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  1. #41
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    Quote Originally Posted by nutmeg View Post
    Thanks for the link-- those were very illuminating articles. My question is how can the major financial institutions justify not only pushing those loans, but bundling them into mortgage-backed securities, slicing them into tranches with often dubious ratings from the geniuses at Fitch & Moody's, flogging them to investors and then betting against them in full knowledge that they stink like last Tuesday's fish? They've got a lot more information at their disposal than a poorly educated citizen reading a tantalizing ad for cheap real estate while they wait for an oil change.

    The film addressed this question in particular.

    First, you need to understand that risk varies and is translated (always) into higher or lower rates of interest paid. So those bundles of mortgage-backed securities combined loans that were most likely to be paid (and individually paying low interest) with risky loans that netted the person who bought that loan a higher rate of interest.

    Should investors buying those bundles have regarded those bad loans as bad? Not necessarily. They were making a bet, accepting risk that folks would default in return for a greater pay-out.

    Let me know if I have this wrong.

    But this question-- how did loans become a tradeable commodity start in the first place?-- was a question the film dudes hoped to answer. That's why they went back to the formation of the FHA and a way of standardizing the characteristics of a mortgage so that it could become a tradeable commodity.
    The armchair saddler
    Politically Pro-Cat



  2. #42
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    Quote Originally Posted by Lady Eboshi View Post
    ...And those manual-labor jobs get taken by new immigrants because it's a plain fact that white Americans won't take them...
    The statement would be far more accurate if "white Americans" was replaced with "U.S. citizens".
    “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
    John Adams



  3. #43
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    Quote Originally Posted by Larksmom View Post
    Wages have NOT been flat since the 70's. Heaven's to Betsy, I started working full time in 1971, I retired in 2002, and went from $93. a week, to $45k a year.
    The wages ARE flat now, because there is a surplus of people wanting jobs, and a decreasing number of jobs to be had. The problem of the minimum wage is that people see that as a STOPPING place now-people just can't live on $7 an hour. Wages must be tied to what a job is worth. I think jetsmom said, everyone can't be making 100k a year. The reason jobs go overseas is because it becomes too costly to keep them here. And before you tie yourselves in knots, I am not just talking about wages. Work rules have become so onerous as to drive compaines out of business.
    How many of you have read the details of the mess at Hostess bakeries? It is made to look like the bakers union drove the company out of business, but it was really the Teamsters. The work rules said the driver wasn't allowed to unload his own truck! They drove another worker out to do that, and Twinkies and Wonder bread weren't allowed to be on the same truck! How is that for an effiecient work rule! No wonder they are out of business. Ans as far as complaining about crummy millionaires being greedy, why don't you try to raise enough capital, and put up with this mess and see how you like it.
    Yeah...it used to be that a minimum wage job is what people got when starting the workforce. They also didn't expect to be able to pay rent, get a new car, own a horse, have the newest/best TV, phone (now computer/Ipad), cable, etc, much less buy a house until they had moved up in their careers. It kind of cracks me up to see people complain about how they are barely getting by, while they use a computer, own a car and own a horse and tack, which is a luxury item unless you have a working ranch/carriage business, etc. There is a huge disconnect between what is a necessity and what is a luxury.


    2 members found this post helpful.

  4. #44
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    mvp, there is at least one documentary that explains "the dark markets". "The Warning", a Frontline investigative report.



    ... but, Brooksly Bourne (Borne? ?), I don't remember how to spell her name correctly, but Google her and follow her story and you will find, what appears to be, some very accurate information on the "bundled high-risk mortgage" commodity trading issue and the beginnings of (purposefully? created financial architeture) what appears to be a still unravelling financial HUGE %^F#@ MESS.


    1 members found this post helpful.

  5. #45
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    Quote Originally Posted by jetsmom View Post
    Yeah...it used to be that a minimum wage job is what people got when starting the workforce. They also didn't expect to be able to pay rent, get a new car, own a horse, have the newest/best TV, phone (now computer/Ipad), cable, etc, much less buy a house until they had moved up in their careers. It kind of cracks me up to see people complain about how they are barely getting by, while they use a computer, own a car and own a horse and tack, which is a luxury item unless you have a working ranch/carriage business, etc. There is a huge disconnect between what is a necessity and what is a luxury.
    of course you assume that they bought that computer, that they are paying for that internet and that the car they are using is a good one.

    Again.

    I bought the computer that DD is using. It was the first one I bought in 99 and she had a friend cobble together bits and pieces from some he had moved on from. No "newest/bestest" for her.

    I pay for the internet, because I don't want to do w/o it.

    I bought her car, a used one with over 50,000 miles on it at the time because I wanted her to be able to get to a job. It's falling apart now, and she's still driving it.

