Is Obama serious? - Page 4

Bunky · 09-30-08, 06:05

This is an election year. Each side blames each other. In this case, since the Bush is in office he and the party get the blame and Obama is trying to take advantage of it. McCain does the same thing by exaggerating points and trying to use the Clinton name as a smear (reviled by many republicans)

For example, you can debate the economics of the Obama tax plan but it just gets to the "he wants to raise everyones taxes" or the "tax the rich" in the ads. Neither plan will likely see light of day once elected since the Congress really formulates the deal. We never got tax reform (just tax cuts without spending cuts and plenty of loopholes in the code) even after almost 6 yrs.

It worries me that McCain could not get the votes for the bailout (if he was really serious about getting them). Whichever person wins may be more handicapped than in the past.

BigAl3 · 09-30-08, 06:10

off topic... would it be the right time to buy a house (before the end of the year) before we elect the new president?

Bunky · 09-30-08, 06:15

Quote:

Originally Posted by jfsully

One issue not understood by the public is the issue of "mark to market". Because of that accounting issue, if the only bids for a package of loans are ridiculously and artificially low, all companies must mark their like assets (the loans) to the ridiculous level. This causes financial ratios to be out of whack and hastens the failure of the institution.

My assumption is the Mark to Market idea is to keep places from holding investments/loans claiming they are worth more than the really are.

To use your available, if you claim your property is worth $1 (not use a dollar bill since that is currency) and no one will pay for (the market is a willing buyer and seller), then it probably is not worth $1 at that point in time. Without something like this, I can see how you could over inflate your value claiming it is worth what it is. The question is how do you value property in an accounting way when prices have dropped.

Jakerooni · 09-30-08, 07:26

Quote:

Originally Posted by BigAl3

off topic... would it be the right time to buy a house (before the end of the year) before we elect the new president?

At this point in time you'd have to have an almost perfect credit score with zero marks on it and about 40% down to even get looked at for any sort of mortgage loan. It's almost impossible right now until this mess gets under control.

jfsully · 09-30-08, 08:30

If something is paying a cash flow (the underlying mortgages) certainly they should not be valued at zero. If the properties that are backing the loans are worth 70% of the loan value then they should be realistically be valued near 70% (if they are not in default).

The problem is there is NO secondary market right now and IF someone tries to sell, its a "fire sale" and the purchasers are almost stealing the assets. The market knows that as a bank needs to liquidate a holding to be in compliance, they must take ridiculously low offers or go under. This drives prices down again and has become a vicious cycle.

The revised bill (that failed) and all new proposals I've seen, gives the SEC the right to suspend the mark to market provision. The failed bill also called on the SEC to analyze how much M-T-M exacerbated this situation an report back to Congress with 60-90 days.

mattgg11 · 10-01-08, 08:14

Quote:

Originally Posted by Jakerooni

At this point in time you'd have to have an almost perfect credit score with zero marks on it and about 40% down to even get looked at for any sort of mortgage loan. It's almost impossible right now until this mess gets under control.

Not true.

My friend is buying a condo as I type this. He is a first time home buyer, credit score around 720-740, with only 3% down. It was a very easy process for him, he got decent offers from three banks.

Also, I just refinanced my new wife's condo. 5.75% 15yr fixed rate and $250 closing costs. All I had to do was fax them my last two W-2's and paycheck stubs.

weekendwarrior · 10-01-08, 09:37

They have definitely clamped down on mortgages, but it isn't nearly as hard as a lot of people currently claim. I have friends, with decent, but not perfect credit, and less than 20% down that just bought a house.

qwertydude · 10-01-08, 09:52

It depends on your location, here in socal I've been seeing home sales nearly stall. Everyone has had for sale signs up for months, asking for too much since home values keep going down no one wants to pay what they are asking since even if they could get a loan it would be unwise because when it comes time to sell the home they take a loss.

ebpcivicsi · 10-01-08, 10:25

I typically don't participate in political threads because they get so ugly, but I did just move out of my house into a new one.

