housing/financial crisis explained in 3 sentences.

[cotullaguy]

If you are happy with the Federal Reserve, then more power to you.  I guess you are happy we are paying interest to a group of bankers on our money. 


Here is some info on the Federal Reserve you might find enlightening since you think it is a great organization:

here, i'll put some words in your mouth.  you hate capitalism.  what's wrong with paying interest?  who is stopping you from paying cash?  i don't find the info on the federal reserve enlightening.  you forgot the conspiracy that every president who wanted to print money was assassinated.   you don't have to put money in those banks.  no one is stopping you from loaning out money and charging interest. 

You either do not care about our country or do not understand how the Fed operates.  You mean you think it is a good idea for a group of private individuals to be able to print our nations dollars? with no audits and then charge us to get it from them even though it is unconstitutional?

 

[knabe]

You either do not care about our country or do not understand how the Fed operates. 

there is a direct correlation between putting your words in other people's mouths and them ignoring you regardless of the facts.

 

[cotullaguy]

You either do not care about our country or do not understand how the Fed operates. 

there is a direct correlation between putting your words in other people's mouths and them ignoring you regardless of the facts.

this was your statement: "here, i'll put some words in your mouth.  you hate capitalism.  what's wrong with paying interest? "

This was after explaining to you that we are paying a bunch of private individuals against our constitution interest for nothing.  Brilliant.

 

[knabe]

this was your statement: "here, i'll put some words in your mouth.  you hate capitalism.  what's wrong with paying interest? "

if you can't figure out that that was a response to you continually doing that with all the video links with people and in private emails, then a vacuum  you shall receive.

 

[cotullaguy]

Funny

 

[bulldog]

Anyone that supports how banks are currently run needs to study it closer.  For every dollar in the bank, they can loan out 8.  This is creating money out of thin air.  This is why if we have a run on banks, there will not be enough actually dollars in the bank to cover.  This is the banks worst fears.

This is an untrue statement! I work at a community bank and this is not the case. More research is needed on your part.

it's always been that way.  what has changed is the amount they must retain on hand. they are not making money out of thin air.   banks accept deposits and loan it out.  logic dictates that with even 99.99% of deposits on hand and you had a run on the banks, there wouldn't be enough.

the issue, for me at least, is that the borrowers and the lenders had no skin in the game do to regulation and that both sides knew or expected the government would bail them out.

fannie mae and freddie mac were allowed to make loans with less money down and little or no verification of income.  how is a bank supposed to compete?  easy, they demand a trading vehicle to get out from under that and have the government guarantee the loans with taxpayer money.  stupid.

this artificially props up the value of real estate, which generates a self reinforcing asset price increase which pays for government programs to offset the need to print so much money.  that is making money out of thin air.

 

[cotullaguy]

In order to borrow $100 from your local bank, they only have to have $10 on hand. If they charge you 5% interest, they are making

5% on the first $10 block which they have on hand
5% on the second $10 block - which is imaginary money
5% on the third $10 block - which is imaginary money
5% on the fourth $10 block - which is imaginary money
5% on the fifth $10 block - which is imaginary money
and so on up to the full $100 dollars.

So while it seems they are only making 5%, in reality when you add up all the imaginary blocks, they are making 5% x 10 or 50% on that original $10, plus the $90 in imaginary principle.

 

[GoWyo]

The money they are making and that you are paying isn't imaginary money.  As for the money on deposit, that is like an insurance pool.  If there isn't enough, then the problems start.

 

[bulldog]

In order to borrow $100 from your local bank, they only have to have $10 on hand. If they charge you 5% interest, they are making

5% on the first $10 block which they have on hand
5% on the second $10 block - which is imaginary money
5% on the third $10 block - which is imaginary money
5% on the fourth $10 block - which is imaginary money
5% on the fifth $10 block - which is imaginary money
and so on up to the full $100 dollars.

So while it seems they are only making 5%, in reality when you add up all the imaginary blocks, they are making 5% x 10 or 50% on that original $10, plus the $90 in imaginary principle.

you have never been thru an fdic bank audit. do you really think they are going to let banks charge 50% interest.

 

[cotullaguy]

i audited banks

 

[bulldog]

i audited banks

Good for you! So does that 50% show up in the Fed Box or is just the 5% that shows up in everybody elses.  If it was all that great I guess everybody would be lending money.

 

[cotullaguy]

i audited banks

Good for you! So does that 50% show up in the Fed Box or is just the 5% that shows up in everybody elses.  If it was all that great I guess everybody would be lending money.

it no secret. Look up "fractional banking.". Ask the bankers why they are not lending and are instead spending billions foreclosing.

