MudEngineer

How the Community Reinvestment Act Helped Lead to the Housing Bubble

The banks and mortgage brokers just created a way to do what the politicians were demanding them to do. Loan money for homes to people who may or may not be able to repay the loans. A big part of the fault after that is the ratings agencies which rated these loan packages as A+ ratings or above. If they had been rated as what they truly were (junk), they would have had to stop making those junk loans because they would not have been able to resell them to investors.


On Jun 28 12:32 PM herbert hoover wrote:

> The greed of the mortgage originators had nothing to do with this
> huh? and the greed of the MDS packagers was just a peripheral effect?
> and the rating agencies had nothing to do with it either.
>
> Jesus, what an oversimplification to absolve the people who played
> the largest part in this fiasco

The American Economy Is Spent

Complaining about Republicans who spent too much money is fine. I agree with that accessment! But, how do you think that electing a Democrat who is now spending at five times their rate is a solution for the future. God Help Us when the Dollar goes to worthless! Oh, by the way, Sarah Palin has more common sense in her pinky finger than Obama has in his entire body and his entire cabinet.


On Jun 23 11:02 AM Ferdinand E. Banks wrote:

> If the American people don't elect people like George W. or Sarah
> Palin, the next few decades could turn out fine. The truth is that
> the great American voter is the main man in the international macroeconomy.
> I hope that my repeated skepticism about the two geniuses mentioned
> above does not engender any bad feeling. In a comment yesterday I
> was graded -33 - minus thirty-three - by my peers, but that number
> didn't worry me at all. The last two numbers in my army serial number
> were 33, and that number has always mean good things for yours truly.

The Case for Depression, Part 1: Unemployment

Another group of people that are not counted in the statistics are the people who have taken cuts in hours worked. After laying off 12 employees, my son's employer put the rest of the workforce on a 32 hour work week with more layoffs possible. Including the loss of previous overtime, this amounts to a 30% cut in income from only one year ago. How much extra goods and services do you think these people will be paying for in the future?

I am in the same boat as my company has so few projects, that I am subsisting almost entirely on base pay only, which amounts to a 60% pay cut over last year. I am purchasing virtually nothing except ammunition (in preparation for possible anarchy) and the bare necessities. It is hard enough to just pay the normal monthly bills. Thank God that my wife and I did not go out and build that new house as we had wished to do. We have no mortgage at this time.

The people above are still counted as fully employed with the exception of those that were laid off.

Give Obama 40 More Years in Office!

If spending money at a rate that is 3 times faster than the overspending of the past 8 years and taking over American businesses and giving them to the Unions is being an effective and farsighted leader, then we are in good shape! Thank God for that, huh? Just just drinking that Kool-Aid and you won't even notice when society as we knew it comes to an end! Sheeple elected him and Sheeple just keep on defending him even as he marches us all to the destruction of our Country. It just amazes me how blinded and uninformed people can actually become.


On Jun 17 07:54 AM Tom Armistead wrote:

> My wife and I listened to Obama's interviews with CNBC and Bloomberg
> yesterday and we were impressed with his willingness to address the
> issues and propose solutions. He was not issuing empty promises:
> he made careful use of the word "if." If the US addresses its fundamental
> problems progress will be made.
>
> That would mean a coherent 1) energy policy, controlling the increase
> in 2) medical costs, and achieving adequate public 3) eduction.
> Also, today's announcement on financial re-regulation is critical.
> Derugulatin created chaos in the financial system.
>
> Most of this article's charts cover 50 years or more. It took the
> US a long time to wander this far into the woods: it may take 50
> years of effective and farsighted leadership to undo the harm that
> has been done. This is a democracy. If Americans select effective
> and farsighted leaders, along the lines of Obama, then great things
> are possible.

Worst Housing Number in Decades: What Is the Wall Street Media Smoking?

No depression? Maybe it just isn't here yet!

This up move in housing and in the stock market are the first real bounces that we have had on the way down. As they say, even a dead cat will bounce, albeit this dead cat bounced higher than one would have expected, but I saw a lot of pushing the market up with just plain hot air and maybe some Government end of day buying.

