Homes Way Over Valued

[Bobcat]

Not trying to rub it in , or gloat , but all this justifies my decision to double/triple up on my house payments years ago . Kinda nice to own it free and clear . Now all I have to spend my money on is the Cobra !!

[lust4fia]

Originally Posted by Bobcat

Not trying to rub it in , or gloat , but all this justifies my decision to double/triple up on my house payments years ago . Kinda nice to own it free and clear . Now all I have to spend my money on is the Cobra !!

Amen on paying that baby off! However, I have five kids to spend it on. Still trying to fit a Cobra into the picture though.

[Bobcat]

lust4fia ... Understand about kids as I raised two and put them through college. Hang in there and you`ll get where you want to be . I `ve wanted a Cobra ever since I was a young engineer flying into LAX back in the mid sixties and saw Shelby`s plant as I drove out .... and just now got one .
FYI ... you`re in Roanoke , IL ?? ... I grew up in Roanoke , VA .

[392cobra]

Subject: Commentary: Klepto-capitalism

Date: Thursday, March 6, 2008





Commentary: Klepto-capitalism

By ARNAUD DE BORCHGRAVE, UPI Editor at Large

WASHINGTON, March 6 (UPI) -- The bursting of the housing bubble, which punctured the credit bubble, was a criminal enterprise at the outset, pooh-poohed at first by those who should have known better, that has now triggered a global economic crisis. The U.S. prison population is at an all-time high with 2.3 million behind bars, but the subprime con men/women are enjoying the fruits of their scams.

Global estimates of laundered funds sheltered by individuals in offshore tax havens vary between $7 trillion and $12 trillion. Yet only three postage-stamp size countries -- Andorra, Monaco and Liechtenstein -- are still blacklisted as tax-dodging havens.

The subprime mortgage meltdown caused banks on both sides of the Atlantic to write down some $400 billion (UBS puts the final banking-sector loss closer to $600 billion, which means scaling back lending by $2 trillion), and sent the dollar to an all-time low against the euro. It also put 2 million U.S. homeowners at risk of losing their homes, countless millions of others of losing 30 percent of the value of their real estate in 2008, pushed oil over $100 a barrel, and gold to nearly $1,000 an ounce.

Harvard's Lawrence Summers, a former U.S. treasury secretary (1998-2001), said subprime spawned the most serious crisis in housing since the Depression. Near worthless mortgage-backed securities were repackaged by greedy predatory operators to look like soul food for the brainless.

Collateral economic damage is huge -- and keeps growing. Diminished borrowing capacity based on a home's value affects consumer spending and cuts in to the local tax base. But so far no CEO dismissals or cuts in executive compensation, even in banks that misjudged and lost billions.

The Union Bank of Switzerland, the world's largest wealth manager, lost $19 billion (total exposure to subprime was closer to $30 billion). Singapore's "Sovereign Wealth Fund" quickly pumped in $11.5 billion, earning the sobriquet of Union Bank of Singapore. The city-state assessed UBS as a good investment based on long-term growth estimates. UBS' chairman and chief executive officer, dour-faced Marcel Ospel, ignored calls from 6,700 shareholders to resign, growled at his board -- and kept his $25 million-a-year job. Citigroup is nursing its subprime wounds by preparing to lay off 25,000 employees.

Financial Times European Editor John Thornhill, assessing why top earners in the risk business feel no pain, says, "What rankles are the undeserving wealthy who take risks with other people's money but never suffer the consequences."

Wounded and distressed, leading investment bankers moved, belatedly, to propose new guidelines on pay and bonuses to the "Institute of International Finance," a global association of banks that met in Rio de Janeiro, Brazil, this week. The initiative was also designed to encourage a fresh look at $20 million to $50 million annual compensation packages for CEOs and to discourage banks from huge cash bonuses to traders who take foolish bets to win a jackpot.

Wall Street CEOs quickly let it be known they would not agree to suspend multimillion-dollar compensation packages until subprime losses had been recovered "because it would take away Wall Street's competitive edge."

Federal criminal prosecutors are investigating whether securities firms booked inflated prices of mortgages despite knowledge of their true valuations. Rating firms are also being investigated for assigning ratings that were too high for instruments backed by subprime mortgages. Collateralized Debt Obligations were loaded with overvalued subprime -- and passed on with the Triple-A seal of sound risk.

Goldman Sachs and Deutsche Bank led a roster of banks that didn't take a bite out of the subprime apple -- but global market turbulence still hit them. Fast-talking mortgage sharks assured millions not to worry about the fine print because the value of their purchase would be up 30 percent the first year. They even advanced the money for a down payment as small as 5 percent, or even no money down.

