OK, what is happening. It's a Saturday morning and the cable channels are full of gloom and doom (except the FOX News where Murdoch has come on and said I can make money during this). What happened to Saturday morning cartoons?
So I have at least found a fair and simple explanation dated last Sunday September 16, 2001 from the San Francisco Chronicle about the source of all this shit:
The median home value nationwide was $120,162, up nearly 52 percent from $79,100 in 1990.
The median size of houses increased from 5.2 rooms to 5.8 rooms, and the percentage of houses with eight or more rooms grew from 13.2 percent to 14.6 percent.
Median household income also was up, to $41,343 from $30,056 in 1990.
But there was one up that was more upsetting than uplifting: the median mortgage cost. It rose from $737 a month to $1,307.
Furthermore, more than a quarter of homeowners nationwide have mortgages that exceed 30 percent of their income. That doesn't leave much margin for error in the bumpy road of home economics.
Some experts speculate that the increase in home equity loans, which are included in the housing cost statistics, may partly account for the much higher mortgage payments.
There's also another likely factor - and this one's a down trend.
American home buyers are putting less and less down on their mortgages, according to Mortgage Information in San Francisco, the country's largest monitor of home loan repayments.
Last year, 41 percent of them made down payments of less than 20 percent, and 15 percent put 4 percent or less.
So in their desire for homeownership, more families appear to be ballooning their monthly payments, a dangerous trend, especially for inexperienced first- time buyers.
THIS STORY IS EIGHT YEARS OLD! EIGHT YEARS OLD! IT IS FROM 2001!
Thus my headline above.
The U.S. Government is going to spend $700,000,000,000 by Monday to buy 5,000,000 "BAD" mortgages. Several sources say that they will actually have to spend $1,600,000,000,000. That is on top of the $600,000,000,000 already poured on the flames this week. Using the $1,600,000,000,000 figure that is $320,000 per mortgage.
So, we, you and I, the American taxpayers are going to buy 5,000,000 mortgages from banks or whatever you call them that have spent 7 years selling money to people who could not pay it back in order to make profits and salaries for the shareholder and officers of those banks. Meanwhile we are kicking 5,000,000 of our fellow citizens out of their home?
WE are rescuing the "ECONOMY", Wall Street, the Fat Cats? Why did we not rescue the 5,000,000 mortgage holders, the families, the homes, our friends , our neighbors, our family members sometime over the last seven years? Why didn't we do THAT two weeks ago instead of this today.
Oh, NEWS FLASH!, the deal being put together by the Government will allow the U.S, to barrow from China, Kuwait, Saudi Arabia, et. al. up to a total of $11,200,000,000,000 to get us out of this mess.
Who are the radicals now?
I'm going out and mow my lawn, while I still own it,
6 comments:
DrL: While I agree about the utter culpability of the political and finance systems and am at least as appalled as you are, I wouldn't bail out the five million people either If you've put little or nothing down; if you pulled money out and got to spend it tax-free; if you purchased a house far above your ability to pay for it, it's not your home and in the first and third case, it never was. Rather than the rich on one side and the poor on the other, this one lines up with the prudent on one side and the stupid, the reckless, and the greedy on the other. Sure it's another big black mark on the Bush record as he vies with Buchanan for "worst President ever" , but Congress helped every step of the way, quashing what few attempts there were to rein in the worst practices and an out-of-control Fannie Mae - and now when matters lie down payment are more clearly needed to avoid an even more ectnded tranwreck, is STILL doing at it can to pander.
Nor would I bail out 5,000,000 families. Not a few of these toxic debts were incurred by greed. Those we take and keep. What I would do is bail out those that could keep their homes under some reasonable system of payments consistent with what they could pay even if we have to be generous in the extreme. So the deal is not all together altruistic. An empty house will be a vandalized house. An empty house will pull down the value of the houses around it. If I as a taxpayer own it, I want it to retain its value and not drag down things around it. It is good to help others. It is even better to all of ourselves. Besides some of the people especially the illiterate and English limited were conned into some of these deals. When your banker tells you that you can handle a debt you tend to believe them. I wouldn't call them stupid. They were too trusting, too gullible, ignorant maybe, and yes some are stupid. So where do we send them when we kick them out of our newly purchased houses?
Besides, a while back we changed the bankruptcy laws out of shear greed and many of these defaulted mortgages fall under that system. One serious stay of a week at an ICU can cost twice as much as a home in Oklahoma City.
I've watched that happen this year to a person I know, lucky for him he had good insurance and was rich too boot.
It is the "poor" who need our help. The poor in cash, the poor in health, the poor in knowledge, the poor in spirit. But really, you already know that, and I admit sometimes it just galls me to do it myself. But this is a matter of public policy, not pride or profit.
Any adult in America who is ignorant of life skills like personal finance is, by my idiosyncratic definition, stupid because they were not honest enough with themselves to admit the lack or filled with the complacency of the ignorant everywhere or too laziy to do something about it.
What do you say that they keep their house if no-one is willing to offer the mortgage holder - the true owner - more for it. No vacant house - just new and responsible owners.
Well, were that it were just economics, but it becomes more.
The poor are more likely to default on their mortgages. People of color are more likely to be poor, but their are plenty of poor whites as well.
When the poor default, they normally lose less equity than other defaulters. So when the poor were taken to the cleaners by the greedy lending practices the losses to the banks etc. were greater than normal.
So now we have the phenomena of low equity holdings being in potential default at the same time as the actual value of the home has fallen below the mortgage minus equity being held. Thus our economic problem of Funny Money as we called in 1987 when Penn Square bank took out banks around the world with its greed.
Now the second problem is one that popped up in the 1930's as well. When you dispossess these people of a place to live, where do they go? Thus we are about to screw ourselves big time with the Social Problem of "Migrant Okies" again.
Will we have Bushvilles down by the river? Will we have gun toting squatters who won't leave their default home? Will we see some of the burn it all down and leave actions from the disgusted people dustbowl days? Will we step into socialism again like we did in the 1930's?
It is not fair, this bail out. It will cost the average "TAXPAYER" about $10,000. No shit, that's the amount. So do we bail out the banks alone? We have to bail them out. Don't we? Do we bail out everybody? Do we spread the pain around? Life's not fair, so whom shall we screw.
Me, I think I'll built that 8 foot fence I was thinking about and buy a very mean dog to live behind it.
Sinners and saints both get saved when rescuers go to the aid of a sinking ship.
"Sinners and saints both get saved when rescuers go to the aid of a sinking ship."
Perhaps, but as the Titanic has shown the poor and the rich do not.
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