Toxic assets good for the American Taxpayers consumption?

This is just more of the same. I can't believe this is the only fix that will work.

http://www.foxnews.com/politics/first100days/2009/03/22/romer-firms-buy-toxic-assets-need/

They should be aware that the taxpaying voters of this country don't think this new culture of doing business is the right way to do business.

Didn't leverage lead us into this mess? Isn't leverage just another word for credit?

Leverage:

http://en.wikipedia.org/wiki/Leverage_(finance)

Managed by the private sector but funded by the public without oversight and they can't even determine the value of this crap yet. Who's a sucker?

Trying to help or trying to profit without falling under oversight and restrictions?

 

They sure come up with beautiful sounding names for these things. The Public-Private Investment Program.

They missed an opportunity to call it something patriotic like they've done with other things (the Patriot Act, the Patriot Missile, etc). The Patriot Investment Program would have sounded good.

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They should enlist the services of Kevin Trudeau and promote the plan to the public with a new book: The Investment Plan That 'They' Don't Want You To Know About. Millions of dupes would line up and do whatever the book says.

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But, Obama is confident latest bank rescue plan will work. I thought you said that Obama was going to fix all our problems. Sounds to me like he just wants to help the rich get richer. I wish someone would buy my toxic assets. Since dh lost his job, our family is going to loose our house. But hey, as long as the rich can still have their private jets, multi million dollar homes, and power lunches I guess my kids and I can live in a tent. Oh wait can't do that either.

 

think your pissed off now??

read this,

http://www.reuters.com/article/ousiv/idUKTRE52N37K20090324?virtualBrandChannel=10112

 

I saw that earlier today. Yes I am pissed. We have worked our whole adult lives. Never taken welfare or food stamps and paid our own healthcare. Now for some reason these rich asswipes are getting relief from their own stupidity, and neither of us can find a job that pays enough to pay all our bills, but we don't need a bailout. The government will buy our "toxic" mortgage from our bank, and we will still be out on the streets.

I have tried to live responsibly. We have no credit cards-if you can't afford it, you don't need it, no car payments-there's nothing wrong with an older car that runs well and that you can afford to buy, buy most of our clothes second hand-mostly so as not to support these big companies and their slave labor, furniture all second hand-mostly freebies others were throwing away, grow and can a large portion of our food, and still we are in this place I never thought we would be.

Actually I am beyond pissed.

 

Goverment sponsord agencies like FannieMae, Freddie Mac and HUD, VA have been providing sub-prime mortgages for years.

Where was the outcry? Where was the curiosity?

The enablers of these toxic FNMA mortgages viewed their mission as a type of income distribution. Where was the oversight.

So its OK for Taxpayers to underwrite a lousy investment to Joe Deadbeat, but if Joe's mortgage is packaged into a security, its off limits?

 

Fannie, and Freddie don't lend money, to deadbeats or anyone else. They purchase loans from the private lenders who actually underwrite the loans.

It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more.

Thus it was the banks that made the loans and failed to ask for the necessary assurances from the borrowers. Why was that? Because they could, and they thought they could make some easy money off predatory lending practices and defaults.

 

I heard an interesting discussion on Democracy Now recently about usurious interest rates being the source of the melt down. Of course it was never a problem when poor people were being preyed upon until the values of their foreclosed properties fell below what they were worth. For many years there was a cap of something like 9% on what banks and creditors could charge their customers, but that cap was removed in a landmark decision back in the 70's. What the cap effectively did was make it in the lender's best interest for the client to repay the loan, that's how they made money. Prior to the meltdown, it became profitable for banks to lend at variable interest rates, knowing that the interest rate would skyrocket and the client would be unable to pay off the loan, but they'd still end up paying so much of the interest that the bank would foreclose on the property and still make money, more money than they would at lower interest rates.

I like the idea of more government oversight and transparency, but isn't giving Geithner the job effectively putting the fox in charge of the hen house?

Be sure to get your terms straight. When tax payer funding goes toward helping poor people, it's called socialism. When it goes toward propping up institutions that screw people, it's known as business as usual.

 

Once in foreclosure they could sell the property to another sucker at variable rates at a higher appraised value. Thus the bubble was created.

 

A little history on interest rates and their effects:

http://www.affil.org/consumer_rsc/usury.php