Positive Obama thread

Shirley, I'm putting you on ignore...all you do is create trouble here and take attention away from the real issues.  I recommend the rest of you do the same.

I am also going to scold the rest of you just a little.   We have a major economic collapse on our hands that is going to wreak havoc in this country and I can't seem to get any of you to sit up and take notice...This is serious, it is scary, and it is going to affect each one of us here.  Of course, we are all happy (at least most of us) that Obama has won, but this country is in such serious trouble it will take a Miracle Worker to get us back on track.  He is going to need a lot of help.

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 For an example, here is a story I just read today...

Hows the bailout working?

Citibank has refused to talk to me about a one month deferment because I don't make enough money! I have a 725 credit score and my wife is over 700 also. I payed over 500K for a house that is barely worth 250K, Never been late on a payment. But have decided enough is enough so Citi can have my house. I am walking and converting all my assets into gold before the rest of the country collapses from the weight of the Bailouts to Billionaires.  

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This is so sad, this is so very sad.  Citibank also bought our mortgage.  We also have excellent credit, but are we going to lose our house if we are late with ONE payment?!!! This is seriously scary.

Linora

Linora,

What you cited was an example of a person who made a bad invsetment decision: buying an overpriced house that was beyond his means. Should the government guarantee that every person can have a house that they don't qulify for ? Isn't this what got us into this whole mess?

 The reason Citi lost a lot of money is because they bought all these subrpime mortgages. The man in your posting does not make enough money to pay for his mortgage, how's one payment going to help him? How's it fair to all the people that bought  houses within their means and were being fiscally prudent ? Should we now reward irresponsible behavior ?

And btw what assets is he converting into gold ? He is waking away from his house with no money so he must have some other savings that he is not willing to use for his mortgage. He sounds like he just wants to jump on a gravy train. 

Having said that I do recognize that things can happen that we cannot predict just look at the reason that we all joined this board  and I feel very compassionate toward people hit with health issues . But to me this is a different story..

Meanwile I know people who bought houses well beyond their means and now they want taxpayers to pay for it. 

I'm not sure if Linora's post said all that, ijl. He might well have bought a house he could afford but when the bottom fell out of the housing market and houses lost their value, he and his family got stuck. Is that his fault? So many houses are worth less than they were a year ago - has nothing to do with the type of mortgage they used to pay for it. Just heard on the news that one in 10 Americans are either in foreclosure or behind on their mortgage payments. Sobering, huh?

And I know a few people who aren't looking for taxpayer help for their personal housing messes. My best friend got stuck with an ARM that trippled after her first year in the home. She was going through a divorce and ended up losing her home. She's now renting a different one and has yet to slam the govn't for her difficulties. Sucks, but life can be like that sometime. 

And like I said, Roctober, I don't read the Republican thread anymore (haven't for a while, now), so I wouldn't know what the heck was said there. Don't even care, really...

Felicia,

 The price of the house does not affect the mortgage payment unless one want to refinance. If that man bought a house for $500K and it went down to $250, he still would pay the same amount every month. My guess is that he is upset for having to pay for the house that lost half od his value. It was a bad judgement on his part and he needs to deal for this. After all my 401K looks like 201K now because  I chose to put most of my money in stocks. Should I expect the government to bail me out since I need these money for retirement? 

I do agree with you that ARM  with unreasonably low teaser rate for the first 6 months was an evil thing. And let me tell you that I put the blame for it on Clinton's shoulders as his administration pushed banks to qualify people for the loans that they would not be able to obtain under normal circumstances. .  All in the name of some undefined fairness as if everyone is entitled to own a house. Your friend is an example of this, she obviously would not qualify for a straight 30 year loan so she had to get ARM with an "unreaL rate that became real pretty fast. 

i am with ya amy, senator caroline sounds good to me.

jon stewart fans could get a kick out of this:

Jon Stewart reviews President Bush's downright awful interview with Charlie Gibson and reflects on just how badly the man has ruined this country, and how he refuses to accept any responsibility for it all.

