Everybody Freeze! by Hero

Quote:
Originally posted by Kirkules:
Next time someone is stupid enough to offer me such a thing I'm going to take them up on it.

Kinda takes away the incentive for prudent decision making, don't it?

This is totally screwing the people who made the right call and resisted the urge to over-indulge in credit. If there was actual fraud going on, i.e. - if someone was lied to or cheated, fine, prosecute the crooks and move on. But bailing out over-ambitious yuppies who play fast and loose with credit is an insult to people who bother to use their judgment.

This sort of crap basically makes successful investment a matter of government fiat, rather than good sense. Good thing we've got solid conservative leadership to shoot this down.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Thursday, December 6, 2007 12:50 PM

wow...

its nice to agree on something,

thanks for the post Hero.

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Thursday, December 6, 2007 1:41 PM

SICKDUDE

My understanding is that this aid will only be available to:
1. People who are not already behind in payments
2. People who did not buy a house for investment
3. People who are financially strapped (naturally)
4. People who got a sub-prime ARM only; normal ARMs don't apply.

Further, this will freeze the payments at the current rate.

Obviously, this is only a atop gap measure. The majority of the foreclosures will still happen, and home prices will continue to drop for the rest of us.

"Your gratuitous jello awaits." - Dr. Helen Magnus, Sanctuary

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Friday, December 7, 2007 3:54 AM

HERO

Quote:
Originally posted by Righteous9:

wow...

its nice to agree on something,

thanks for the post Hero.

Yeah, sounds like the President is taking action that finally has a general consensus around these parts.

My take is actually based on a legal principal similar to product liability. The idea is to make the party most able to bear the cost and most able to correct the problem at the source to be responsible for damages. That makes good sense to me so long as we don't destroy the loan industry out of our good intentions. That seems unlikely since some rate cuts and FED emergency loans combined with foriegn investment because of the weak dollar can mitigate the damage (and stabilizing rates means people are far more likely to avoid defaulting which is good for people and for the industry).

The good news is I see more rate cuts in the future which should jump start the housing market which in turn will help stabilize the dollar (along with the surge in domestic manufacturing and exports).

The recession seems less likely today then it was Monday, but its still a good possibility... especially if the Congress raises taxes.

H

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Friday, December 7, 2007 8:23 AM

Quote:
Originally posted by Hero:
Yeah, sounds like the President is taking action that finally has a general consensus around these parts.

Hehe... do the republocrats ever really disagree? As long as the power is firmly with the government and its owners (hint: not us), dems and repugs are happy as clams.

This decision only further underlines the liberal, big government, big spending, anti-freemarket sympathies of the neo-cons. The Bush administration is the love child spawned from an unholy tryst between the nanny state and the fascist state.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Friday, December 7, 2007 1:05 PM

Quote:
Originally posted by Hero:
The recession seems less likely today then it was Monday, but its still a good possibility... especially if the Congress raises taxes.

You seem to think that raising taxes now would be a bad idea. Given that the Iraq war is being funded 'off the books', and it is estimated that
"The National Debt has continued to increase an average of $1.53 billion per day since September 29, 2006!" http://www.brillig.com/debt_clock/
And I've read (sorry, don't have the URL handy) that the Government published numbers suggest they are not getting sufficient in loans to cover said gap; what do you expect to be the result of the status quo?

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Friday, December 7, 2007 1:23 PM

Sergeantx,

the lending companies have all the jargon, all the loopholes, all the fineprint, all the legalities in their back pocket. The average person just trying to make a better life for him and his family could put a lot of effort into the subject in his spare time and still come away wanting.

I hardly call bailing out everybody who made a mistake here ideal. What would have been ideal was to have some protections in place, and some requirements of these companies to both inform in great detail, the risks, the odds of said risks...etc. maybe even some regulations about sub-prime loans, i dont' know.

The United States legal and economic system should not simply be the function of making people who know best how to take advantage of the general public rich, at the expense of the general public and the nation at large.

I'm not going to go into great detail about what I think should have been done differently, because realty is something I have never had any cause to know about, and I know very little. But something has stunk for a long time to me about how things were going.

