Thread: Credit crisis

Originally Posted by gssixgun

Ahhhhhh see Bruno that's what the lending rules should be
...

I would almost bet that you have never even heard of ARM & Balloon loans where you are at?????? Other than in the news????

Don't know what that means.
There are basically only 2 types of loans here: fixed interest rate, and variable interest rate.
With fixed, you won;t get the minimum interest rate, but it'll never change.
With variable you get the minimal rate, but it may increase.

However, variable rates have to extra constraints: The % of your wages that you can borrow is lower (i.e. the banks assume the rate will rise). This means that if you can get a fixed rate loan where you pay off 1000$ per month, your variable rate loan will be max 900$ to start with.
On top of that, the banks will also demand that you have 20% (or something like it) of the value in liquid assets. That way they minimize the risk.

My mortage is a hybrid, which is getting more common. Mortgage over 20 years, with a fixed rate for the first 10 years, and then a possible adjustment at 10 and 15 years, up to a total max 2% increase of the starting index rate. For our case, this was the most optimal, and the risk is very limited because the interest rate can never be more than what it is now + 2%.

Btw, all loans are registered (by law) with a central financial database. This is to prevent people from getting themselve into trouble with multiple loans.

It comes down to people that have zero patience and just don't care. They convince themselves that they need or deserve something. What we've experienced is what I would think the "roaring 20's" was like. Except in this case, people are living far more beyond their means.

What really frightens me is some FDR wannabe going to town on our system for round two.

Originally Posted by Quick Orange

It comes down to people that have zero patience and just don't care. They convince themselves that they need or deserve something. What we've experienced is what I would think the "roaring 20's" was like. Except in this case, people are living far more beyond their means.

What really frightens me is some FDR wannabe going to town on our system for round two.

Interesting, especially when you consider that the Glass-Steagall Act of 1933, one of Roosevelt's "First 100 Days" initiatives, was what kept us safe from this kind of irresponsible speculation -- right up until that idiot Gramm and his buddies Leach and Bliley spearheaded the repeal of Glass Steagall's most important protections. The fact that the right wing continues to demonize FDR doesn't change the fact that, all things considered, and especially considering the mess he inherited, he did a pretty good job.

j

You know that the consensus among economists is that the bulk of FDR's programs, specifically the spending and welfare ones, actually hurt us more than helped us, right? WWII was actually a helpful thing for our economy. FDR's policies were typical Democrat feel-good policies which sound great to the blue-collar masses, but in the end don't accomplish much. If it's right wing to disagree with moronic government spending, then I'm certainly a right winger.

To me though, our government isn't a business or a safety net. Its only form of income is and should be taxes. To "create jobs" by spending tax money doesn't make sense. If the government could do without that money in the first place, then why tax it?

Originally Posted by Quick Orange

You know that the consensus among economists is that the bulk of FDR's programs, specifically the spending and welfare ones, actually hurt us more than helped us, right? WWII was actually a helpful thing for our economy. FDR's policies were typical Democrat feel-good policies which sound great to the blue-collar masses, but in the end don't accomplish much. If it's right wing to disagree with moronic government spending, then I'm certainly a right winger.

To me though, our government isn't a business or a safety net. Its only form of income is and should be taxes. To "create jobs" by spending tax money doesn't make sense. If the government could do without that money in the first place, then why tax it?

As opposed to Bush's feel good policies which sound great to big oil execs, and other corporate big wigs. They actually accomplish quite a bit, such as bailing out huge companies using taxpayer dollars.

Quite effective!

Originally Posted by Seraphim

As opposed to Bush's feel good policies which sound great to big oil execs, and other corporate big wigs. They actually accomplish quite a bit, such as bailing out huge companies using taxpayer dollars.

Quite effective!

I never said our current policies make me happy either. What I'm saying is that both candidates are screaming "we need change!", and so far all I've gotten from that is that they want my pocket money. Neither have committed to any actual plan, and it will likely devolve into the creating jobs bullcrap that so many people think will bail us out.

Originally Posted by Quick Orange

I never said our current policies make me happy either. What I'm saying is that both candidates are screaming "we need change!", and so far all I've gotten from that is that they want my pocket money. Neither have committed to any actual plan, and it will likely devolve into the creating jobs bullcrap that so many people think will bail us out.

Fair 'nough!