Reality will return when the millions of unemployed run out of benefits and stop paying on their mortgages and the existing mortgage holders have even more interest rate resets on their mortgages and can no longer pay even though they are still employed. Also, there are millions of employees who are now on a shortened work week and are cutting their spending to the bone just to stay afloat. I am one of them, now at less than 50% of my normal pay.

Did Politics Cause Monday's Dow Decline?

Politics didn't cause the fall, but it did prolong the bounce from the recent lows. How many days had sold off most of the day lately only to see a Government buy program come in at the very end of the day. This rally went up on light volume and will most likely collapse under its own weight. There are many more foreclousures to come in housing based on new different types of mortgages beginning to reset and also all the poor recently unemployed homeowners no longer being able to pay their mortgages. This will cause the second bombshell to hit the banks and lending will dry up again!

Cramer's Lightning Round - ProShares UltraFinancials Is a Hoax (6/12/09)

Check the stock charts for the past year. UYG was at 25+ and SKF was at 150+. If you had shorted "both of them" you would actually have made a lot of money as they "both" went down. The way that they are supposed to work is one is supposed to track the exact opposite of the other percentage wise. I would like to sign up for a class action lawsuit on this farce. Any attorneys out there willing to make a lot of money?


On Jun 15 07:38 PM Northstar10000 wrote:

> Idiots
> Not all ultra short/long ETF's are junk. Tell me how SSO/SDS
> does not track the market almost perfectly. Also while you are at
> it tell me how these can both be shorted and make money. I know
> you can't. What they own or short has to follow the market., because
> they are the market. You might be/guess wrong on market direction
> but both of these will follow the trend.

Rising Oil Prices: What We Have to Do ASAP

The only commenter that seemed to have a grasp of the situation is Alan von Altendorf. The only comment that I question is that the Strategic Oil Reserve is leaking? If it were properly created as designed by dissolving out huge caverns inside of very large salt deposits, it cannot leak as crude oil cannot dissolve salt. The reserve is indeed for emergency use only and that means supplies being cut off and a slightly higher price does not meet that criteria.

I am a drilling fluids engineer and the current oil price maybe just barely covers the cost of developing and producing from a new field in deepwater (greater than 3000 feet deep) in the Gulf of Mexico. Many projects have been delayed or canceled because of the price drop down to $35 when the price overshot to the downside just as it had overshot to the upside last year. With a current depletion rate on the worlds wells at 9% per year, you had better hope that somebody starts drilling again very, very soon. If the economy picks up at all, it will not take much for demand to surpass the current supply.

If you think that just the possibility of future production does not effect price, then why did the oil price fall precipitously right after Bush got the rest of the Gulf of Mexico opened up for drilling? And then after Obama wrote an executive order canceling that Bush order, the price started to rise again quite rapidly. Thank your new so called President ( he has thus far spent tens of millions in legal fees to not have to produce a real birth certificate) for the price increases in oil and also in pretty much everything else due to his tripling the rate of Government spending in just 5 short months. The deficits he is putting into place just to this point will TRIPLE OUR NATIONAL DEBT IN JUST 10 YEARS!

The Coming Economic Collapse, Part 2

WG and RedBaron are quick to point out the so called problems with your analysis by picking a small parts of it and then ignoring the rest. Obama has no created a bigger defict in 5 months than Bush and Cheney did in 8 years. Bush and Cheney spent too much and I was upset with them about it then. At the current rate of spending, every American citizen should be extremely upset and be writing and calling their representatives to say enough is enough.

Cutting the corporate taxes down to the lowest rate in the world would bring our manufacturing back to the U.S. ( thereby creating millions of new good jobs) and would have cost us less than the so called stimulus and pork barrel spending contained in the 787 billion tax bill that none of them even read before they voted on it. Washington has very few people left in it who have any common sense at all! Between the so representatives and the "sheeple citizens" we are so screwed!