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Friday, December 7, 2007 1:57 PM

Quote:
Originally posted by Righteous9:
The United States legal and economic system should not simply be the function of making people who know best how to take advantage of the general public rich, at the expense of the general public and the nation at large.

That pretty much sums it up my view. We've created an environment where financial interests have more incentive to hire effective lobbyists than they do to make prudent financial decisions. The game these days is about who you know and what kind of deal you can make with the government stoolies. So much for the free market.

What you people don't get, never get, is that the government is the principal tool for bilking the general public. Just a buncha hired thugs masquerading as regulatory agencies.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Friday, December 7, 2007 10:04 PM

Now how could I not get that...

Unless the masses regulate the government and make it do our bidding, something we do by paying attention and promoting civic responsibility as a societal norm, government will be there for the highest bidder.

Where we disagree is why you think that a system of no government intrusion would be better, cuz honestly, I don't see the difference between being used like chattel by powerful companies that aren't regulated by laws, and being used like chattel by companies who use the laws in their favor. In the end its the same thing. We get screwed.

What exactly are fair terms when you take government out of the equation? I see no power in a single individual attempting to demand a fair wage from a corporation. The corporations will win every time.

Like it or not, there have been wins for the people that we have enacted by using our government. Government can be the great equalizer. It is our weapon..we just keep leaving it unguarded.

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Friday, December 7, 2007 10:27 PM

FLETCH2

An observation.

US financial transactions don't appear to be equitable, in that it seems to be allowable for one party in the agreement to have more power than the other. For example, last week I got my regular notification from my CC company that they unilaterally changed the terms of our agreement again. That is standard practice for American financial companies and almost always illegal most everywhere else. Further, if a class of Harvard law students cant actually decide what a CC agreement means what chance does Joe public have?

It needs to be fixed by statute in such a way that only a limited subset of standard contracts should be legal. I'm not one for excessive regulation but this is market distorting because in the absence of good information and equitable deals free markets cant operate.

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Saturday, December 8, 2007 3:30 AM

Fletch,
Until recently I used a Discover Card as issued by Sam's club; after raising interest rates on me, I closed the card out. I had previously been using the card for most of my purchases, generating 4%+ per purchase in revenue for them (I understand that's what they charge merchants).
Over the past year, I probably only ended up paying interest one month, and then less than $300. balance at the time. This is added only so you can 'do the math' and guessitmate how much money extra they might ring out of me for raising the interest rate (not much) vs how much they are losing from merchant fees.
All I can say is, if your CC abuses you, close it. I have always run my finances so if needed, I can chop them all up, and go to cash / checking.

I have an IRA with company a particular companyh I will call Y. They have a harder time changing terms for existing modes of investment than CC companies. They keep trying to get me to switch over to the 'new' versions; and I refuse. Why? Because the new investments require use of arbitration, and blocks class action suits. Why do I care? **This is theoretical only, I know of know such offense by this or any other company. Let's say I find out company xyz is using an unethical rounding method that shaves tenths of pennies for their profit. Costs each of 10 million investors $.10 per year. If I must go to arbitration, I might get my 10 cents back... not smart, eh? Cheaper to let them keep the money, right? If class action suit is on the table, I get the lawyers to get the million dollars back for -everyone- plus another .5 million in penalties. Company XYZ learns that shaving pennies is a bad practice.** As a consequence, I stay with the old investments which, interestingly enough, have actually managed to keep up and at time exceed the returns my broker assured me I'd get in the new investments with the arbitration requirements.

HR Block in 2005 (well 2006, but for 2005 taxes) went to a 'by default' to arbitration agreement; I don't know if they still do or not. You could opt out; but -had- to do it later. I told them I wanted to opt out 'now'; they said they had no way to accommodate that. I explained I felt that was inconvenient to force me to do it later. They appologized and said there was nothing they could do. I walked out; and sent a letter to HR Block explaining I was done with them if they did not change their policy. 2006 (april 2007), I checked, they had the same policy. In 2007, I won't bother checking.

So. Where does this power these places have to 'set terms' come from? Those people who don't understand or care, and hand them the power.

