Comments on: Behind The Consumer Credit Collapse

CBS Evening News: Some Risky Mortgage Tactics Mirrored By Typical Lenders

[brundage3]

Ah simplicity/ A wonderous tonic.

It was the libs in Congress, (bad guy) who MADE the bancks and loan based companies (innocent citizens) loan money. Then when President Bush and the Republicans (Good Guys) tried to stop this FORCED loan making those terrible awful, horrible and mean Bad Guys wouldn''t let them!

Presto! We are educated. The rich and their friends are good guys who try to take care of all of us. The non rich and their friends are the bad guys.

Sure.

[incog-nito]

(continued from previous post)

Well we all are witnessing the results of those misguided policies now. America no longer produces value-added goods, but imports them from abroad. The increasingly larger trade deficit means that wealth, along with jobs, is being continually drained out of the country. But how did we still manage to get by for so long? By continually borrowing and adding to the national debt.

The ONLY solution that works, that nobody dares mention, and that some immediately deride, is to PROTECT America''s industries. Other nations do it for theirs. It''s time for America to do the same, once again. It''s not just a matter of economics; it''s a matter of national security.

[incog-nito]

The U.S. economic downturn can be directly traced back to globalization and free-trade policies. Prior to that, America was a self-sufficient, self-sustaining nation that produces ALL of its goods and exports a lot of it. Americans'' wages were multiples of those of other countries. Tariffs were used to prevent the "dumping" of cheap foreign products designed to damage the domestic manufacturing sector.

With the advent of globalization, what used to be called "dumping" became legal, decimating the domestic manufacturers and forcing them to outsource and move plants to other countries in order to survive. The American worker is being asked to "compete" against those in other countries working for a few dollars a day, with little or no labor laws and regulations. Guess what? There was no competition.

Proponents of globalization promised that new industries would emerge to replace old ones, and that new "innovations" would keep the American worker competitive. Well, that didn''t happen. They neglected to explain what those new industries would be, and even if they existed, why corporations wouldn''t just go ahead and have them produced in other countries anyway, since labor is still so much cheaper.

(continued)

[rhs648]

What the article doesn''''t address is exactly how the mortgage securities dried up in the first place. It doesn''''t point back to the 1993 Credit Realignment Act that imposed heavy fines on creditors for not issueing mortgage loans to high risk, low income families. The ease of getting a home mortgage with an adjustable rate or interest only loan drove the housing cost out of control. When the feds raised the primes to try to get the economy under control, the variable rates were readjusted driving up the monthly payments and forcing people into forclosure. This in effect burst the housing bubble. In 2005, Bush tried to kill the CRA but he lost the battle with Congress.

Posted by diverinnl

Hi diverrini - Was the 1993 Credit Realignment Act something pushed by the Democrats, the Republicans, or both. Bush apparently wanted to put reigns on Fannie Mae and Freddy Mac several years ago but could not get support from Democrats such as Chris Dodd and Barney Franks. So far, these guys appear successful in sheltering themselves from criticism. Was Clinton president when this act became law and were the Democrats in a majority?

[rhs648]

The first round of an IPO is investment, everything after that is nimrods trading overvalued paper chits. Yeah, and I know that these IPOed companies may eventually buy their stock back, but I do not care. 80 percent plus off all businesses in America are mom and pop 10 or less employees, they are the ones that ultimately count.

Posted by curse914

Hi curse914 - America does have many small businesses and you may be right about them making up 80% of the businesses in America. One thing I''m not familiar with is what per centage of the goods and services are produced by small businesses vs large corporations. Are you familiar with this?

[diverinnl]

What the article doesn''t address is exactly how the mortgage securities dried up in the first place. It doesn''t point back to the 1993 Credit Realignment Act that imposed heavy fines on creditors for not issueing mortgage loans to high risk, low income families. The ease of getting a home mortgage with an adjustable rate or interest only loan drove the housing cost out of control. When the feds raised the primes to try to get the economy under control, the variable rates were readjusted driving up the monthly payments and forcing people into forclosure. This in effect burst the housing bubble. In 2005, Bush tried to kill the CRA but he lost the battle with Congress.

[edward1975-2009]

rhs648: Not if the government assumed the debt and offered the people terms they could afford. Let the banks go under and let the people who owe pay back the government. We, the taxpayers would then get a return on our money. Now we are just funding the people who caused this in the first place.

[rhs648]

They were willing to dive in for greed, now let them find their own way out. They weren''''t worried about sharing profits with the taxpayers when money was good, but they sure know us now when they need us to bail them out. We are under no obligation to save them.

Posted by Edward1975

You are correct. Now the taxpayers have to bail them out to save the economy. The injustice is helping the same people who created the problem. Unfortunately, consumers and workers are between a rock and a hard place. If the economy nosedives, it is our jobs and our investments that go down the tube. This reminds me of having to take awful tasyting medicine in order to get better when we are sick.

