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Across the Fence:  Is anyone concerned about the whole bank crisis?  |
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K-Falls Farmgirl
Chapter Leader
2096 Posts
Cheryl
Klamath Falls
Oregon
USA
2096 Posts |
 Posted - Sep 29 2008 : 10:49:18 AM
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We also have GMAC Mortgage.. I do believe it's safe.. If people would only live within their means and teach their children to do the same, Credit card companies and loans companies would have to look hard at their practices. I realize sometimes Loans are a must , but you must be able to PAY back.A lot of people and their kids are in a "Have to have" society more than a "need for survival." especially when things are so expensive, Thats supply & demand I guess....
May we all have what we need and live simply, happily and feel a sence of wealth in wholesome family and friends.
Cheryl #309
Farm girl sister
Keep life simple, to Simply live. Life is too short to worry about it. |
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fionalovesshrek
True Blue Farmgirl
186 Posts
Paige
kinston
North Carolina
USA
186 Posts |
Posted - Sep 29 2008 : 11:12:21 AM
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The House rejected the Bill. I hope it gets dropped now, we can struggle our way back up without putting our children, and our childrens children in debt.
P~
www.fionaswampington.blogspot.com
http://homespunhensfarmgirlchapter.blogspot.com/
Man, despite his artistic pretensions, his sophistication, and his many accomplishments, owes his existence to a six inch layer of topsoil and the fact that it rains. |
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Dragonfly Farm
Farmgirl at Heart
5 Posts
Millissa
Fernwood
ID
USA
5 Posts |
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Betty J.
True Blue Farmgirl
1403 Posts
Betty
Pasco
WA
USA
1403 Posts |
Posted - Sep 29 2008 : 11:44:23 AM
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What do you want to bet that the whole group of those clowns vote themselves a raise after all this is over?
Betty in Pasco |
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miss wilma
True Blue Farmgirl
3410 Posts
Wilma
Knob Lick
Ky
USA
3410 Posts |
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Alee
True Blue Farmgirl
22941 Posts
Alee
Worland
Wy
USA
22941 Posts |
Posted - Sep 29 2008 : 1:47:04 PM
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I haven't heard about GMAC being in trouble, but I do know that the "foundation" banks such as Wells Fargo and First Interstate are going to weather this storm just fine. I keep a really sharp eye on these two as my husband works for Wells Fargo. We also were talking about it in my accounting class. We aren't ready for a home loan for a while yet, but when we do, we will for sure be going with one of those two banks.
Alee
Farmgirl Sister #8
www.awarmheart.com
Please come visit Nora and me on our blog: www.farmgirlalee.blogspot.com
Put your pin on the farmgirl map! www.farmgirlmap.blogspot.com |
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miss wilma
True Blue Farmgirl
3410 Posts
Wilma
Knob Lick
Ky
USA
3410 Posts |
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K-Falls Farmgirl
Chapter Leader
2096 Posts
Cheryl
Klamath Falls
Oregon
USA
2096 Posts |
Posted - Sep 29 2008 : 4:53:47 PM
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We just checked with our financial adviser.. He says we are OK!. He has helped us kept our finances in order for the past 8 years.. He has us diversified in several different accounts with some with growth and some with income.. DH is disabled and draws SSDI. I retired with a small 401k. We will continue to follow his advice and use our banking practice, We pay for things as we need them and try not to charge without paying the balance off each month. Thankfully we found our piece of heaven here..a small 1 acre and beautiful 2 year old 2000sq ft home when we did and were lucky to sell our home in Arizona (which was on the market for 14 long months)We will be watching our pennies carefully...and pray for change.
Cheryl #309
Farm girl sister
Keep life simple, to Simply live. Life is too short to worry about it. |
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laluna
True Blue Farmgirl
295 Posts
New York
USA
295 Posts |
Posted - Sep 29 2008 : 5:18:06 PM
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Interesting commentary:
http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html
By Jeffrey A. Miron
Special to CNN
Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.
Economist Jeffrey Miron says the bailout plan presented to Congress was the wrong solution to the crisis
CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.
This bailout was a terrible idea. Here's why.
The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.
Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.
This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.
Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.
The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.
The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.
Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.
In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.
Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.
Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.
Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.
The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.
If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.
The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.
Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.
So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.
The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.
"I believe in God, only I spell it Nature." -- Frank Lloyd Wright |
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Rebekka Mae
True Blue Farmgirl
965 Posts
Rebekka
Moscow
ID
USA
965 Posts |
Posted - Sep 29 2008 : 7:54:12 PM
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Very interesting posts- I mean, we are just propping up a speculative system...and really, like we don't have enough debt as a country. It seems to me you can't throw debt at debt and expect it to go away.
Until we know more I am contented knowing I have some honest skills that will help us get through tough financial times.
Micheal Moore wrote an interesting post today that I found, it basically says the bailout is all wrong because people are not defaulting on their current mortgages because they bought more house than they can afford (which many did at a huge cost to themselves and the environment)- most bankruptcies and defaulted loans are actually caused by overwhelming medical bills-
how about we throw $700 billion at universal health care?
Aren't we worth it?
Rebekka
www.bebebella.etsy.com
As a woman I have no country. As a woman, my country is the whole world.
Virginia Woolf |
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Across the Fence: Is anyone concerned about the whole bank crisis? |
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Is anyone concerned about the whole bank crisis?