Don't like it, walk.

--------To the general thread discussion...

I must admit Mortgage is a bit rougher. I recommend you do business with local credit unions, read the terms. Most CU's are still customer oriented. You 'might' pay a bit more in interest rates or fees at the CU (and maybe not; it may be they are merely being more up-front and honest; search the competitors' fees, rates, and uphikes), but you will generally find the terms are much more consumer friendly than 'commercial banks.'

Frankly, I don't have much patience for the folks who bought 2 or 3 McMansions because 'they had to.' I've read some of the stories in Business Week shortly before the general population became aware of the sub prime mess, and the pure stupidity folks demonstrated in these articles makes me very skeptical these rich folks should be bailed out.

I'll be frank: Anyone buying a house over $400,000 should -not- be bailed out. Folks spending that much money on houses dang well should know enough to read and understand what they were doing.

In general, in order to be bailed out, I'd add a condition that these mortgage holders show they were deceived. If there's sufficient complaints against particular groups showing systematic abuse, those abusers need to be taken in for any legal violations, fraud, mail fraud, whatever we can make stick. Additionally, if anyone accepts the bail out, they should take a lien against the property. This lien will be for the estimated amount of any federal expense, direct or indirect, which is spent to 'bail them out'. The lien will be discharged at the time of sale for this amount, limited to the amount of profit realized by the sale. Keep in mind it won't be long until the bankers being hurt by this freeze will be coming to the fed gov looking to be 'made whole.'

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Saturday, December 8, 2007 3:38 AM

Quote:
Originally posted by Righteous9:
Where we disagree is why you think that a system of no government intrusion would be better, cuz honestly, I don't see the difference between being used like chattel by powerful companies that aren't regulated by laws, and being used like chattel by companies who use the laws in their favor. In the end its the same thing. We get screwed.

Wealthy, powerful interests don't, generally, bully people with violence or outright theft. That's easy enough to protect ourselves against. And they can't force us to buy their products - at least not without government help. They can only do those sorts of things with the cooperation of government because only the the government can force us to do things against our will.

So they spend money on lobbyists and get laws past to drive business their way, or to regulate away competition. They con the government, often the very citizens they're screwing, into passing laws forcing society to move in ways that further solidify their power and influence. Insurance companies, oil companies, defense contractors - there's a long list of companies whose bread and butter has become manipulating our government (thus manipulating us) into supporting their cause.

Large, influential companies have learned to use the public's naive desire for 'regulation' to ensure their dominance. It's become such common pattern in the states that it's a joke. We've even seen instances where companies instigate for regulation of their own industry, even though it will increase their own overhead and nominally decrease profits. Their magnanimous good will must be considered in light of what this regulation does to their competitive standing. If the regulation represents a fixed cost of doing business, if it increases base costs for their less wealthy competitors - it's a very real 'win'.

Quote:
What exactly are fair terms when you take government out of the equation? I see no power in a single individual attempting to demand a fair wage from a corporation.

So don't work for that corporation. What you're talking about isn't protecting a worker's rights. It's using the government to force a company to pay workers more than it's willing to. That't the problem I have with this mindset. To you folks, the government is just an effective way bully people around.

Quote:
It is our weapon..we just keep leaving it unguarded.

As long as people insist on using government as a 'weapon', or as a convenient way to force their will on others, I'll be trying to limit its power as much as possible.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Saturday, December 8, 2007 6:34 AM

sergeantx,

you seem to believe that without government, there would be no monopolies, there would be no blacklistings, there would be no corporate collusion, price fixing, wage fixing, violent recursion in the name of self-defense, no shanty town conditions resultant because there are no standards, responsibilities or rules, toxic toys, toxic homes, (if you don't want the toxic toy you can buy a nontoxic one right?), no self-fashioned defacto corporate governments over land and property that has slowly all fallen into their possesion(their land, their rules), cleaner air and cleaner water under a deregulated system, etc. etc.

Is that about right?

So you don't like the terminology 'weopon.' YOu don't think money is a 'weapon' of mass convenience that gives the rich and the corporations a huge advantage over the rest of us? Fuck, we need a weapon.