"Do we really have to build this guy a library?! I mean, can't we just get him an arcade/go-kart course?"

http://crooksandliars.com/media/play/wmv/6895/24408

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Actually, I live in California ... there are a lot of mad people here and they are doing just what selfish people do ... not paying their mortgages so that the bank is forced to renegiate the mortgage down from even the 6% fixed loans!  Some had jumbo loans and the banks are negotiating with a lot of them ... some down to 2%.   Near my house, about 1 mile away, there is a gated community, houses were at about $1,000,000.  Now, they are at 600,000 ... I know a family who is walking away because they are mad at the value.  I am shocked!!!  They can afford the payment because it has not changed but they don't want to pay the taxes on it either.

California is lowering people's property tax in accord with the value ...  So, I just don't get some people.

The problem is that there are some people who cannot pay the mortgage any more because they lost their job due to the economy.  Now, to get a new job, no one can get the same salary they had so they are having to be late on mortg, renegotiate or foreclose.  A lot of short sales around, too. Divorce happens ... what to do with an inflated mortgage and you can't sell it for what you owe???  Short sale or foreclose.

And the other reason .. people coming into the house that was too much from the start with adjustable mortgages and they thought they could sell before the increase ... then the bubble burst and they can't sell ... alot of people never intended to be in the home when the rate increased.  Some were spec houses ... for rent til the equity increased, sell before the rate went up ..  OOPS ..

Not everyone buying were stupid people just signing on the dotted line.

Amy...

To drive your point home, I would like to reiterate what I said above.

ANYBODY WHO BOUGHT A HOUSE IN THE PAST 3-4 YEARS JUST SAW THEIR INVESTMENT DROP BY HALF.  And this especially hits hard the first time buyers, the young couples without equity, who took about big mortgages.  They are in really tough shape now.

Imagine that you and your husband are in your 20s and you make about 75,000 a hear and you just bought a new house in 2006 for $250,000.. nearly entry level home this days.  Well your house is now worth perhpas 125,000-150,000.  Let's say you put dowon $30000 and $15000 of that you borrowed from your folks, so your mortgage is now about 220,000 and your paying $2000 per month to keep a roof over your head.  One of you loses your job and you can't make the payments.  If you actually could find a buyer and sold the house now, for $125,000 you'd still owe $100,000, not to mention your debt to your parents. So you can't sell the house because you can't payoff the mortage.  You're stuck.  CRAZY!!  The only thing that makes sense is to send your mortgagor the keys and walk away.  You lose your credit, all the money you put down on the house and you still owe your folks $15000.  Very, very sad.

If they can't make the mortgage payment they'll get foreclosed.  Even if they can make the mortgage payment it doesn't make sense to pay off a $220,000 debt that is now worth only $125,000.  It makes more sense to just abandon the house and start over.  Save the $2000 a month instead of sending it to the bank.

They move in with their folks:  $2000 saved every month for  five years  at 4% is roughly 125,000.  They're saying the real estate market hasn't bottomed out yet.   So, at the end of 5 years, the house is still only worth $125,000, so if they don't move and they still owe $200,000... they are still $75K in debt if they sell...  a difference of approimately $200,000 in their net value.

They rent an apartment:  $1000 saved every month for five years at  4% is now about $63,000, so they're still ahead.

Amy, I'm with you when it comes to judging homeowners in trouble. Once the financial institutions figured out that they could make beaucoup bucks by handing out as many loans as possible and selling and reselling them without restrictions, they started approving anyone who applied.  Only a small percentage of the defaulted loans were made to low-income people in poor neighborhoods.  The vast majority were made to middle-class people.  The lenders have always controlled the purse strings of our economy, not the other way around.     