    Her cellphone is the same one she got as a gift 5 years ago.

    Jetsmom, you don't seem to understand how some people are squeaking by. Are you even hearing what some here are saying about these people who are busting their *ss to make ends ALMOST meet?


    4 members found this post helpful.

  6. #46
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    Quote Originally Posted by threedogpack View Post
    of course you assume that they bought that computer, that they are paying for that internet and that the car they are using is a good one.

    Again.

    I bought the computer that DD is using. It was the first one I bought in 99 and she had a friend cobble together bits and pieces from some he had moved on from. No "newest/bestest" for her.

    I pay for the internet, because I don't want to do w/o it.

    I bought her car, a used one with over 50,000 miles on it at the time because I wanted her to be able to get to a job. It's falling apart now, and she's still driving it.

    Her cellphone is the same one she got as a gift 5 years ago.

    Jetsmom, you don't seem to understand how some people are squeaking by. Are you even hearing what some here are saying about these people who are busting their *ss to make ends ALMOST meet?
    Owning a car, computer, cell phone even used, isn't "squeaking" by. Having a parent provide them, still doesn't make it "squeaking by". Does she live at home? If so, and she really is working 80 hrs a week, at 8.00 hr she'd make about 2700 a mo. Definitely not squeaking by.



  7. #47
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    Quote Originally Posted by jetsmom View Post
    Owning a car, computer, cell phone even used, isn't "squeaking" by. Having a parent provide them, still doesn't make it "squeaking by". Does she live at home? If so, and she really is working 80 hrs a week, at 8.00 hr she'd make about 2700 a mo. Definitely not squeaking by.
    read carefully, DS was working 80 hrs a week. DD is working 6 days a week. So it isn't 80 hours. It's 48.

    edit: and when he was working 80 hrs....it was at 3 jobs. All of them min wage.
    and she's still just squeaking by. No matter your standards, she cannot afford to pay rent/utilities/gas and repairs for her car.

    it DOES matter if I help her. Without my help she couldn't have gotten the 40hrs per week job she drives to.


    2 members found this post helpful.

  8. #48
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    Default yikes three dog!

    Of course I am not talking about companies like that. They deserve to be driven out of business. And as far as big bonuses for executives, I am opposed to that too. But I do not know how that is to be regulated. Execs aren't covered by union agreements. Perhaps there should be a cause and effect. But all I know is that for the forseeable future, the employer holds the whip hand. For every dissatisfied worker, there are at least 5 waiting to take it.
    I know that there are many hardworking youth-YA,out there, but there are a lot who want it all NOW.
    And I freely admit, after working HARD for 40 years, I do want something a little softer. but I am getting by, and working at the church for over a year, has helped me to become something more than a pewsitter. [Sorry, that goes on my other post!] And with my mom being in hospice, I don't have to worry now about missing work for her. My niece is a teacher, and very much into comsumables. She is ALWAYS broke, but spends like there is no tomorrow. So she has been working at events at the Chiefs games for a dance studio. It makes her a little money for dance classes for her kids. But it is VERY little. I have been doing some mystery shopping, but the pay does just trickle in. Hopefully, the economy will improve, but I don't see that in the immediate future. We will just have to tie a knot in the rope and hang on.
    Another killer of threads


    1 members found this post helpful.

  9. #49
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    Quote Originally Posted by Larksmom View Post
    Of course I am not talking about companies like that. They deserve to be driven out of business.
    I don't know that they need to be out of business, but I think it's *better* business for them to upgrade and help themselves and their employees.

    And as far as big bonuses for executives, I am opposed to that too. But I do not know how that is to be regulated. Execs aren't covered by union agreements. Perhaps there should be a cause and effect. But all I know is that for the forseeable future, the employer holds the whip hand. For every dissatisfied worker, there are at least 5 waiting to take it.
    I don't believe there is much to be done about business owners who take bonuses on the backs of their employees. The only way for that to change is for other employers to be attractive enough in some way for the employees to want to stay with them.

    Locally we have a person who runs a fresh meat/produce business. She works her employees 6 days a week, with one week off a month for inventory (the workers not doing the inventory have a paid week off and they rotate through employees). She expects very high quality work from those she employs but she compensates well for it and has a long line of people who wish to work for her. She has a very stable employee staff as well.

    There is not a doubt in her mind that she runs her business on a very fine margin of error....but I think other local employers should take a look at how/what she does.

    I know that there are many hardworking youth-YA,out there, but there are a lot who want it all NOW.
    undoubtedly, I just wanted to point out that it's not all the young people and that some are having a legitimately difficult time, due to the disparity between inflation and wages.