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Saturday, December 8, 2007 7:00 AM

Quote:
Originally posted by Righteous9:
you seem to believe that without government, there would be no monopolies

There's plenty to indicate that this is, in fact, the case. In all but the most extreme hypothetical situations, monopolies can't exist without the help of the government.

Quote:
there would be no blacklistings, there would be no corporate collusion, price fixing, wage fixing

These things go on despite government and, much like the monopoly question, are actually made easier by a heavily regulated environment.

Quote:
violent recursion in the name of self-defense

Not sure what "violent recursion" means, but the use of violence by anyone except the government is illegal and I support that. No argument there.

Quote:
So you don't like the terminology 'weapon.' You don't think money is a 'weapon' of mass convenience that gives the rich and the corporations a huge advantage over the rest of us?

No. 'Weapon' implies forceful violence. Money is innately peaceful. That's central to my point. When corporations wish to apply force against us, they do so through government, not through the free market. Government is a weapon wielded by those with the influence and motivation to manipulate others.

Government should exist to put a check on those who would use violence against others. Instead it's become the vehicle for doing so.

This all really boils down to basic philosophy of government. I hold, as did the authors of the U.S. Constitution, that the purpose of government is to protect freedom - and that's it. It's there to make it possible for millions of us, all with different values and different ideas of 'the good life', to get along without violence and theft.

It's not there to make us all equal. It's not there to create a 'great society'. It's not there to force us to be charitable, kind or friendly. It's not there to 'incent' people to do its bidding by granting favors to those who so. It's not there to redistribute income, property, luck or happiness.

The fact that all these things have become common expectations of government is the biggest problem we face, in my opinion.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Saturday, December 8, 2007 7:32 AM

We both agree that freedom is the priority here,

I just don't agree that under a "pure" capitalistic system we would be more free. Though I do think there'd be precious little need to outsource labor under that system.

so you would even take public education out of the equation? You don't see a need for an educated populace when trying to maintain a democracy?

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Saturday, December 8, 2007 8:31 AM

FLETCH2

Leadb, reason I don't worry about the latest rules change is that I don't carry a CC balance. I use it for certain classes of transaction-- internet purchases, car rental, booking flights the kinds of situations where CC are probably the only real way of completing the transaction.

For example, in the US at least it is extremely difficult if not impossible to hire a car without a credit card. You can in theory pay a cash deposit with some hire companies, but would you really want to travel with several hundred dollars in cash just to get a car at the other end? In practice you really have no choice and once you have a CC you play the game by their rules because they run a virtual cartel.

That is why though I sympathize with the sergeants position his logic is flawed. As Righteous says government is equalizer. It enforces a system of laws that _should_ allow for an equitable marketplace, one where people can trade effectively.

Many years ago I was sent on a business course detailing how different cultures look at making deals. The crux of the course comes down to this.

In northern European societies (and places settled by N Europeans like the US, Australia etc) business deals are regulated by contract, that is both parties enter into an agreement that quantifies the rights and obligations of both parties, once they sign that agreement it can not be arbitrarily changed by one party and if the agreement is broken the injured party can rely on the law for redress. When people say our society is based on the rule of law that is what they are talking about, the fact that governments can enforce contracts. That covers the whole gamut of potential contracts from buying a half dozen oranges to the grand social contracts that define our democracy.

The course went on to detail other business systems. In southern Europe and the mid east business dealings are made more by personal contacts, personal interaction and relationships. They are less reliant on contracts and instead use what I suppose we would call an honour system. If you shake hands on an agreement then the parties are honour bound to complete it and a person's reliability--- the degree to which he stands behind his agreements--- is capital of a sort, since if people dont think you are a reliable partner they wont do business with you.

Our civilisation, since at least the period of the Magna Carta if not back to the formation of the common law is based on the idea that agreements between people, entities, companies, corporations and even governments are based on contracts enforceable by the rule of law. The law is the gatekeeper without which the system fails to operate. If at any point a significantly large group of people come to believe that the law doesnt work for them or that the situation is not equitable we get an adjustment, the Magna Carta, the English Civil war and the US war of independence being examples of adjustment.