 

[JbarL]

i audited banks

Good for you! So does that 50% show up in the Fed Box or is just the 5% that shows up in everybody elses.  If it was all that great I guess everybody would be lending money.

it no secret. Look up "fractional banking.". Ask the bankers why they are not lending and are instead spending billions foreclosing.

a record number of empty houses....and a record number of homeless people....and a generation who lost there retirement futures...= "fractional living"....jbarl

 

[cotullaguy]

a record number of empty houses....and a record number of homeless people....and a generation who lost there retirement futures...= "fractional living"....jbarl
[/quote]

Here is the kicker.  The banks could have given some relief on interest rates going up on the ARM loans.  The rate they borrowed from the FED crooks was less than 1%.  Yet, the pushed the rates from 6% to 10% on many loans.  The suckered many into the loans with no real responsible underwriting.  The banks got bailed out, got the homes, and never put up a dime.  And then we have some on here that want to defend the banks as Capitalism.  It amazes me.

 

[knabe]

a record number of empty houses....and a record number of homeless people....and a generation who lost there retirement futures...= "fractional living"....jbarl

Here is the kicker.  The banks could have given some relief on interest rates going up on the ARM loans.  The rate they borrowed from the FED crooks was less than 1%.  Yet, the pushed the rates from 6% to 10% on many loans.  The suckered many into the loans with no real responsible underwriting.  The banks got bailed out, got the homes, and never put up a dime.  And then we have some on here that want to defend the banks as Capitalism.  It amazes me.
[/quote]

there you go again, putting words in people's mouth's.  barney frank and bill clinton created these loans under the threat of discrimination.  the people who couldn't afford the homes got to live high on the hog for a while with zero down.  since they didn't learn that you can't get anything for free, now they know.  none of the loans should have been made or mandated in the first place.  20% down should never been lifted.  even that drove up the price of housing and is part of your comparison that isn't fair as creative financing wasn't available back then which only artificially raised the cost of a house to include interest, which it doesn't, which further increases the cost of a house as no one pays cash for a house any more, so in essence the price is actually at least double on a 20% down 30 year loan, which is an artificial price because renting is somehow evil.

perhaps you could define capitalism.

 

[JbarL]

first time home buyers were the bait fish.....the real catch was the folks who had paid 23 yrs of mortage, and went out and refinaced, in the good times...and now are looking at  20 yrs more of mortage instead of 7,.. plus there retirement is now gone...the ole one two    jbarl

 

[GoWyo]

If more people followed the advice of Dave Ramsey in Total Money Makeover there would be a whole lot less financial disasters.  It takes a lot of discipline, but really pays off after a few years.

 

[cotullaguy]

there you go again, putting words in people's mouth's.  barney frank and bill clinton created these loans under the threat of discrimination.  the people who couldn't afford the homes got to live high on the hog for a while with zero down.  since they didn't learn that you can't get anything for free, now they know.   none of the loans should have been made or mandated in the first place.  20% down should never been lifted.  even that drove up the price of housing and is part of your comparison that isn't fair as creative financing wasn't available back then which only artificially raised the cost of a house to include interest, which it doesn't, which further increases the cost of a house as no one pays cash for a house any more, so in essence the price is actually at least double on a 20% down 30 year loan, which is an artificial price because renting is somehow evil.

perhaps you could define capitalism.
[/quote]

Funny.  You are blaming Barney Frank and Bill Clinton.  Both Democrats.  Yet, the collapse happened under what President?  So Predictable.  

today Capitalism is this:  First you rape the American public on Derivatives and then when all of the bets lose, you have the American people pay for it because you have friends like Bush or Obama in power.  That is capitalism.  The government can get away with Murder and about 99% of the public will be fooled by Fox or NBC News as they all lie.  Now that is Capitalism.   (lol)

 

[bulldog]

first time home buyers were the bait fish.....the real catch was the folks who had paid 23 yrs of mortage, and went out and refinaced, in the good times...and now are looking at  20 yrs more of mortage instead of 7,.. plus there retirement is now gone...the ole one two     jbarl

So now you are blaming peoples ignorance on bankers?  Maybe people need to take responsibility for what they got themselves into instead of blaming somebody else.  That's what wrong with people today, it's always sombody elses fault and not there's!!

 

[JbarL]

first time home buyers were the bait fish.....the real catch was the folks who had paid 23 yrs of mortage, and went out and refinaced, in the good times...and now are looking at  20 yrs more of mortage instead of 7,.. plus there retirement is now gone...the ole one two     jbarl

So now you are blaming peoples ignorance on bankers?  Maybe people need to take responsibility for what they got themselves into instead of blaming somebody else.  That's what wrong with people today, it's always sombody elses fault and not there's!!

...i was just recalling the atmosphere at the time of the bust.....folks felt comfortable doing a refinace ( or buying a home) at the time , and felt there retirement money was safe as well...yoiu didnt expect the bankers / realtors and money market firms to speak up and  put a stop to it did you?  jbarl