Same thing with credit cards.  When I was in college, I never would have qualified for a credit card because I didn't have regular employment.  Now, anyone over 18 can get a card, and the credit card companies make it easy for young people to get themselves into debt.  Sure, it would be great if we were all disciplined and adhered to a pay-as-you-go philosophy, but many of us aren't that disciplined.  And we live in a culture that encourages us to spend, spend, spend.  On that great Frontline program about the credit card industry, it was revealed that people who pay off their balances every month are actually referred by the credit card companies as "deadbeats."  That's the economic philosophy we've been living in for the last 20 years.  And remember when Bush told everyone after 9/11 to go out and shop as a way to support America?  That was our big wartime sacrifice.

I don't care for CNN because they've become shameless self-promoters, but I do like some of their reporters and hosts, like Amanapour.  I think the most unbiased, thorough reporting is done on NPR and PBS.  They consistently choose the most articulate, intelligent spokespeople to present both sides.  I know most conservatives hate the public media, but they shouldn't, as conservatives on those stations are generally the most convincing reps for their causes.  That is, if the intent is to sway the other side, not just to preach to the choir.

RTM - Since Prop 13 was passed about 30 years ago, real estate taxes in California are based on the property value at the time of transfer.  If the value goes up, the taxes stay put until the property ownership is transferred.  I would assume the same holds true if values go down then, that the taxes would stay based on the higher amount?  Maybe I am wrong.

As for all the union bashing, I come from a union family and there are so many falsehoods being bantied about here, that I won't waste my breath disputing every single one.   But the people who are saying such vile things are so simple-minded and ignorant to the facts.  Unions may have some bad effects depending on your point of view.  But the unions are responsible for the rise of the middle class during the industrialization of this country.  Busting unions may make some of you feel good, but you are proposing further erosion of the middle class.  Henry Ford said he wanted to pay the people building the cars so that they could afford to buy the cars as well.  If they can't but cars, Ford sells less cars - get it?  And without the healthcare provided by union contracts, that just creates more uninsured people, which creates a drain on your freakin taxes - get it?  I just wish the people who want to see the companies go bankrupt and the unions busted would quit listening to Rush, Sean and Billo - they are blowhards trying to create the story, not actually journalists gathering facts.  They want you to be angry - that's their goal!  And you are taking the bait. 

Very good point Donna.  In this country we have no national health care system but we have strong unions...not that the unions are a bad thing because they improve the working conditions and salaries of the workers.  But with the cost of labor so high in the U.S. that our producers can no longer compete in the world market.

In fact, if you want examine this whole financial crisis in a global framework, the problem can be boiled down to a small set of facts.  

We belong to a global economy, a global world economic system, many say, a single global division of labor.  For generations workers in the U.S. have been privileged, because they had unions and were well paid.  Workers in Third World countries do not have unions, they work long hours for slave wages.    Because China has such a cheaply paid labor market, they can produce everything more cheaply.  As U.S. citizens we have enjoyed the highest material standard living in the world at the expense of workers in Third World countries. 

With the removal of trade barriers and globlization of the economy that began under Reagan, the U.S. has begun to lose its position at the top of world pecking order.  We cannot compete with the Asians in producing goods for the market because our labor costs our too high.  As a consequence, we are importing Asian made goods...TVs, computers, electronic devices, clothing, you name it.

These goods are now being marketing by huge nation-wide corporations, the corporations that own the Big Box stores like KMart, Target, Home Depot, Kohl, Joanns, Michaels, etc.  Small businesses cannot compete with these huge corporations, Main Street cannot compete with the strip malls.  Globalization has turned the U.S. into a huge global consumer, while decreasing our buying power.  So there has been greater and greater pressure to buy on credit, the promise of future earnings.  The credit bubble has blown up about as far as it will go and is collapsing because the promise of future earnings to pay off the debt no longer exists.

As a consequence, we are borrowing from the Chinese in trillions of dollars.  Why are the Chinese lending to us?  Because they need us to keep buying the stuff they are producing so cheaply in their factories....