Who makes a law and who enforces it becomes very important in our system --- if the law is not seen to be equitable then trouble erupts-- the idea of the democratic system is that the people make the laws, that the framework that underpins our personal and commercial interactions is one we mutually accept to be fair and equal. Now we could do it the Islamic way, we could do business on a handshake and personal honour, but I'm not sure how many people would be comfortable doing that and it would limit business dealings to the few hundred people you personally know.

Anyway that's my 0.02c (none gold standard "fiat" money)

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Saturday, December 8, 2007 10:15 AM

Quote:
Originally posted by Righteous9:
You don't see a need for an educated populace when trying to maintain a democracy?

Yeah... that's a tricky one. On the one hand, I don't want my child's education left up to 'majority rules'. But on the other, if the voting public doesn't understand the subtleties of constitutionally limited government, all bets are off. No constitution can withstand a public that no longer respects or understands the values it embodies.

That said, our current public education system has done very little to ensure that voters understand these points. Arguably, it's made matter worse.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Saturday, December 8, 2007 10:39 AM

Quote:
Originally posted by Fletch2:
In practice you really have no choice and once you have a CC you play the game by their rules because they run a virtual cartel.

The regulatory apparatus makes this a very real cartel. Most people think that's ok, because they believe the we (the voters) control it. I think that's naive.

Quote:
...the idea of the democratic system is that the people make the laws

This is what you hear a lot these days, but it was never the intent. The intent was that we would democratically choose representatives, and they would make the laws. The assumption was that the average person wouldn't have the knowledge, or the time, to fully understand the implications of proposed legislation. Direct, citizen-rule, democracy would be a disaster.

__________________________________________________

Quote:
Originally posted by Righteous:
We both agree that freedom is the priority here...

That's easy enough to say and I'm sure everyone would agree with the statement. The problem is, we have very different understandings of what 'freedom' means. Freedom, at least in terms of political 'rights', means the right to not be interfered with. It means that, as long as you aren't stepping on someone else's freedom, you can do whatever you want without interference.

It doesn't, in my opinion, mean that I have the "freedom" to force other people to do what I want them to do. If I don't like the way someone does business, I have the freedom to not do business with them. I don't have the "freedom" to force them to play the way I want them to. I don't like the way credit card companies do business, for example, so I avoid them.

The thing is, I'm about as eager to limit corporate influence in our lives as the rest of you, but I see the government as the foundation of this influence, not it's cure.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Saturday, December 8, 2007 11:18 AM

FLETCH2

What you havent explained is how you would plan to enforce any agreement you would enter into? Do you plan to do it with a gun or violence? Rule of law is essentially the enforcement of agreements between people. In theory at least every agreement you have ever signed, every transaction you have ever made is backed by government force. You might not like to think of it in those terms but in practice that is what the law is.

So what replaces it? In general I don't like the idea of governments meddling in your business either, but if you are a con-man, or a sexual or financial predator then yes I would want you meddled with.

Until you can adequately explain what replaces the rule of law I don't see that you're doing much more than daydreaming.

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Saturday, December 8, 2007 12:09 PM

Uh... are you talking to me, Fletch?

I'm not suggesting doing away with rule of law, and defaulting on a contract is the same as stealing. As I've said in regard to the current fiasco, if it can be shown that there was fraud involved, if the financial firms were lying or stealing from their customers, then they should be prosecuted and/or sued by their victims. If it's just a case of people getting in over their heads, or kidding themselves about what an adjustable rate mortgage really means, we're doing wrong by bailing them out. It's a slap in the face to the folks who had better sense.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Sunday, December 9, 2007 10:03 AM

Fletch,
Thx for the reply. I think we are mostly on the same page; other than I might encourage folks a bit more strongly than you seem to be to toss cards when the terms 'go bad.' This is the only way we are going to keep the CC companies from truly 'going over the top' is if we make it clear when they get too abusive, we dump 'em.

I will point out I never said I dumped all my cards. I always make a point of having something on hand, and I make sure I understand the terms and conditions, and I strongly encourage others to do the same.

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Sunday, December 9, 2007 5:05 PM