The administration's $168 billion stimulus program doesn't kick in until the checks go out in May. Tax rebates of up to $500 for individuals and $1,200 for couples filing jointly -- or $300 for individuals who pay less than that in income taxes. All this does little to ease distressed homeowners -- but it adds to the federal deficit.

Fed Chairman Ben Bernanke told this reporter in early September the worst of the subprime crisis was now behind us. But it was just the beginning of a global financial tsunami. His predecessor at the Fed, Alan Greenspan, conceded he had seen "subprime" ripples coming but didn't think it was any big deal. In early March Bernanke moved to pre-empt Congress. He appealed to banks to forgive large chunks of mortgage loans to borrowers who can't afford to pay and/or those who owe more on their mortgages than their houses are worth.

Unless we learn from this crisis, says the English-speaking world's most-read financial and economic columnist Martin Wolf, "another will put the world economy back on to the rocks in the not too distant future." World food programs for the hungry in Darfur and other areas of malnourishment have already been hit by the hype for crop-based fuel, such as ethanol. Spurred by skyrocketing oil prices, farmers have begun switching from food to fuel, thus causing global shortages. And no one feels this more acutely than the Rome-based World Food Program that expects to feed 73 million people this year. But wheat prices soared 80 percent in the past year.

With 6 percent of the world's population, America's prosperity in recent years has been its ability to borrow $2 billion to $3 billion a day from the rest of the world in return for Treasury paper to maintain the world's highest standard of living, which, in turn, is based on conspicuous consumption at a time of growing world shortages. Clearly, a new paradigm is needed -- but it's not in the cards. We are simply told to go out and spend more. But what happens if most of us decide to send our tax rebate checks to the bank or pay down credit card debt instead of buying, say, cheap toys made in China for the kids? Or a new keyboard made in Taiwan for the PC? The law of unintended consequences beckons. Several major kicks are on the way. It is, after all, the worst financial crunch since the Great Depression. And talk about "change" won't hack it.

Some 10 million American homeowners will have no equity left in their houses by year's end, according to Merrill Lynch estimates. That can only enhance the Democrats' fortunes in November. New Deal for the 21st century? The stakes are high.

[lust4fia]

Originally Posted by Bobcat

lust4fia ... Understand about kids as I raised two and put them through college. Hang in there and you`ll get where you want to be . I `ve wanted a Cobra ever since I was a young engineer flying into LAX back in the mid sixties and saw Shelby`s plant as I drove out .... and just now got one .
FYI ... you`re in Roanoke , IL ?? ... I grew up in Roanoke , VA .

Thanks Bobcat. The Cobra thing is getting closer form me. I guess I'm sitting pretty good financially right now. My only dept is a small loan on our van ($2800 or so) that will be gone by summer. I'm an engineer at Caterpillar, so my income is decent and pretty secure right now. Still, five kids eat a LOT. Then there is retirement and college saving to deal with, but I'll get there.

Roanoke, Illinois is named after Roanoke, Va. Some of the early settlers in the town were from that area and reused the name. It's a very small town (pop. 1800), our claim to fame is being the home of the biggest Viper dealer in the country.

Thanks again.

[Wes Tausend]

Originally Posted by 392cobra

Subject: Commentary: Klepto-capitalism

Date: Thursday, March 6, 2008
Commentary: Klepto-capitalism
By ARNAUD DE BORCHGRAVE, UPI Editor at Large

WASHINGTON, March 6 (UPI) -- The bursting of the housing bubble, which punctured the credit bubble, was a criminal enterprise at the outset...

...most serious crisis in housing since the Depression....

...But so far no CEO dismissals or cuts in executive compensation, even in banks that misjudged and lost billions...

...kept his $25 million-a-year job. Citigroup is nursing its subprime wounds by preparing to lay off 25,000 employees...

Financial Times European Editor John Thornhill, assessing why top earners in the risk business feel no pain, says, "What rankles are the undeserving wealthy who take risks with other people's money but never suffer the consequences."

...With 6 percent of the world's population, America's prosperity in recent years has been its ability to borrow $2 billion to $3 billion a day from the rest of the world... ...It is, after all, the worst financial crunch since the Great Depression. And talk about "change" won't hack it.

...That can only enhance the Democrats' fortunes in November. New Deal for the 21st century? The stakes are high.

Fred,

Pretty quiet response you've gotten so far, on a pretty disquieting revelation. Almost like the horror is too great to discuss. Well, "talk about 'change' won't hack it" anyway.

The above even implies that this may "enhance the Democrats' fortunes in November". Sounds like "Obama Talk" to me. But Obama is as much of a amateur business manager as GW was ...and how's that working out for us?

