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kjrice
11-25-2008, 11:31 AM
I see billions+ (soon to be trillions) being spent of taxpayer money to help Big Finance, but I cannot help to think that there is a better course. Why not paydown residential mortgages $100k and allow them to refi at reduced rate of, lets say, 4%. That would reduce the cost of living for many by around $1000-$1200 per month. Also, that money goes directly back into the finance markets. In the long run, Big Finance doesn't make the most money possible, but the economy, as a whole, should stabilize. Think of it as watering a tree from the roots instead of soaking down.

Ironically, the lemmings aren't seeing that the Democratic Party that termed "trickle down economics" as bad voodoo are the same promoting it.

Marvin S
11-25-2008, 11:43 AM
I see billions+ (soon to be trillions) being spent of taxpayer money to help Big Finance, but I cannot help to think that there is a better course. Why not paydown residential mortgages $100k and allow them to refi at reduced rate of, lets say, 4%. That would reduce the cost of living for many by around $1000-$1200 per month. Also, that money goes directly back into the finance markets. In the long run, Big Finance doesn't make the most money possible, but the economy, as a whole, should stabilize. Think of it as watering a tree from the roots instead of soaking down.

Ironically, the lemmings aren't seeing that the Democratic Party that termed "trickle down economics" as bad voodoo are the same promoting it.

That's a really bad thought - rewarding those whose spending habits got out of control.

This whole thing is a mess - A POTUS that spends like a D, a Treasury Secretary that is a D, A head of the Fed whose ?????, A D controlled Congress that vastly profited from the uncapped spending habits - soon to be more D's, that want this out of the way in an R Administration so they can avoid the blame.

There is nothing like a setback or two in life to make people aware of their surroundings. People learn very well from bad experiences.

Hoosier
11-25-2008, 11:46 AM
How about allowing people to use pretax dollars to pay down personal debt. The banks would get their money, and people would get out from under some debt. Also people who don't pay taxes would get their fair share. The effects would be slower, but longer lasting.

kjrice
11-25-2008, 12:00 PM
Marvin the people really getting screwed are those that have excellent credit, work hard, and pay bills on time. Now, the immediate reward goes to those that have been scamming Americans for a decade or more and executive greed. The quicker people can break even on a home the quicker they can sell and start the cycle again. As it stands, it is better for most that are upside down to just walk away. Save the $2-3k per month mortgage and try again in 7 or so years. Meanwhile, you rent a distressed home for $1k per year and pocket the remaining $1-2k per month. Now times that by 7 years and that is a hefty downpayment.

My guess is it would take more like $10trillion for a true bailout. Now we are just dragging out.

At first thought, I like the pre-tax debt payment. A tiered approach is good.

Julie R.
11-25-2008, 12:08 PM
I see billions+ (soon to be trillions) being spent of taxpayer money to help Big Finance, but I cannot help to think that there is a better course. Why not paydown residential mortgages $100k and allow them to refi at reduced rate of, lets say, 4%. That would reduce the cost of living for many by around $1000-$1200 per month. Also, that money goes directly back into the finance markets. In the long run, Big Finance doesn't make the most money possible, but the economy, as a whole, should stabilize. Think of it as watering a tree from the roots instead of soaking down.

Ironically, the lemmings aren't seeing that the Democratic Party that termed "trickle down economics" as bad voodoo are the same promoting it.

Actually, legislation that was supposed to do just that was passed last summer. Banks are supposed to have a fiduciary duty, now a law, to protect their customers (secondary mortgage market and investors) if a mortgage holder got in trouble, but could still pay some of the mortgage. Many banks in fact set up loss mitigation depts. to deal with these kinds of customers by making what's called loan adjustments.

kjrice
11-25-2008, 12:17 PM
Actually, legislation that was supposed to do just that was passed last summer. Banks are supposed to have a fiduciary duty, now a law, to protect their customers (secondary mortgage market and investors) if a mortgage holder got in trouble, but could still pay some of the mortgage. Many banks in fact set up loss mitigation depts. to deal with these kinds of customers by making what's called loan adjustments.
Sure but they could still be upside down tens of thousands. Then have been getting credit dings and with no light in sight, how many just say "screw it" and walk away. Then everyone loses. With (an arbitrary number) $100k directly pays down a mortgage and still ends up in Big Finances hands. There is no "one best" way to get out of this mess. One way or another someone is getting paid that put us in this mess. Sure some knew better when signing these scam loans, but the majority didn't. Heck it was fueled by the Clinton administration, so it must be a good loan right?