Unemployment Data Less Upbeat than It Appears - Deutsche Bank

I am in the same boat as the steelworker above. I have only worked a total of 25 days since the middle of January. I am existing on base pay only which is a 60% cut from my normal income when working full time. I am just like four more employees of my company in this small town who are subsisting on base pay only. We are still counted statistically as being fully employed. We sure don't spend money anymore like we are employed, but purchase only the necessities. Still beats unemployment, but also puts you into limbo land where you have to be available to work at a moments notice and cannot have much of a normal life.

Our country will pay for my lack of employment in the form of much higher gas and oil prices in the future since there is very little drilling going on. This, even while existing oil wells are now depleting at the rate of 9% per year which is twice what it was just two years ago. I am a drilling fluids engineer who normally works in the Gulf of Mexico.

U.S. Jobs Propaganda Gets More Desperate

I am a Conservative and will be the first to admit that George W and Cheney spent far more money than any Republican should, but the current President is spending money at five times the rate of those two. It is time to write, call and email every one your representative and tell them enough is enough and stop the spending or you will be replaced.

The only thing that may save our country from being totally destroyed by our government is the fact that at least half our citizens are still armed. Join the NRA to make sure it stays that way. Hitler disarmed the German citizens before he was able to kill millions of them without any way for them to defend themselves.

When the Russians are lecturing us on rapidly becoming a Marxist state, that had better scare the hell out of all of you!

Car Country and Global Oil Depletion

Reagan Fan quotes some interesting numbers related to oil exploration as in "tens of billions of barrels being found each year". He failed to carry out one step further in that at the current rate of useage of about 80 million barrels per day, one ten billion barrel find only feeds the world for 125 days. Therefore even 30 billion new barrels would only cover one years consumption. In the meantime, the worlds existing wells are now depleting at the rate of 9% per year. Therefore we are now using way more than we are able to find and the newfound oil has a cost of over $70 per barrel. Should the oil companies produce that oil at a loss? Would YOU? The price will rise and will definately kill the economy again if it somehow miraculosly recovers from the government created financial disaster by mandating that "everyone should be able to own a home". I am a drilling fluids engineer and the future does not look pretty from my viewpoint! We want wind power, solar power, bio power and wave power and forget that it takes a lot of oil energy to build and transport the equipment and infrastructuce needed to create it all. Obama is being incredibly short sighted in not supporting more drilling in the U.S. You are really going to need it!

There Won't Be a Recovery

I give high credit to Schnickelfritz for actually pointing out the basic foundation of sand that the housing boom was built on. The CRA and ACORN and the below named Democrats accelerated the demise of our great country by mandating that "everyone" should be able to own a home and then the banks created derivatives to be able to unload the obviously flawed loans on third parties. The derivatives were so incredibly complex that even the rating agencies could not understand them and pronounced these junk mortagage packages to be A+ rated or better making it very easy to sell the junk. The resultant mess is history that is still unfolding and now being compounded by a like thinker in the White House who is applying the same theory to everything along with a take from those who have and give to those that don't want to help themselves but just "want".

"Where were YOU when the marxist Democrats were mandating that common sense and the regulations be overridden and that mortgages via the Community Re-Investment Act, specifically changes made circa 1994 (Fannie, Freddie, Frank, Dodd, and ilk) be given to people who didn't have the means to repay those loans???"

Are Low Interest Rates Here to Stay?

First forced low interest rates for autos, then force the lenders to lend money to a person for an auto when they already know that he can't afford to repay. Sounds kind of like the home loan problems (caused by lending rules mandated by certain members of Congress- Democrat of course) did not teach our Government anything at all. Lets do it again with cars and trucks this time and wait for the next collapse to come even before the housing price collapse is not yet over.

Easy Money Did Us In - Geithner

The financial problems were caused by Barney Frank and his buddies insisting that everyone should be able to buy a house even if they couldn't repay the debt. The banks just found a way to sell this obvious risk to someone else in the form of packaged mortgages and derivatives thereof and Fannie Mae and Freddie Mac helped them do it!

The third wisest man when faced with the plane going down quickly grabbed the one of only two remaining parachutes onboard with 3 people left to jump out. The last remaining man said to the girl scout that they had to make a tough decision as to who would live. The girl scout said not to worry, the third wisest person in the world just jumped out of the plane with my backpack strapped to his back.