Not Again... Americans who can't afford their mortgage up 145%

[rkymtnman]

Dude, the bottom 5% are homeless.

you are miising my point which is the poor in this country are solvent for maybe a 2 weeks to a month, the 1%rs can handle a financial crisis for a year or more.

the crisis will start and grow out of control when the poor start defaulting, then the middle class, not when or if the rich do.

 

[jonsnow399]

a 1%er is a person, not a business. the people i know that i'm referring to are the ones that got a 911 for their first car, 5 million when they turned 21 kinda people. paid cash for everything, no need to borrow kinda people.

1 percenters OWN businesses for the most part. Even if they inherited piles of cash its still stupid to buy a house for cash and lose the tax deduction and with great credit you can get low and even 0 percent financing, you'd be crazy not to take advantage of that.

 

[jonsnow399]

you are miising my point which is the poor in this country are solvent for maybe a 2 weeks to a month, the 1%rs can handle a financial crisis for a year or more.

the crisis will start and grow out of control when the poor start defaulting, then the middle class, not when or if the rich do.

The really poor can't even get credit, or they owe $200 to the payday lenders. not gonna break the economy

 

[TacoMac]

1 percenters OWN businesses for the most part. Even if they inherited piles of cash its still stupid to buy a house for cash and lose the tax deduction and with great credit you can get low and even 0 percent financing, you'd be crazy not to take advantage of that.

That is spot on.

When you buy something for cash, not only are you out your cash reserves which increases the amount you're leveraged and lowers your net worth, you wind up constantly paying taxes and you get no deduction on interest of any kind to help offset upkeep costs and taxes.

You lose coming and going.

What's more, you really can't be sure what property values and tax assessments are going to do, so it's very, very, very foolish to buy outright.

 

[ttystikk]

a 1%er is a person, not a business. the people i know that i'm referring to are the ones that got a 911 for their first car, 5 million when they turned 21 kinda people. paid cash for everything, no need to borrow kinda people.

They don't need to borrow, but the corporations their fortunes are built on certainly do.

 

[TacoMac]

The really poor can't even get credit, or they owe $200 to the payday lenders. not gonna break the economy

Actually, yes they can. Hence all the "good credit? bad credit? no credit?" sales you see at furniture stores, car dealerships and appliance centers and department stores.

They simply charge hopelessly outrageous interest rates in an effort to get the actual principle back ASAP.

When (not if) the default happens, it's written off to insurance and once again tax payers pick up the tab.

 

[ttystikk]

The secret to making money is simple: never use your own money. Use other peoples money. That way, worst case scenario, you file for bankruptcy protection and walk away with your money in tact and let the taxpayers, insurance companies and low level investors pick up the pieces.

Donald Trump has done it 4 times. It works.

And it's destructive to the society that allows it. This is an example of 'Tragedy of the Commons', where what is in an individual's best interest is harmful to the society as a while, and in fact it's for situations like these that we have laws and governments to protect us.

The Trumps of the world need to be held accountable for the results of their decisions. If they benefit from good ones but don't pay for the bad ones, there's no incentive to be smart with your money! This concept is known as Moral Hazard, a term you may have heard in reference to our 'too big to fail' banks now fleecing our financial system. Again.

 

[ttystikk]

you are miising my point which is the poor in this country are solvent for maybe a 2 weeks to a month, the 1%rs can handle a financial crisis for a year or more.

the crisis will start and grow out of control when the poor start defaulting, then the middle class, not when or if the rich do.

The poor are homeless or close to it. Their crisis is every day. They have nothing to default on. They won't crash the economy because they don't participate in it.

The crisis will happen when the rich overextend themselves. My point is that wealth inequality has grown to the point where even the middle class are not a significant sector of the economy anymore.

You want to know who wrecked it last time? Wall Street and the 'too big to fail' banks. NOT the poor, or the middle class, although they certainly bore the brunt of the consequences.

Why do you think it will be different next time? We sure didn't change the system to prevent it from happening again, nor did we punish anyone responsible for doing it.

See, 'Small enough to jail' for an example of just how fucked up and corrupt our system has become;

https://www.eastbayexpress.com/oakland/abacus-small-enough-to-jail-looks-at-wall-streets-small-fall-guy/Content?oid=7251284

 

[TacoMac]

And it's destructive to the society that allows it. This is an example of 'Tragedy of the Commons', where what is in an individual's best interest is harmful to the society as a while, and in fact it's for situations like these that we have laws and governments to protect us.