It is easy for folks like Marvin that seemingly have the perfect retirement to take a hardline. Most of me believes in a hardline approach too, as I built just before the explosion, but I do not know if that is truly the best approach to limit the fallout. Instead we are well on the road to a nationalized banking system. Government has really grown and the principals of the Constitution are being trampled.

Mistyriver
11-25-2008, 01:29 PM
I think a better solution is to renegotiate these loans that folks are paying high percentage rates to a lower fixed rate such as 5 or 6 percent or lower so then you will see more money in there pocket plus it is better for the banks instead of foreclosure and the homeowners would also save 1000 of dollars on interest in the long run. I don’t think rewarding folks by paying 100k off their mortgage who bought more house than they could afford or took 100% or more equity out of their home to spend on other things is not the answer. They should still be responsible for paying their own debt.

Marvin S
11-25-2008, 02:10 PM
It is easy for folks like Marvin that seemingly have the perfect retirement to take a hardline.

Our retirement is fine only because we don't have great expectations, mostly we don't expect someone else to lower their standard of living to raise our's.

A small retirement (with no cola) from the company I worked for, SS for both myself & my wife, Government plans you have to join in order to protect your self & whatever my wife & I saved over the years & I invested, hopefully wisely. We bought & paid for what we could afford at the time. My wife is a real shopper & can spot a bargain. She hauls me along when we are buying the unusual as I can break things down in my head as to whether they are a true bargain.

No fancy vacations, no 40 foot MH - just a bottom of the line travel trailer pulled by a Duramax (a luxury). We do go out to lunch regularly, but beyond that life is good by our standards but most would consider it rather quiet.

How many of you believe it your duty to pay for your children's college education? We did not, & our children, 3 of 4 did it on their own. They are much more confident as adults, understand the value of a dollar & were ready to work when they graduated. That's why the hard line, we did it, it was not easy, why can't others?

kjrice
11-25-2008, 03:53 PM
Others can do it, but that isn't necessarily about fixing this crisis now, since the gubment is already handing out taxpayer money to the elite corps. Also, the $100k isn't juts for "bad" loans. It goes to every homeowner. It is probably not the best idea, but I am fed up with this whole mess. And watch our money go to the Big 3 to reward them for poor business operations.

Hoosier
11-25-2008, 04:07 PM
I see billions+ (soon to be trillions) being spent of taxpayer money to help Big Finance, but I cannot help to think that there is a better course. Why not paydown residential mortgages $100k and allow them to refi at reduced rate of, lets say, 4%. That would reduce the cost of living for many by around $1000-$1200 per month. Also, that money goes directly back into the finance markets. In the long run, Big Finance doesn't make the most money possible, but the economy, as a whole, should stabilize. Think of it as watering a tree from the roots instead of soaking down.

Ironically, the lemmings aren't seeing that the Democratic Party that termed "trickle down economics" as bad voodoo are the same promoting it.

I agree with Marvin this is a really bad idea. That would cost be huge sum. 100K per homeowner. How many homeowners are there in the US. How would you pay for it. The government is taking some ownership in the cooperations they are bailing out. Would they own a share of your home. I don't agree with the bailout, but that would be so much worse.

gsc
11-25-2008, 05:57 PM
I agree with Marvin this is a really bad idea. That would cost be huge sum. 100K per homeowner. How many homeowners are there in the US. How would you pay for it. The government is taking some ownership in the cooperations they are bailing out. Would they own a share of your home. I don't agree with the bailout, but that would be so much worse.

If there were 300 million in the country and 200 million were adults, assuming they owned 75 million homes, that would be 10 trillion if I did the math right.:o

M Remington
11-25-2008, 09:39 PM
I read today that when this is over, the entire bailout will have cost $8 trillion.