[Rant On]
All politics seem to be founded over who-gets-how-much of the pie. That would make sense since wealth is the basis of that which is governed, hence government. A government of rights? The right to "Life, liberty, and the pursuit of happiness" of which money supposedly can't buy ...but truly won't exist without it. The truth of this buying principle is in our DNA.

Wars are fought, almost exclusively, over percieved inequities on pie squabbles, distribution of wealth. Wars might be said to be often caused by religion. But even then, close inspection reveals the insidious my-piece-is-smaller-than-yours culprit, where one religion enjoys a higher living standard, wealth divided along reverential lines.

Distribution of wealth and war:
The American Revolutionary War: You expect me to pay taxes for what...
The US Civil War: Don't take (free) my cheap help away...
Provisional Irish Republican Army: Hey, all the protestants got the good jobs here...
Nazi Germany: We are so poor and these terrible Jews have all the money...
Everywhere except the ME: Those uncivilized greedy sand people have all the expensive oil...

It is said that the root of all evil is money. But in simpler terms, I believe it is, and always has been, the distribution of money, the unbalanced distribution of wealth, that inspires all human suffering other than natural disease. We have no known predators other than other humans ...and microbes.

That said, my greatest concern for America was a gradual shift in the power of corporate law, not only in the US, but the world at large. All evolved to unprecedented hierarchy in the name of unimpeded free enterprise. Laws that now allow, even encourage, mortgage and other white collar rip-offs. The wealth is now radically shifting. And the working class ...that's us ...gets the bill. Time to legislate a back up move if it's still possible.

At this point, I trust my government more than I do corporate power. Please, please, more government by-the-people interference. At least I get to vote. As if that helps lately.

It sometimes seems that the next presidential election won't really matter. Our fate is predetermined in various corporate board rooms and the "Hear Ye, Hear Ye!" lobbyists are sent out to the peasantry in congress.

Who's in charge here anyway?
[Rant Off]


...

[Ronbo]

I've been seeing similarities to the '29 crash for some time, our financial institutions caused that one as well.

Hopefully it won't be that bad, especially since we've killed off most small farmers who kept a lot of people from starving to death in the '30s.

As well as many here, I grew up with adults who lived through that era. They had a very different view of what was important. Financing computers and stereos was unthinkable, a hot dog roast was a preferable way to spend the evening.

Idiots like Greenspan just kept applying the steam till the train jumped the tracks. I love his observation "I didn't think it would be this bad". Right, Alan that's why you never adjusted the rates to curb the tripling house and car prices over the last ten years...

BTW any one who wants to blame GW remember the fed reserve is not uder direct control of the government (all the banks in the reserve are private). The treasury dept just prints the bills, these bozos determine the true value of the dollar. As citizens we have no control over who is in there.

[J. T. Toad]

Didn't Bush appoint Bernanke?

http://www.washingtonpost.com/wp-dyn...102400670.html

[J. T. Toad]

I should add,

I don't disagree with you at all, I just keep being reminded that Bush had some hand in it.

The financial institution today parallels societies public opinion, or logical lack thereof, which is ruling government policy.

This is a scary situation, far more dangerous than the symptom of an over indebted payor.

[Wes Tausend]

Originally Posted by J. T. Toad

I should add,

I don't disagree with you at all, I just keep being reminded that Bush had some hand in it.

The financial institution today parallels societies public opinion, or logical lack thereof, which is ruling government policy.

This is a scary situation, far more dangerous than the symptom of an over indebted payor.

Bush Jr. and a string of guys before him didn't really fix any of this and Obama sure as H doesn't have any pro business experience though the Klepto-capitalism post implied (last paragraph) it was good for demo's. Heck, I don't think McCain is too well suited to financial wizardry either.

I'm thinking we need somebody leading us with the business acumen of Lee Iacocca and the integrity of Billy Graham.


...

[392cobra]

Originally Posted by Wes Tausend

Bush Jr. and a string of guys before him didn't really fix any of this and Obama sure as H doesn't have any pro business experience though the Klepto-capitalism post implied (last paragraph) it was good for demo's. Heck, I don't think McCain is too well suited to financial wizardry either.

I'm thinking we need somebody leading us with the business acumen of Lee Iacocca and the integrity of Billy Graham.
...

I'm sure not holding my breath until someone with the integrity of Billy Graham gets involved in politics.

[J. T. Toad]

I love the 'klepto-capitalism" description.

it is the LOVE of money as the root of all evil.

I am pretty sure I want someone who doesn't want the job, but has lived their life in a way which proves them worthy of the job. (please note I didn't even specify a gender, which was tougher to write than I thought, but I am desperate for any captain willing to change course)

I will always wonder what could have happened if Checchi would have beaten Davis.