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Re: Greedy Capitalistic Pigs

By: killthecat in POPE | Recommend this post (0)
Tue, 01 May 12 3:12 AM | 57 view(s)
Boardmark this board | (The) Pope's for real stock market report 		Msg. 57156 of 65535
(This msg. is a reply to 57152 by Zimbler0)
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Not bad, Zim.

WASHINGTON (AP) — The American dream of homeownership is at its lowest point in 15 years, the latest evidence of a housing market still far from recovering five years after the housing crash.

New figures released Monday by the Census Bureau show the rate of U.S. homeownership fell in the first three months of this year to 65.4 percent. That's down from 66.4 percent in the first quarter last year.




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The above is a reply to the following message:
Greedy Capitalistic Pigs
By: Zimbler0 in POPE
Tue, 01 May 12 1:47 AM 		Msg. 57152 of 65535

Dear Michelle Singletary,
Several times now I have read where you ‘chastise’ ‘predatory lenders’ for the current economic mess. Kind of like it is all their fault and they should not have loaned folks the money to buy houses they could not afford.

I truly wish you were capable of thinking like a capitalist for a few hours and then maybe you could figure out what really happened – and who we need to tar and feather for it.

You are right in that a whole lot of people borrowed a whole lot of money via subprime mortgages which never should have been made and when those people failed to make their payments that is when the house of cards collapsed and the economy went into the toilet.

However.

I am 54 years old. And, seems like, most of my life we did not have this sort of problem. For most of my life the standard was one puts twenty percent down to buy a house. Oh, there were VA loans for our veterans and a rare few could get a ‘subprime’ mortgage . . . But one did not see the rampant stupidity one saw in 2007.

So, what happened?

Two things. Both by jackasses in Washington d.c. ‘They’ directed Fannie and Freddie to buy lots of subprime mortgages. And they de-regulated the banking, insurance, and securities industries.

Used to be banking and insurance companies and wall street were strictly barred from operating in each others areas. Till congress removed the barriers and now I got my Credit Union trying to sell me life insurance and my bank trying to manage my retirement assets for me.

I suspect (though I can’t prove it) my former mortgage company ‘re-assigned’ my home owners insurance to another company so’s they could get a kickback (or at least a share of the profits) . . . which would go a long ways towards explaining the way home owners insurance premiums skyrocketed in recent years. (And most people never see it – it being buried in the escrow account statements.)

And my bank as my retirement account holder? Trying to sell me on buying the assets most inappropriate for my status because they will turn the bank the biggest profit. (I miss the old days when my bank would try to sell me on FDIC insured.)

But I digress.

The mortgage makers of the 1970’s and 1990’s (1980’s savings and loan crisis – brought to U.S. by congressional meddling they had no business doing) are the same sort of animals we had in the early 2000’s . . . the difference? Congress told Fannie and Freddie to buy subprime mortgages. Wall Street – those experts in buying and selling paper regardless of the underlying value – also got into the act. ‘They’ were buying mortgages and packaging them into ‘Good as Gold mortgage backed securities’ and reselling them. In short, there was a HUGE market for mortgages that didn’t exist before.

It didn’t take long before nobody was really checking as to whether or not the mortgage was likely to be repaid. Wall Street certainly didn’t care. And all the mortgage makers had to do was get a signature on the dotted lines and shove the money into their pockets.

I can’t fault the lenders for trying to make a buck. Especially when I remember we also had ‘house flippers’ who would have found it impossible to make the mortage payments had they failed to resell the property. I do blame the turds in the United States congress who removed the barriers and enabled the stupidity to happen.

Assignment for you.

What were the legislative barriers that used to be in place segregating the bankers from the insurance companies from wall street? When were they emplaced? When, by whom, and how were they repealed?

I suspect that they were enacted in the wake of the Great Depression. Which was the result of another prime example of capitalistic greed and excess.

Lastly, the answer is not more regulatory activities from Washington D.C. It is not more regulatory bodies trying to ‘control’ something they haven’t a clue as to how works. No, we need to go back to what worked.

We need the banking industry segregated from the insurance industry segregated from the securities industry. We need Fannie and Freddie – but they need to be severely limited to buying only the most credit worthy of mortgages.

Most of all we need to brand “You will NOT repeat the mistakes of your predecessors!” across the butts of all existing and new congress critters. We need to have that printed across every mirror in the Capital building. And, we need a handbook explaining some of the mistakes past congresses have done and why they should not repeat them.

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