The Trumps of the world need to be held accountable for the results of their decisions. If they benefit from good ones but don't pay for the bad ones, there's no incentive to be smart with your money! This concept is known as Moral Hazard, a term you may have heard in reference to our 'too big to fail' banks now fleecing our financial system. Again.

While I do agree with you, as part of the small minority of people that actually pay their bills, I'd not be able to retire without the system and live the way I do.

So it does have it's uses for those that play the game legally. Sadly, the rules don't apply to the mega rich for one simple reason: they can afford to pay off the attrition and lawyer up far better than the government can in most cases.

I've always thought that you should only be able to file for bankruptcy protection once ever 15 years. That right there would eliminate a VAST amount of the outright fraud being perpetrated today.

 

[ttystikk]

1 percenters OWN businesses for the most part. Even if they inherited piles of cash its still stupid to buy a house for cash and lose the tax deduction and with great credit you can get low and even 0 percent financing, you'd be crazy not to take advantage of that.

True, but you're still looking at the rose in the frosting of the rotten cake...

The big Institutions are the ones that will destroy our economy again, not the little guy.

ALL the little guys put together aren't as much of a factor in the economy as just one of the 'too big to fail' banks.

THAT'S WHY THEY'RE 'TOO BIG TO FAIL', GET IT?

They need to be broken up so they can't wreck our economy!

 

[ttystikk]

The really poor can't even get credit, or they owe $200 to the payday lenders. not gonna break the economy

...and they now make up some 30% of our population. That's just sad and a stark indicator of how badly our society is working these days.

 

[ttystikk]

Actually, yes they can. Hence all the "good credit? bad credit? no credit?" sales you see at furniture stores, car dealerships and appliance centers and department stores.

They simply charge hopelessly outrageous interest rates in an effort to get the actual principle back ASAP.

When (not if) the default happens, it's written off to insurance and once again tax payers pick up the tab.

Still a tiny, insignificant percentage of total debt. Defaulting at Rent-a-Center is not going to crash the economy. If Goldman Sachs defaults, everyone, and I mean EVERYONE, is fucked.

 

[ttystikk]

While I do agree with you, as part of the small minority of people that actually pay their bills, I'd not be able to retire without the system and live the way I do.

So it does have it's uses for those that play the game legally. Sadly, the rules don't apply to the mega rich for one simple reason: they can afford to pay off the attrition and lawyer up far better than the government can in most cases.

I've always thought that you should only be able to file for bankruptcy protection once ever 15 years. That right there would eliminate a VAST amount of the outright fraud being perpetrated today.

The people who are getting away with financial murder are the ones walking through the revolving door between big business and government. Most bankruptcies are individuals and small businesses. You'd just punish the little fish while letting the sharks keep feeding.

 

[TacoMac]

Still a tiny, insignificant percentage of total debt. Defaulting at Rent-a-Center is not going to crash the economy. If Goldman Sachs defaults, everyone, and I mean EVERYONE, is fucked.

That's where you're wrong.

8 in 10 Americans are swimming in debt. This debt rates anywhere from the thousands of dollars up to the 100's of thousands of dollars. Multiply that by 150 million and it very rapidly leads to a trillion dollars.

That's exactly what caused the housing bubble that led to the 2007-2008 crash: relatively small loans given to not thousands, not millions, but 10's of millions of people who were incapable and/or unwilling to pay them back.

With credit, things work the opposite of how you think: it doesn't roll down hill. It rolls up hill and ends at the big banks who underwrite all of those 10's of millions of little 2500 dollar TV, 150,000 dollar home, 40,000 dollar car purchases.

That's where it all comes from more than anyplace else. Not surprisingly, it's where all the rich get their money from to begin with: the credit taken out by the poor.

 

[whitebb2727]

The instinct to save the Institutions was sound.

The mistake was leaving the people who fucked us over in charge, instead of perp walking them out of their wood panels boardrooms and putting them on trial for their massive malfeasance.

Car industry is a great example; the execs at GM and Diamler Chrysler over extended themselves badly, bankrupted their corporations- then flew to Washington in their private jets to beg for cheap loan guarantees. Those motherfuckers should have been kicked out the door with no golden parachutes!

Ford, by stark contrast, had seen the economic headwinds coming and had sold off relatively unprofitable divisions and recent acquisitions like Volvo, Jaguar and Aston Martin. Thus they were well printed for the form and ready to take advantage of their prudent moves to increase market share vs the stupidity of the others.