[rhs648]

Imagine if loans were only given to people who could pay them back. No that would be politically incorrect and make too much sense.

Posted by downsteamjim

At last a poster with common sense. It appears that banks, mortgage companies, automotive financing companies, and credit card companies did not care if they made loans to people with risky credit because they could bundle these loans into derivatives and sell them to investors. Like a pyramid sceme, the last people to receive these iffy loans packaged as derivatives are the losers. For those who look down on investors, you can smile. The only problem is that without investors, the economy comes to a halt. It is investors who provide capital to businesses. Now the government is doing it.

[edward1975-2009]

They were willing to dive in for greed, now let them find their own way out. They weren''t worried about sharing profits with the taxpayers when money was good, but they sure know us now when they need us to bail them out. We are under no obligation to save them.

[james4truth]

Sorry to crash your party but the US was taken off the gold standard long before 1972.

As for consumer credit, it was brought on by banks looking for larger profits. Taking bigger risks, and not thinking about where the road would lead. So we have hit the end of the line for free money to people who cannot pay it back. Oh Well.

If they can''t pay it back, they shouldn''t get the loan.

[yeswedid]

Folks, this is not just a recession/depression but the ''''breakdown-crisis'''' of the world-wide monetary system championed by the British Financial Empire

Posted by whitemale08 at 10:51 PM : Nov 18, 2008
------------------------------------------------------What it is is the breakdown-crisis of morals & honesty. Until we can all start being honest these perils in our society are going to keep coming up time & time again...

[whitemale08]

Now that our phony economy of debt and ''structured-finance'' garbage and krap derivative-swaps evaporate into plumes of smoke, we are left staring at the ''contraction'' of the ''real economy'' that has been taking place for the last 40 years ever since we took ourselves off the gold-standard back in 1971-72.

So our economy along with the stock market is shrinking and has to shrink to what it was 40 years ago when there were 100 million less people in this country.

The contraction of the ''virtual economy'' made up of garbage and krap full of worthless derivate-swaps, and ''structure-finance'' nonsense will be morre painfull beyond belief until we ''nationalize'' the private Federal Reserve System and re-organize it under Congressional bankruptcy proceedings headed by Ron Paul.

Folks, this is not just a recession/depression but the ''breakdown-crisis'' of the world-wide monetary system championed by the British Financial Empire.

And we cannot allow the British to continue touting messages of ''free-trade'' and ''globalization'' because that is what has killed the system and any attempt at trying to resurrect that system will eventually kill us all.

larouchepac.com

[yeswedid]

The only group I can think of that has been kept from marrying, as insignificant as the ****''''s are, they are the only group that can not marry in this country, and who cares about them.

Posted by PCreversed at 09:49 PM : Nov 18, 2008
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As insignificant as the "homos" are? Do you know gaays are everywhere in the country? You are among homosexuals everyday in your life you frickin'' idiot.

[downsteamjim]

Imagine if loans were only given to people who could pay them back. No that would be politically incorrect and make too much sense.

[pcreversed]

Can''''t wait to see the new GM Volt!! Saving my money for one now.


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Posted by rightbehind

I hope you were kidding, not that it matters though. By the time the Volt gets released it will be known as the Toyota Volt since that is who will own GM by the end of next year

[pcreversed]

AAnd the american people will be remembered as the people who elected those morons because their over riding priority was stopping them thar *** getting married



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Posted by cause_y at 09:42 PM : Nov 18, 2008

Nobody is keeping anybody from getting married. No one that matters anyway. The only group I can think of that has been kept from marrying, as insignificant as the ****''s are, they are the only group that can not marry in this country, and who cares about them. On that note though, the Reps did not keep them from getting married, it was the Dems. They are the ones who came out in droves to vote this year and voting it in place, thank God for that

[pcreversed]

Credit was being extended to people who had no intention, ability, or want to pay it back. That being said, our economy was artificually inflated for years now. If credit was resticted to only the ones who could afford it and had the intention of paying it back, our economy would never have been nearly as strong over the last decade. Our economy was built off undeserved credit and now we need to reajust it back to conventional lending practices. It should have never gotten out of hand like it did and allot of you who own house you can not afford should never have been allowed to buy them. Also, with the number of illegals we still have here(though there are fewer here since the economy started its crash, thank God), our economy will take longer to recover. They are filling jobs that Americans could and would fill. Also, our auto makers need to finally go out of business, it is a death that is far over-due. They have not built anything worth owning since the early 70''s.

[frankfurt200]

Posted by HITAH at 09:35 PM

Thanks to Bush, we is so happy. The economy is so robust. Well, that''s what he said! And McCain too.

[hitah]

Anybody remember the statement that this congress has the lowest approval rating ever?

Hey libs - you have been in control of the lowest rated congress since 2006! You are just lucky the general public does not pay enough attention to really know who has caused the problems. 3 years from now this country will be in such bad shape you will not be able to find anyone that will admit voting for Obama! Go get em" Jimmy Carter jr.!