IME, it's a "show-me-the-money" deal right now. We have excellent credit scores, but once they found out that we could put 20%+ down, they didn't ask for much more.

MSOsr · 10-01-08, 10:29

You want socialized medicine? Go to a trauma center and look at the uninsured people clogging the ER with sniffles, etc., because the ER is required to treat them even if they can't pay.

If EVERYONE can go to the doctor for free, how soon do you think you will be able to get an appointment? In England, people are waiting 6 months just to get an MRI....imagine if that was to determine whether you had cancer or not. In America, you could get it done the same day it was ordered.

If you have a plasma TV and 2 cars, you could afford to be insured. It's just a choice you have to make.

Mike

MSOsr · 10-01-08, 10:43

Quote:

Originally Posted by Setec Astronomy

There's the problem right there. A favorite catch phrase of politicians is that "the engine of our economy" is small business, yet businesses are allowed to combine and merge until they are "too large to fail", and even in the shadow of a bailout for them, ML and Wachovia get bought up. The bigger the big businesses get, the harder it is for those "engines of our economy" to survive. Try and run a pharmacy against Walgreen's and CVS, a hardware store against Lowe's and Home Depot, or an airplane company against Boeing. Even Toys R Us couldn't compete against Wal-Mart, how's the corner toy store going to?

And if there are 10 financial institutions instead of 100, and one of them is poorly managed and gets messed up, that's 10 times the impact to Wall St. and Main St.

Expansion can mean building a branch office or adding ATMs -- something to offer better service to the community. However, ACORN and others were blocking these expansions under the CRA because they felt not enough of the expansion was to lower income areas. ACORN received something like $760 mil under the CRA (I think that's the number).

Why would a bank build a new facility in an area that doesn't have depositers? Go to the slum areas of your town and look at the bank buildings that are closed up and just rotting away.... all built because they were required by Clinton's expansive use of the CRA.

Corner stores, like detailers, can beat the big guys by offering a better product and/or better service. I'll certainly buy groceries from my local grocer (who calls me by name when I go into the store) instead of from WalMart where I might save 10%.

Mike

Setec Astronomy · 10-01-08, 11:04

Quote:

Originally Posted by MSOsr

Expansion can mean building a branch office or adding ATMs -- something to offer better service to the community.

Yeah, it COULD mean that, but it hasn't. My little local bank, limited to one county, had 12 or so branches. I knew the manager on a first name basis. Then they were allowed to go out of county, so they merged with a bank in the next county, perhaps doubling their size. Then they gobbled up a few other small local banks until they were big enough to be bought by Fleet. Fleet was so nice, they converted my free checking account I had for 15 years to one that cost $12 a month, without asking. When I went down there to complain, they had a line coming out the door of people with the same complaint. The manager that I knew was gone, but the new Fleet people told me I should be happy paying $12/month, because I was getting all kinds of more stuff with my new account! Then, just when they got all the signs changed, Bank of America bought Fleet. So my little local bank now has what, 12,000 branches? You can't even get a phone number for or find when your local branch is open. Not progress in my book...the only upside is that BoA hasn't gone bankrupt--yet.

Quote:

Originally Posted by MSOsr

Corner stores, like detailers, can beat the big guys by offering a better product and/or better service. I'll certainly buy groceries from my local grocer (who calls me by name when I go into the store) instead of from WalMart where I might save 10%.

You're in the minority, HD and Lowes killed almost all the little hardware stores, and the smaller chains around here. Walgreens and CVS have killed almost all of the little pharmacies. It takes some time, but usually the big chains kill the independent stores. It's happening to the sandwich shops now, got a Quizno's and a Subway a stone's throw from each other. (BTW, the bakery where I used to get donuts for the guys at work once in a while is a Dunkin' Donuts now).