  10. #50
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    Quote Originally Posted by threedogpack View Post
    Not in China they don't. Not in Mexico they don't. Here in the USA, someone pays.
    Well actually they do pay. The worker pays, with his/her health or life.
    "We can judge the heart of a man by his treatment of animals." ~Immanuel Kant



  11. #51
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    Quote Originally Posted by LauraKY View Post
    Well actually they do pay. The worker pays, with his/her health or life.
    Point.



  12. #52
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    Quote Originally Posted by LauraKY View Post
    Well actually they do pay. The worker pays, with his/her health or life.
    And the societies (in China, Mexico as mentioned) pay in the form of instability.
    The armchair saddler
    Politically Pro-Cat



  13. #53
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    Quote Originally Posted by LauraKY View Post
    Well actually they do pay. The worker pays, with his/her health or life. Their environment pays too, for lack of pollution controls.
    point again.



  14. #54
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    Quote Originally Posted by mvp View Post
    And the societies (in China, Mexico as mentioned) pay in the form of instability.
    I dunno about this. I think the instability comes from more than just working conditions and low pay



  15. #55
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    Extreme poverty certainly helps fuel the Drug Wars. And that is only one factor.



  16. #56
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    Quote Originally Posted by threedogpack View Post
    I dunno about this. I think the instability comes from more than just working conditions and low pay
    I think people comparing the US and the developing world would disagree. Make people comfortable enough and they won't get off their a$$es and revolt.

    Our social safety nets are a fine and useful thing for those who dig the status quo.
    The armchair saddler
    Politically Pro-Cat



  17. #57
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    Quote Originally Posted by BaroquePony View Post
    Extreme poverty certainly helps fuel the Drug Wars. And that is only one factor.
    Absolute point. When people have nothing left to lose.....

    and extreme poverty will also fuel poaching (Africa) and importing banned items into other countries.


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  18. #58
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    Quote Originally Posted by jetsmom View Post
    Yeah...it used to be that a minimum wage job is what people got when starting the workforce. They also didn't expect to be able to pay rent, get a new car, own a horse, have the newest/best TV, phone (now computer/Ipad), cable, etc, much less buy a house until they had moved up in their careers. It kind of cracks me up to see people complain about how they are barely getting by, while they use a computer, own a car and own a horse and tack, which is a luxury item unless you have a working ranch/carriage business, etc. There is a huge disconnect between what is a necessity and what is a luxury.
    I suspect a roof over your head, adequate food, and just maybe health care is not a luxury. A significant percentage of minimum wage workers require food stamps and medicaid just to survive.
    "We can judge the heart of a man by his treatment of animals." ~Immanuel Kant


    2 members found this post helpful.

  19. #59
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    Quote Originally Posted by Frank B View Post
    What has not been mentioned so far is the impact the Community Reinvestment Act played in initiating the housing market collapse. By the government pressuring lending institutions to make loans to under-qualified and even unqualified applicants, it kicked off a mindset of lowered standards for all loans, even those non-CRA related. Add to that the lack of diligence by Federal regulators at the SEC, Fannie Mae, and Freddie Mac regarding the trading of mortgage-backed securities and "derivatives" and the scenario for a downward spiral was set.

    Quite a few politicians and their mainstream media apologists have tried with limited success to whitewash CRA involvement, but it just doesn't wash. It's not simply Democrat vs Republican, it's an irresponsible government vs sound fiscal policy argument.

    Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax Lending

    The True Origins of This Financial Crisis

    Community Reinvestment Act To Blame For Mortgage Crisis

    A lot of people took advantage of the zero-down sub-prime "liar's loans" and came out okay. They simply computed the value of a house they could afford based on the old 20% down, prime-plus 5% rule of thumb and bought accordingly. When housing values dropped, they still were not "under-water" on their loans. But you won't hear about them in the whine-whine mass media.

    (Let's see how many of those red "thumbs-down" points I can rack up on this post.)
    You're overstating the effect of the RCA.
    A bigger contributor to banks literally throwing money at people was the economic upsurge in former 3rd world countries. Places like Brasil, China, India etc have seen HUGE economic explosions and wealth creation in the last decade, decade and a half. A lot of the wealth generated in those countries (by both super rich and even upper middle class types) was made available to US banks, as traditionally the US housing market was seen as one of the the safest investments in the world. The banks basically had more capital than they knew what to do with, hence lowering of standards and throwing money at people who were under qualified. Money sitting at a bank, makes no money, it has to be loaned out, either to individuals, businesses or other banks.
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  20. #60
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    Quote Originally Posted by mvp View Post
    I think people comparing the US and the developing world would disagree. Make people comfortable enough and they won't get off their a$$es and revolt.

    Our social safety nets are a fine and useful thing for those who dig the status quo.
    1/2 point. Comfortable is still more than good wages. But I do totally agree that our social safety nets are a HUGE benefit to our country



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