Re: OT: USA the fleecing of USA banks by Wall Street

AEF wrote:
On Oct 3, 5:30 am, "David Weatherall" <nos...@xxxxxxxxxxxxxxx> wrote:
Neil Rieck wrote:

<SNIP>



For the longest time, people in the financial sector claimed they are
smart while the rest of us are dumb. (Try getting an official
explanation of "derivatives" without the usual insider lingo and
you'll see what I mean). So it turns out that these people are not as
smart as they claim, which is not the same as criminal (lthough we do
have crimes involving criminal damage to society or its citizens).
Some people say this mess was created (in part) by the synoptic view
of Alan Greenspan who was repeatedly warned about the sub-prime bubble
in 2002. But Greenspan knew better...
http://www.pbs.org/moyers/journal/09192008/profile.html(be sure to
watch the video)
Other people say this mess was caused (in part) by people clinging to
their ideologies rather than meeting in the middle after a diplomatic
dialog followed by debate.
http://www.pbs.org/moyers/journal/09262008/watch.html(be sure to
watch the video)
If this crisis brings the Western-world together in a dialog about why
we are running stock markets like casinos, then this crisis might be a
good thing.

No, because there are too many innocent losers. There are many people
are losing their homes and others losing equity (due to all the newly
empty homes near them). Also, many businesses are losing customers.
And then there is the potentially, if not likely, big cost to
taxpayers. No, not a good thing.

INNOCENT?? I doubt it very much! When you buy a house and mortgage it, you are supposed to know that you must make monthly payments of X dollars per month for Y years. You are supposed to have an income sufficient to make those payments as well as feed your family, pay taxes, health care, etc, etc. The customary penalty for failure to pay is to lose the house! The agreement you sign says all this and, by signing your name, you agree to it.

Nothing guarantees the resale value of your new home! The selling price will depend on the condition of the property, the current market, the availability of credit, the property taxes that must be paid, the condition of neighboring property, etc, etc. To say that the resale value will fluctuate can be one of those major understatements. . . .

The current "crisis" appears to be the result of poor judgment on the part of just about everyone involved. People seem to have purchased homes and taken mortgages at the limit of, or somewhat beyond, their ability to pay. Loan officers appear to have given insufficient weight to the borrower's present and future ability to pay the interest and principal! They also appear to have ignored the possible changes in the market value of the property securing the loan!

"Not a good thing!" is a statement I think we can all agree with.
.

Relevant Pages

  • Re: OT: USA the fleecing of USA banks by Wall Street
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