K G
11-26-2008, 08:01 AM
I read today that when this is over, the entire bailout will have cost $8 trillion.

Well, then it must be true.....:rolleyes:

By they way, did your source say when "this" will be over so that we can make future plans?

Wanting to be prepared regards,

kg

Marvin S
11-26-2008, 08:25 AM
Well, then it must be true.....:rolleyes:

By they way, did your source say when "this" will be over so that we can make future plans?

Wanting to be prepared regards,

kg

:) - Keith, we know Mark & his fellow travelers have few original thoughts so we can breathlessly await his source.

While we are waiting, there is a good synopsis on Larry Summers on the dailybeast.com. A guy with his politically incorrect views has got to have talent to survive in the party of the lefties. At least that appears to be one good BO appointment.

I did read an article in "American Spectator" last night that said when all this pump priming that's being done takes hold it's going to be like throwing gasoline on a fire. As they say things are not as bad as everyone makes them sound, the major issue is fear by the Nervous Nellies.

Illinois Bob
11-26-2008, 09:11 AM
Why not paydown residential mortgages $100k and allow them to refi at reduced rate of, lets say, 4%.

I can't see where that would be fair to those that don't have a house yet or those who have paid thiers off already.I think it's better that those who over extended themselves to sell out and start over at thier own expense.

Hoosier
11-26-2008, 10:25 AM
I can't see where that would be fair to those that don't have a house yet or those who have paid thiers off already.I think it's better that those who over extended themselves to sell out and start over at thier own expense.

Bingo!!!!!

M Remington
11-26-2008, 10:34 AM
I know it's not Fox or Rush Limbaugh, but here it is. . .

http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2008/11/26/MNVN14C8QR.DTL&o=0

Thank goodness Obama seems to realize there is a problem. . .

George, where are you???????????

Hoosier
11-26-2008, 10:37 AM
I know it's not Fox or Rush Limbaugh, but here it is. . .

http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2008/11/26/MNVN14C8QR.DTL&o=0

Forgive me, I don't know how to post a link.

I don't think that accounts for any return on investment.

M Remington
11-26-2008, 10:38 AM
Can we count on ROI?

mjh345
11-26-2008, 10:43 AM
I can't see where that would be fair to those that don't have a house yet or those who have paid thiers off already.I think it's better that those who over extended themselves to sell out and start over at thier own expense.

BINGO!! However, I feel the same principal should be applied to the fat cats on Wall Street & the banking industry etc.

Rewarding incompetence and greed is anethema to the free enterprise system.

Remember the free enterprise system?

Hoosier
11-26-2008, 11:41 AM
Can we count on ROI?

If you believe what HBO said in his speeches before the election when he was supporting the bailout

Patrick Johndrow
11-26-2008, 09:39 PM
The bailouts are the biggest crimes perpetrated against the American taxpayer since the ethanol scam.

Terry Britton
11-26-2008, 10:18 PM
The bailouts are the biggest crimes perpetrated against the American taxpayer since the ethanol scam.

Not all ethanol is a scam. The corn ethanol that costs $2.40 to produce, and requires $0.51 tax credits to even be viable to sell at $2.70 may be.

The next gen gasification ethanol produced from crop residue at $1 per gallon (also utilizing next gen filtration over distilation), or from other biowaste at $0.20 per gallon is not a scam. The technology is just now coming on line, but requirs a little higher oil prices before many plants will be built. Even then there is a transporation problem since special pipelines would need to be built. I haven't checked into railroad tranportation, but if the plants aren't within a decent distance to a market, the trucking costs can easly jump to $1 per gallon.

Honostly though, I don't know how standard fermenation ethanol plants survive. The business case doesn't support them without grants installing them, and the owners selling out as soon as possible???? They may have had some profit when gas was at $4, but losing big $$$ now.

----------
Sorry for derailing this thread.

Patrick Johndrow
11-27-2008, 10:35 AM
The next gen gasification ethanol produced from crop residue at $1 per gallon (also utilizing next gen filtration over distilation), or from other biowaste at $0.20 per gallon is not a scam. The technology is just now coming on line, but requirs a little higher oil prices before many plants will be built. Even then there is a transporation problem since special pipelines would need to be built. I haven't checked into railroad tranportation, but if the plants aren't within a decent distance to a market, the trucking costs can easly jump to $1 per gallon.


