Well Reasoned Article about Regulation and Free Markets

#26
#26
droski said:
i think you truly underestimate the american populace. for one thing the overwelming majority of people in this country don't buy houses they can't afford.
Click to expand...

BS. Go look at current foreclosure notice rates and get back with me. It's jumped tremendously since the first of the year.
 
#27
#27
g8terh8ter_eric said:
BS. Go look at current foreclosure notice rates and get back with me. It's jumped tremendously since the first of the year.
Click to expand...

so again, tell me what that represents. How much of the population and how many actually made a good decision and just worked for an outfit that couldn't any longer pay them.
 
#28
#28
BigPapaVol said:
what are the foreclosure rates? how many of those are tied to broad economic issues?

In the end, there isn't enough education on earth (or regulation) to keep people from doing stupid crap. There also isn't any education to help people avoid unintended consequences or bad fortune. It's going to keep coming.
Click to expand...

Agreed, but we can try to get these people to understand what they are doing before they do it. It would probably help 50% of the people that go through it make a better decision. You right though, you can't fix stupid.
 
#29
#29
According to a story I read, they are on track to take more than 1 million home repossessions this year alone. That's huge, IMO.
 
#34
#34
g8terh8ter_eric said:
Agreed, but we can try to get these people to understand what they are doing before they do it. It would probably help 50% of the people that go through it make a better decision. You right though, you can't fix stupid.
Click to expand...

the papers you sign have it all spelled out. You can't force someone to read and understand if they aren't willing (or simply can't).

Yes people ar shady but unless the docs were forged the buyers were to blame
 
#35
#35
utvolpj said:
the papers you sign have it all spelled out. You can't force someone to read and understand if they aren't willing (or simply can't).

Yes people ar shady but unless the docs were forged the buyers were to blame
Click to expand...

Most people can't understand the meaning in most of the loan papers. All I am saying is, there isn't much of an education to the consequences to owning a house, people just tell you the good crap.
 
#36
#36
The government is just as responsible, if not more for the housing trouble. They forced Fannie Mae and Freddie Mac to give home loans to people that wouldnt qualify for a conventional loan. The ARM killed more people because they didnt see the consequences of a $500 a month payment ballooning to a $1500 a month payment. Most gambled and lost.

Droski and Papa, feel free to tell me if I am wrong. I am not a financial guru, so be gentle with me.
 
#37
#37
g8terh8ter_eric said:
It's enough to cause distress and devaluing in the market. It's a great time to buy yes, but it's a bad time to own. Make sense??
Click to expand...

It does make sense, because the mortgage market provides thin returns and can't afford many hiccups when asset values are so high and pay off so slowly. Mortgage paper is now irrationally viewed as toxic, so new loans are tough to come by, running most buyers out of the market. Limited demand results in falling pricing.

The major distress is coming from odd mortgages that were known to be high risk when underwritten. Those are what we see blowing up today.
 
#38
#38
g8terh8ter_eric said:
Most people can't understand the meaning in most of the loan papers. All I am saying is, there isn't much of an education to the consequences to owning a house, people just tell you the good crap.
Click to expand...

they are not difficult to understand at all. And if you don't understand something why are you signing your name to it? Stupid people will always be stupid and no amount of regs will fix that. It just happens they all decided to make the same stupid decision at the same time
 
#39
#39
g8terh8ter_eric said:
According to a story I read, they are on track to take more than 1 million home repossessions this year alone. That's huge, IMO.
Click to expand...

there are 100 million households in this country

g8terh8ter_eric said:
Most people can't understand the meaning in most of the loan papers. All I am saying is, there isn't much of an education to the consequences to owning a house, people just tell you the good crap.
Click to expand...

the mortgage documents explicitely stated the mortgage payment and where it would go in the worst case rate scenerio. are we really arguing we can't rely on people to read?
 
#40
#40
CountVolcula said:
The government is just as responsible, if not more for the housing trouble. They forced Fannie Mae and Freddie Mac to give home loans to people that wouldnt qualify for a conventional loan. The ARM killed more people because they didnt see the consequences of a $500 a month payment ballooning to a $1500 a month payment. Most gambled and lost.

Droski and Papa, feel free to tell me if I am wrong. I am not a financial guru, so be gentle with me.
Click to expand...

that's some of it and partisans like to point to gov't mandating loans into historically poor areas. This type of lending and some of the interim results led to a belief that default rates were manageable, even with tough loans.

The real culprit in this mess is that the note buyers were relying on insurance and insurers to make them whole in the event of a huge market correction. That correction happened and the folks providing insurance, whether legit or via swap, simply went broke and shoddy underwriting they allowed came home to roost.

Underwriters blew it, insurers blew it, investors blew it, interest rate environment blew it, regulators blew it and home buyers overdid it. Many things happened here, but the paper thin insurance is what allowed the shoddy underwriting and I view that as the main problem.
 
#41
#41
Sheeesh - let people learn the old fashioned way. If they F'up, don't bail them out. Pretty simple really.
 
#44
#44
volinbham said:
Sheeesh - let people learn the old fashioned way. If they F'up, don't bail them out. Pretty simple really.
Click to expand...

the sad part is the majority of people who have gotten help under obama's mortgage plan went into default monthls later anyway.
 
#45
#45
g8terh8ter_eric said:
Based on foreclosure and short sale rates, they suck at it really.
Click to expand...

How does that show that people didn't understand homebuying? We are coming out of a housing bubble and recession that caused a significant number of homeowners to be upside down in their homes as well as left around 10% of the population unemployed. Would this not have an impact on the rate of foreclosures? I guess, attributing the foreclosure rate solely to idiocy seems far-fetched.
 
#46
#46
paul1454 said:
How does that show that people didn't understand homebuying? We are coming out of a housing bubble and recession that caused a significant number of homeowners to be upside down in their homes as well as left around 10% of the population unemployed. Would this not have an impact on the rate of foreclosures? I guess, attributing the foreclosure rate solely to idiocy seems far-fetched.
Click to expand...

let's also not forget the very high % of foreclosures that were originally bought as investments products.
 
#47
#47
BigPapaVol said:
Maybe you should look into a book I like to recommend (Extraordinary Popular Delusions and the Madness of Crowds), which addresses many market bubbles and the psychology of those who make them happen. Very interesting.

In the end, we aren't going to get rid of the bandwagon or the rise and fall of bubbles.
Click to expand...

That's the point. The article (and others) try to portray this housing bubble as the consequence of government regulation.

History shows that the boom bubble/bust cycle happened even before there were such regulations.
 
#49
#49
volinbham said:
Sheeesh - let people learn the old fashioned way. If they F'up, don't bail them out. Pretty simple really.
Click to expand...

Unless you're too big to fail, or your institution was the unwilling victim of a small number of people screwing it up.

I think your rule only applies to the little guy. The big guys get a pass (or those with enough money to lobby for a bailout).
 
#50
#50
rjd970 said:
Unless you're too big to fail, or your institution was the unwilling victim of a small number of people screwing it up.

I think your rule only applies to the little guy. The big guys get a pass (or those with enough money to lobby for a bailout).
Click to expand...

i still dont understand this logic that the big guy gets a pass. i don't think aig or citi shareholders would agree with you. the so called ridiculous bonuses would have gotten paid before the crisis if they went bankrupt or not.
 
New posts
You must log in or register to reply here.

VN Store



Back
Top