that the people needed them would be those who couldn't afford an extra cost, in which case, one might look at government subsidies.

And, there would probably be some sort of review time frame. Where your house is reviewed every couple of years, and if it has appreciated your premium would go up because they are insuring something that is now more expensive?

Again...it's a thought. Details would have to be worked out, but I thought it was an interesting idea, that quite possibly had merit.

it was a preemptive anti-anti-bush attack.
Also i saw something funny on tv today. "bush economics"
What the hell is bush economics? What has bush done that has drastically changed our markets?

do you think tax cuts, with a war, and spending like there's no tomorrow might have had an impact on the current financial situation?

not unless you have absolutely no idea what the current financial situation is...

and just since im curious, give me one reason how tax cuts, with a war, and spending like there's no tomorrow had an impact on the crisis.

what did we learn from Vietnam? You go to war, you have to pay for it -- or risk severe inflation

we've gone to war, without means to pay for it, what is the concequence?

what is our financial situation again?



Like John McCain, i'm no expert on economics, so maybe i'm wrong, but it seems logical.

Laffer Curve anyone?


i KNOW mike knows what im talking about, the rest of you guys, Google it.

you are wrong cuz i dont think you know what the curretn financial situation is man. you posed a seemingly retorical question yourself, id like to see you answer it. Do you know what our current situation is?

true homie taxes suck dick but idk if thats the issue here.

is that a tag in? Are you gonna try to answer the question?

This says it all.

What i've gathered from this thread is that we're facing severe inflation -- 700 b dollars printed off by the government = inflation of the USD is this not the underlying concequece of our 'current financial sittuation'

More than that we've got the banks trying to reposes the money they've loaned out on peoples houses which ended up halting on gathering money, we've got a stock market that is continually falling as more and more investors are pulling out. We're seeing other countries follow suit, taking control of banks and lending institutions.


We've acted like the past 6 years have been a 'time of peace',  I mean i've NEVER had to change my style of living, never had to make any sort of sacrifice for the war, but you've got to, it's innevitable, and here it is

they better not be using my seven hundred dollars!!!

can you please link how going to war and the financial situation in a step by step cause and effect process? I'm REALLY curious.

 Lets make a proposition -- what might the situation be if we hadn't gone to war.

well right off the bat lets assume that had we not gone to war perhaps we'd have been able to make investments on more than just construction. Lets say we spent the money on domestic 'goods' infrastructure, green technology, education.

This change would have put the wealth of the nation in more than just the 'housing basket' if you will. When house prices started to decline the overall 'road bump' wouldn't have had such a devistating effect because our assets would have been spread out.




second, lets assume that while undertaking a different course of action, we'd spend our money a bit more responsibly, and we'd not have such tremendous debt. Lets say that perhaps we could have maintained the Clinton surplus, even with a 'crisis' such as that we face today, if our government wasn't broke up the yin-yang then i wouldn't suspect that having to drop a bit of money into the public sector would be as big of a deal.

Isn't it the case that a printing off of a new $700b to pay for shit will result in inflation, what would be the inflation if the treasury was able to simply release old money back into the system? still inflation? My intuition is no. (you can correct me on this i'm sure)




So my links for you -- Going to war meant that our government wasn't paying any attention to the happenings here in the US. Result was that our only investments during this time is building houses, and construction -- read also: lots of the sub prime mortgages. With all our assets in one basket, when the basket drops, we're fucked. I'm going to let you draw all the economic cause effect conclusions, so i don't make the errors, but lets use this as the situational hypothisis. Perhaps you can even make a comparison between what might have been if we didn't go to war, and what is the case now, and let us know ecconomically what might have been the case.



Instead of just trying to make the rest of us look like idiots, why don't you spend some time educating us in a non-dick-assholeish way?

The problem was set underway long before the war started. The war is a complete non factor in this situation. There is no possible way that the war could have effected whether or not poor people took out mortgages and whether or not poor people could pay on time....

You realize that what happened in the market is independent of government right.... What do you mean by "our" assets? Who is this collective "our"? Had we [the government] invested in other things other than a war, that still has absolutely no effect on investment banks from selling MBS's.... So no matter what we [the government] invests in, it doesnt affect what independent banks invest in...

why is it that everyone just likes to prove everyone else wrong in this thread? Why does everyone come in here and just spit off what they know, or think they know. Or what they've learned? Why don't people come in here and come up with constructive and original thought.  Perhaps original ideas on what solutions they think might work? At least that would be interesting.

For instance. I was talking to my bf the other night, and I said, why don't they come out with a loan, a 30-year fixed loan (or maybe 15, but that would just increase payments) anyway, that is offered at a decent interest rate (say 6 or 6.5%), and offer it to all of those who are now in adjustable rate mortgages that have adjusted out of control.  So it's just a loan for subprime borrowers, that allows them to be qualified for conventional rates, but it is only offered to those who are grandfathered in from the subprime crisis.  I don't think others would complain because it wouldn't be like they're given an unbelieveable loan that no one else could get, they're just getting a conventional loan.

That way, the loans wouldn't default, and people could keep their homes.

It seems unconstitutional that many of the people who were qualified for home loans 5 years ago, who were told to refinance when their rate started to adjust, are now screwed simply because they're no longer qualified for home loans.  All of these people who are no longer qualified to obtain a home loan, but HAVE one, should have the ability to refinance.

fail

I don't know about unconstitutional however, I want to know why we haven't seen this idea on the fore front. 

I think that the supposed cause (sub prime mortgages) should be fixed first.  As mentioned in other threads, let the bad banks fail, those mortgages that are also bad will be picked up by someone and someone will realize that it would be better to negotiate some type of new payment than let the home go to foreclosure.  At least thats what I think.

ahh another victim of a stupid econ professor.

econ profs love to pass their insane, anti-gov rantings on to their students.

this whole mess is because the gov didn't regulate these companies, not because americans love to spend.  the companies were greedy and eager to make loans to people who shouldn't have them.  its like selling cigarettes to minors: if the gov would allow it, they'd do it.  its an untapped market which means more money.  its greed at the most basic level.

this whole mess proves that the gov needs to regulate business more.

or its because they [the companies] were forced to [give out loans to poor people]....