Believe it when I see it Terry

kjrice
11-30-2008, 07:03 PM
The bailouts are the biggest crimes perpetrated against the American taxpayer since the ethanol scam.
That is my thought as well. Give the money to the people before Big Corp.

subroc
12-01-2008, 07:14 AM
It was inevitable, President George W. Bush is at fault.

http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/meltdown_ignored_warnings

badbullgator
12-08-2008, 08:01 AM
Not all ethanol is a scam. The corn ethanol that costs $2.40 to produce, and requires $0.51 tax credits to even be viable to sell at $2.70 may be.

The next gen gasification ethanol produced from crop residue at $1 per gallon (also utilizing next gen filtration over distilation), or from other biowaste at $0.20 per gallon is not a scam. The technology is just now coming on line, but requirs a little higher oil prices before many plants will be built. Even then there is a transporation problem since special pipelines would need to be built. I haven't checked into railroad tranportation, but if the plants aren't within a decent distance to a market, the trucking costs can easly jump to $1 per gallon.

Honostly though, I don't know how standard fermenation ethanol plants survive. The business case doesn't support them without grants installing them, and the owners selling out as soon as possible???? They may have had some profit when gas was at $4, but losing big $$$ now.

----------
Sorry for derailing this thread.

One thing you do not address is the effect ethanol has on engines. E10, or whatever they call it, is causing MAJOR problems to marine engines and has cost several people I personally know about $1000 each in repairs (not just talking water separators here). Talk to the lawn care guys and see how much of a problem they are having running 10% ethanol through mowers, weed eaters, chainsaws, blowers…. Got an ATV? Smaller engines are already starting to show the effects of ethanol and it will not be long before people start to notice the negative effect it certainly has on larger engines.
Ethanol is a prime example of leaping before you look. In an effort to get off oil (or whatever reason you like to chose) ethanol was pushed in a big way including building refineries for ethanol rather than new oil refineries…. My prediction is that ethanol is a distant memory of a failed experiment in 5-10 years and if it were not for BIG CORN being involved it would not take that long.
BTW- at a gas station yesterday some dork pulled up at the pump next to me in a tiny, tiny little car that I couldn't fit into if I folded my legs in half and stcuk my head up my butt. I couldn't help but laugh as I topped off my BIG truck for $40 as they changed the sign to reflect yet another drop in gas prices

badbullgator
12-08-2008, 08:11 AM
Somebody was asking about this a while back. This is the heart of the matter at the big three. Wages and failure to compete have driven them to the point they are at and it will continue to do so until they are gone. I don’t see it as that big a deal because someone will profit from their demise whit a business model more like Toyota or Honda. You can build cars and make money it is proven. What you cannot do is pay people 5-10 times what they are worth to do a job and you cannot let a union beat you into submission
Here are some taken from Forbes:
Labor cost per hour, wages and benefits for hourly workers.
• Ford: $70.51 ($141,020 per year)
• GM: $73.26 ($146,520 per year)
• Chrysler: $75.86 ($151,720 per year)
• Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)
According to American Association of University Professors and Institute of Education Sciences, the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 plus 27 percent benefits).
Bottom Line: The average United Auto Workers (UAW) worker with a high school degree earns 57.6 percent more than the average university professor with a Ph.D., and 52.6 percent more than the average worker at Toyota, Honda or Nissan.
These guys are making more than teachers, physical therapist, nuclear technicians, some attorneys, nurses, engineers, pilots…embryologist, all people with college education and highly skilled. I am not knocking trades people, but the point I am trying to make is that most of the professions listed could easily learn to do a job on the assembly line but the same is not true of taking someone off the assembly line and making them a professional (of course some could, but not everybody or even the majority of them). You have to pay for work based on a “level of difficulty” if you will
Then there's the "Job Bank".
When one of the Big Three lays off an employee, that employee continues to receive all benefits - medical, retirement, etc., plus an hourly wage of $31 per hour. If this does not burn you butt I don’t know what will. Any body ever been on unemployment? Did you get $31/hr while on it and benefits? Retirement?
Now the Big Three wants Joe Taxpayer to pick up this tab in a $34 billion bailout package - soon to be increased to $45 billion if Nancy and Hillary have their way.
The Big Three want this money - not to build better autos - but to pay the tab for medical and retirement benefits for retired autoworkers.
Not a good deal for us taxpayers.