They we plenty pissed when the give bailed out their irresponsible competition on the cheap, leaving them with nothing to show for their efforts! They didn't even need the loans they were offered.

We have begun to habitually reward bad business behavior and let the (rich) idiots who make those decisions off the hook. The optics are as bad as they are clear; if you're rich, the country will save you from your own stupidity and not punish you for your crimes- but if you're middle class or lower, we'll take your house and throw you in prison for stealing a loaf of bread to keep from starving.

What amazes me is why We the People haven't emptied into the streets and demanded that Justice be done. Maybe as a country we're too stupid to see what's happened and we deserve to fail.

Trump is merely presiding over a whole new round of the rich stealing from everyone else and the American citizens are once again sitting on their hands.

Nah. Fuck em. Let them crash and burn. Who cares. New banks and manufacturers would've taken their place.

Yea. It would hurt and people would lose jobs. I think it would be better in the long run.

 

[ttystikk]

That's where you're wrong.

8 in 10 Americans are swimming in debt. This debt rates anywhere from the thousands of dollars up to the 100's of thousands of dollars. Multiply that by 150 million and it very rapidly leads to a trillion dollars.

That's exactly what caused the housing bubble that led to the 2007-2008 crash: relatively small loans given to not thousands, not millions, but 10's of millions of people who were incapable and/or unwilling to pay them back.

With credit, things work the opposite of how you think: it doesn't roll down hill. It rolls up hill and ends at the big banks who underwrite all of those 10's of millions of little 2500 dollar TV, 150,000 dollar home, 40,000 dollar car purchases.

That's where it all comes from more than anyplace else. Not surprisingly, it's where all the rich get their money from to begin with: the credit taken out by the poor.

No, what crashed the economy in 2008 were defaults in Credit Default Swaps and other instruments built on bad lending practices.

The NINJA loans were part of it but would not have done the damage they did without the fraudulently built derivatives.

Y'all are just not thinking on the right scale. Think bigger.

 

[TacoMac]

Nah. Fuck em. Let them crash and burn. Who cares. New banks and manufacturers would've taken their place.

Yea. It would hurt and people would lose jobs. I think it would be better in the long run.

That's the part that's tricky.

They let it go in the 20's/30's and it led to such devastating results that only WWII was able to bring us out of it. If not for the war, it may have taken decades to get out from under.

That's the big problem today: we just don't know how bad it would get. The banks know this, which is why they keep doing the same things over and over - they're positive that the government simply can't risk a half century of financial devastation and will bail them out to prevent it.

 

[ttystikk]

Nah. Fuck em. Let them crash and burn. Who cares. New banks and manufacturers would've taken their place.

Yea. It would hurt and people would lose jobs. I think it would be better in the long run.

I think that jailing the perpetrators would be far less destructive to the country and the economy while still holding the right people accountable.

Your way would create another, IMHO needless, Great Depression.

 

[TacoMac]

No, what crashed the economy in 2008 were defaults in Credit Default Swaps and other instruments built on bad lending practices.

You obviously don't know what a credit default swap is.

Remember all those 10's of millions of loans carried by 10's of thousands of banks? Those were all bundled into 10's of millions of 401k's and other investment portfolios. Then, they actually began betting against those very loans because they knew nobody would be able to pay it all off.

That is the definition of what happened. They bet against themselves. They all knew full well nobody would ever pay off all those 10's of millions of bad loans. The credit default swop was just one more way for them to make money before the bottom fell out.

 

[ttystikk]

That's the part that's tricky.

They let it go in the 20's/30's and it led to such devastating results that only WWII was able to bring us out of it. If not for the war, it may have taken decades to get out from under.

That's the big problem today: we just don't know how bad it would get. The banks know this, which is why they keep doing the same things over and over - they're positive that the government simply can't risk a half century of financial devastation and will bail them out to prevent it.

Yes. 'Too big to fail' should mean 'big enough to break up' so they don't have the leverage to destroy the whole economy.

We're watching the Roaring Twenties all over again in the news today and I'm telling you all right here, right now, that if we don't make huge changes in how our economy and political systems are run, we're going to have another Great Crash.

For the record, everyone I see who is trying to be part of the solution is being shouted down and discredited by those making/stealing the big money. This all but guarantees things will end very badly.