patrick.net

ChrisLA says

Socialism....blah blah... End result is that the people at the top get all the perks, while everyone in the middle has to work and struggle their way through life to pay for it all.

Wow substitute socialism there for USA and I get the same results.

Seems like all the middle classers I know are slaves as surely as your description of "socialism". Paying that mortgage, paying that car, paying that insurance. The bankers and parasites get rich, and at the end of it the middle class ends up panicking near retirement. Realizing they've died the death of a thousand cuts due to interest collected over the years and middleman fees, and what have they got to show for it? Heartburn that they may spend their golden years clipping coupons and having to choose between meds or food. Whatever you want to call the American system now, I like plutocracy. There is actually very little real mobility and 99% of those born into "lower classes" will end their lives there. The system here is finely attuned to make sure the cattle stay in the plow and in debt until they are flat worn out. I wouldn't call it capitalism definitely, there's far too much control by the established players to say it's a purely free market.

ChrisLA says

As long as government provided guaranteed backing of the mortgages those who were selling them didn’t actually care if loans would be paid.

that was part of the problem that provided transaction volume at the low-end but didn't cause prices to exceed *the ability of borrowers to pay*.

And government-backed loans were limited to the conforming limit and had other restrictions that the Alt-A and non-conforming market eliminated when the industry went wild 2002-2006.

Also Fannie and Freddie were somewhat limited during the 2002-2004 period and were losing market share to the private label securitizers, who were engineering their loans to stay out of default just long enough to avoid having to take them back.

Also, allowing HELOCs and cash-out refis to feed back into mortgage payments was a big part of the bubble.

Texas was much stricter about HELOCs and did not have the bubble blow up that the wild-west states did.

The GSEs were NOT the problem 2002-2005.

Troy says

Also Fannie and Freddie were somewhat limited during the 2002-2004 period and were losing market share to the private label securitizers,

Yes, it was the private label lenders, and the investment banks the securitized the loans that were the heart of the problem. It's really frustrating that millions of people like ChrisLA keep repeating the same lie over and over and over and over.

It all started back in the mid 90's, and none of these loans that are in this graph had anything to do with the government.

Note the scale of the right hand portion is different than the left hand portion.

Issuance volume isn't the problem per se, either. It'd be great if everyone could have bought a house in 2004-2005.

The real problem was simply the suicide lending, the loans that were poorly underwritten and essentially engineered to blow up in 2 to 5 years if the market reversed.

The GSEs do share some of the blame here since outfits like Countrywide were packing billions of dollars of shitty loans, giving the GSEs the 80% piece and syndicating the 20% mezzanine paper.

The GSE's automatic underwriting systems were also being gamed, as brokers were free to enter and re-enter numbers into the computer until they got the loan approved.

GSEs were certainly part of the problem but the main problem was the private market going utterly lawless in 2002-2005. This was similar to the S&L days, and due to the same lack of government law enforcement and regulatory oversight.

The people behind this market failure are trying very hard to obfuscate their culpability. They will probably succeed because we are a very stupid people.

Nomograph says

ChrisLA says

Your accusation is baseless.

You clearly don’t know what Socialism is.
(HINT: There is no private enterprise under Socialism. NO private banks, NO mortgage brokers, NO RE agents, NO 7-11’s, NO WalMarts, etc.)
Why not find out what Socialism is, then come back and have this discussion?

I never said there is private enterprise under socialism. In fact I pointed out the problem with centralized system.

Vicente says

...The bankers and parasites get rich, and at the end of it the middle class ends up panicking near retirement. Realizing they’ve died the death of a thousand cuts due to interest collected over the years and middleman fees, and what have they got to show for it?...

I've been thinking about this a lot lately. As (I think Troy pointed out) people get the government they deserve. This nation is ruled by greed and corruption. So it is no wonder that government officials are corrupt sell outs who come there just to get rich instead of providing a service to once nation.

I'm often disgusted with our system of pretend free market as I am with pretend socialism in other places. All of these ideas are only as good as people in them. And society as a whole isn't always that good.

Hundreds of thousands march in London to protest cuts in spending. Governments all over the world are running out of money for their social/welfare programs. Where will it all end?

http://www.dailymail.co.uk/news/article-1370053/Biggest-demo-hit-London-Iraq-war-march-400-000-join-anti-cuts-protest.html

RayAmerica says

Where will it all end?

It may end when governments stop supporting failure in the banks, when they stop rewarding corporate interests over civic interests, when they stop selling out their own people so that business can make a few more bucks... there's more than enough resources to go around if the wealthy would stop hoarding it and parcelling it out to others so that they can make more money.

Now that I have a daughter I'm more and more beginning to realize that her life is not a plaything for someone else's profit margin.

And at this point I think the worst thing about Socialism is this thread.

kentm says

there’s more than enough resources to go around if the wealthy would stop hoarding it and parcelling it out to others so that they can make more money.

Do you know of any people that have less money than you? Do you have a savings account .... stock investments, etc.? If you do, you are "hoarding" as well. It's time for you to stop hoarding and start "parcelling it out to others" so the less fortunate than you "can make more money."

RayAmerica says

Do you have a savings account …. stock investments, etc.? If you do, you are “hoarding” as well. It’s time for you to stop hoarding and start “parcelling it out to others” so the less fortunate than you “can make more money.”

Good point. That's exactly like when the part of ones income that is above 250K gets taxed at 39% instead of 35%.

America can look to England for an illustration of what our future will look like. Is this really what we want?

http://www.bbc.co.uk/news/health-12964360

Problem with socialism is a tunnel visioned government that rams down it's ideals disregarding how it will impact everyone (since they have no way of knowing it). And defending it politically for the next 10-50 years, even if it's failing, under pretense of helping the poor while they skim millions for themselves.

Chris .... you are 100% correct. I'd add one thing; socialist programs also buy huge blocks of votes, the very thing many of our founding fathers warned us against.

RayAmerica says

Chris …. you are 100% correct. I’d add one thing; socialist programs also buy huge blocks of votes, the very thing many of our founding fathers warned us against.

Socialist programs like for example the military, which with it's generous pension and medical policies, is a communist wet dream. Not to mention the military industrial complex which is thoroughly embedded in every state thus buying the votes of every state. Yes our Founding Fathers warned us of the dangers of a standing army, yet it's startling how many self-style "Patriots" are firmly in favor of sacrificing ALL other programs so we can keep military bases across the planet.

Vicente says

yet it’s startling how many self-style “Patriots” are firmly in favor of sacrificing ALL other programs so we can keep military bases across the planet.

You can't be thinking about me as one of your "Patriots." I favor bringing home ALL the troops in Europe, Korea, Japan, etc. and ending our involvement in the Middle East. Your Chief "Patriot" has dramatically expanded the war in Afghanistan and is seeking more war in Libya. I wonder if you took part in the standing ovation when the fraud won his Peace Prize?

RayAmerica says

I wonder if you took part in the standing ovation when the fraud won his Peace Prize?

Wasn't invited.

Vicente says

Socialist programs like for example the military, which with it’s generous pension and medical policies, is a communist wet dream. Not to mention the military industrial complex which is thoroughly embedded in every state thus buying the votes of every state. Yes our Founding Fathers warned us of the dangers of a standing army, yet it’s startling how many self-style “Patriots” are firmly in favor of sacrificing ALL other programs so we can keep military bases across the planet.

I am in agreement on this one, I don't like that we have a standing army over-expanded around the world to protect random corporate interest at the cost to our own liberty. I'm very much with founding fathers on the idea that we should commerce with all yet ally with none.