mjh345
12-08-2008, 09:40 AM
Well done Corey, two spot on posts.
It really pisses me off every time I gas up, and realize I am putting 10%Ethanol fuel in my vehicle that cuts my mileage down 20%; and is harmful to my engine. All because my benevolent govt. idiots, who are whores to the corn lobbyists; have mandated away my freedom to buy the gasoline that my vehicle was designed to run on.

I guarantee you that the Big 3 will be back at the govt trough for another handout in short order after this initial bailout is approved.

The "FREE" enterprise system is designed to take care of these problems in the "FREE" market place.

Remember the free enterprise system, and Capitalism? We used to have an economic system somewhat based on it.

As a matter of fact.l I remember our celebration after we proved to the Russians that Capitalism trumps Socialism. Since that time, we have slowly moved away from Capitalist, free market policies.

Lately Bush and his minions have absolutely abandoned free market Capitalism, and rushed headlong towards Socialism.

DISGUSTING!!!!

badbullgator
12-08-2008, 12:03 PM
I was just watching the news at lunch and saw 1) Sen Dodd calling for a Auto czar and 2) the president of the UAW pounding his fist saying that the union has already made concessions and that he “will not allow the American worker to be the scapegoat in this bailout”.
That poor old American worker making $70+/hr in wages and benefits, he is looking out for them, but more over I am sure he is looking out for himself and the UAW. I see the UAW as pretty much the same as the mafia. Do what they say or else they will resort to intimidation and thuggery to get what they want.
Of course I was soooo happy to hear Senator Dodd suggest nationalizing the auto industry so there can be a bit more corruption. The auto industry can’t run itself, how is some fool in the gooberment going to help?

Julie R.
12-08-2008, 12:15 PM
Here's a little more info. on the "jobs bank", the model of union efficiency that our tax dollars will be helping fund at the big 3, this 'auto' make you feel real good about the bailout. Oh and it's from the WSJ back in May 2006:

MAY 2006 :: COVER STORY: AUTOS
Money for Nothing
U.S. Car Companies Pay Hundreds of Millions of Dollars in Wages to Idled Workers
By Jeffrey McCracken
Staff Reporter of The Wall Street Journal
In his 34 years working for General Motors, one of Jerry Mellon's toughest assignments came this January.
He spent a week in the "rubber room."
The room is a windowless old storage shed in Flint, Mich. It is filled with long tables, Mr. Mellon says, and has space for about 400 employees. They must arrive at 6 a.m. each day and stay until 2:30 p.m., with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.
Their job: to do nothing.
This is the Jobs Bank, a two-decade-old program in which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many volunteer or go back to school. The rest clock time in the rubber room or something like it.
It is called the rubber room, Mr. Mellon says, because "a few days in there makes you go crazy."
The Jobs Bank at GM and other U.S. auto companies including Ford Motor is likely to cost around $1.4 billion to $2 billion this year. The programs, which are up for renewal next year when union contracts expire, have become a symbol of why Detroit struggles even as Japanese auto makers with big U.S. operations prosper.
'Designed for a Different Time'
While GM often blames "legacy costs" such as retiree health care and pensions for its troubles, its Jobs Bank shows that the company has inflicted some wounds on itself. Documents show that GM itself helped originate the Jobs Bank idea in 1984 and agreed to expand it in 1990, seeing it as a stopgap until times got better and workers could go back to the factories. The idea was to help train or find jobs for senior UAW employees who would "otherwise be permanently laid off" because of better technology or higher productivity. Ford later matched the plan for its UAW employees.
"The bank was designed for a different time, a time when we were growing," says Pete Pestillo, a former Ford executive who oversaw union talks. The Jobs Bank has failed to stop the outflow of jobs at Detroit's unionized auto makers. Since 1990, GM's union payroll, including former subsidiary Delphi, has fallen to about 137,000 from 358,000. Many have retired, died or found other jobs. The rest are in the Jobs Bank.
Mr. Mellon, 55, joined GM in 1972, following his grandfather and his father. Through the 1980s and 1990s, Mr. Mellon held jobs designing electronic systems for vehicle prototypes. In 2000, GM merged two engineering divisions, and he wasn't needed anymore.
Since then, except for a period in 2001 when he worked on a military-truck project, GM has paid him his full salary for not working. That is currently $31 an hour, or about $64,500 a year, plus health care and other benefits.
About 7,500 GM workers are now in the Jobs Bank, more than double the figure a year ago. Each person costs GM around $100,000 to $130,000 in wages and benefits, according to internal union and company figures, meaning GM's total cost this year is likely to be around $750 million to $900 million.
One way employees in the Jobs Bank can fulfill their requirements is to attend eight- or 12-week classes offered by GM. In these classes, Mr. Mellon has studied crossword puzzles, watched Civil War movies and learned about "manmade marvels like the Brooklyn Bridge," he says. One class taught him how to play Trivial Pursuit. More recently, he attended an institute in Flint called the Royal Flush Academy. It is designed for those seeking work in casinos. Mr. Mellon says he isn't interested in casino work and left the academy after they docked his pay because he was 10 minutes late coming back from lunch.
With that he arrived at the rubber room. Every day for a week Mr. Mellon got up at about 4:30 a.m. to make the 45-minute commute to the rubber room from his home in Otisville, Mich. At first he read the newspaper or magazines lying around, such as Reader's Digest. He talked some with acquaintances. After conversation dried up, he says he spent hours staring at the wall, hoping time would move faster.
The waiting "makes you want to bang your head against the wall," Mr. Mellon says. "I couldn't take it. I need to be doing something. And there is a supervisor who walks around staring at everyone. It's worse than high-school detention."
Mr. Mellon thinks a "line-worker mentality" keeps people going back to the rubber room. "A lot of guys sit in that room and just collect their paycheck because they don't know what else to do," he says. "They've spent 20 years tightening a nut as it came down the line. They are faced with this harsh reality, and they are just happy the paycheck still comes so they can put their kid through college."
Mr. Mellon soon found a way to escape the room, through volunteering. He recently arranged to do community service work at Freedom Temple, a Baptist church in Flint. He is installing motion sensors at the homes of senior citizens in a bad part of town.
Corrosive Influence
Mr. Pestillo, the former Ford executive, and others see the Jobs Bank as a corrosive influence with significant indirect costs because it encourages auto makers to build more vehicles than consumers want. Companies figure it is better to build cars with little or no profit margin than to pay people not to work, he says. They also may keep rote work in-house even though it would be cheaper to outsource.
The system gives older union workers little incentive to move to other plants, find jobs at other companies or retire. There is no limit on how long a worker can stay in the Jobs Bank. They don't have to look for work at their company. Contracts allow workers to turn down any job offer at a site farther than 50 miles from their home plant.
Detroit's Big Three auto makers are likely to seek reductions in the program when they renegotiate their contracts with the UAW next year. It may be difficult for the UAW to keep the Jobs Bank intact, not only because of the public-relations problem but also because it is hindering a settlement to get Delphi out of bankruptcy-court protection.
In Flint, Mr. Mellon also sees change on the horizon. "I understand the Jobs Bank needs to have an end to it," he says. "I mean, they've paid me like $400,000 over six years to do nothing, to learn to deal blackjack. But buy me out. Retire me with something like $2,000 for every year I worked. I need that because you know they're going to keep cutting our health care and pensions. You are so vulnerable in retirement."

badbullgator
12-08-2008, 12:34 PM
This stuff pisses me off so bad that I will stop buying cars and trucks form the big three if the government goes through wiht the bailout. I can't remember the number of trucks and cars I have bought over the last 28 years, but it is over 20 and all, except an Acura I bought my daughter, have been either GM or Ford. I know my buying elsewhere will not break them, but I bet a lot of others are going to feel the same way