djAdvocate
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Post by djAdvocate on Aug 3, 2012 10:43:10 GMT -5
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Driftr
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Post by Driftr on Aug 3, 2012 11:15:50 GMT -5
Ah yes. Krugman and his print more money mantra. How refreshing.
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Post by Deleted on Aug 3, 2012 11:23:24 GMT -5
Krug says it's impossible to spend less than your income? I'd like to know what's flapping around in his head !
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busymom
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Post by busymom on Aug 3, 2012 12:06:51 GMT -5
Of course it's possible to spend less than you make! How else could we put away money for retirement? (Or in DH's & my case, pay off all of our credit card debt.)
Does Krug really believe we are all supposed to spend more than what we make?!? That philosophy is probably what got our country in this mess in the first place!
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Post by cme1201 on Aug 3, 2012 12:29:39 GMT -5
Fixed!
Couldn't resist
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 12:54:56 GMT -5
Krug says it's impossible to spend less than your income? I'd like to know what's flapping around in his head ! no, Krug said that repayment of debt is driving down in consumption. try removing that windmill from your head before commenting on Krugman's flaps. ![;)](//storage.proboards.com/forum/images/smiley/wink.png)
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 12:55:49 GMT -5
Ah yes. Krugman and his print more money mantra. How refreshing. that is not what he said at all. did you not make it past the spending line? what he said is that debt relief is the problem. i actually agree with him. i would love to refi my house right now, but i can't. i am too far underwater. if the guv would step in and back my loan, i could do it, and i have no problem paying. i am in this house for life. why do i bother posting stuff? ![???](//storage.proboards.com/forum/images/smiley/huh.png) note to all the moderate to conservatives: Krugman is not a communist. really.
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 12:56:38 GMT -5
Of course it's possible to spend less than you make! How else could we put away money for retirement? (Or in DH's & my case, pay off all of our credit card debt.) Does Krug really believe we are all supposed to spend more than what we make?!? That philosophy is probably what got our country in this mess in the first place! mom, i know you are busy, but did you read the article, or are you just responding to the paraphrasers?
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Driftr
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Post by Driftr on Aug 3, 2012 13:04:34 GMT -5
Ah yes. Krugman and his print more money mantra. How refreshing. that is not what he said at all. why do i bother posting stuff? ![???](//storage.proboards.com/forum/images/smiley/huh.png) note to all the moderate to conservatives: Krugman is not a communist. really. Yes it is. Unless he's talking about decreasing .gov spending to prevent the issuance of additional debt they'd be forced to issue to fund the losses FNMA will take if they are forced to write down these loans, that's exactly what he's saying.
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 13:07:37 GMT -5
that is not what he said at all. why do i bother posting stuff? ![???](//storage.proboards.com/forum/images/smiley/huh.png) note to all the moderate to conservatives: Krugman is not a communist. really. Yes it is. Unless he's talking about decreasing .gov spending to prevent the issuance of additional debt they'd be forced to issue to fund the losses FNMA will take if they are forced to write down these loans, that's exactly what he's saying. no he isn't. he is talking about debt relief. he didn't specify what form that was in at all. he said that we are focusing in stimulus, but there is no way it is going to work, because the consumer can't spend money when he or she can't restructure debt. at least that is how i read it.
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cme1201
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Post by cme1201 on Aug 3, 2012 13:17:21 GMT -5
he is talking about debt relief
He is speaking specifically to allowing fanny and freddie to write down mortgages. Where will the lost money (the money that was originally loaned on these properties) come from? Fanny and Freddy bought these mortgages from banks for the face value of the mortgage, so if you reduce the amount from 100k to 50k where is the lost (forgiven) 50k to come from? Either more money will need to be printed or loans will to be taken to cover the extreme shortfall.
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Driftr
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Post by Driftr on Aug 3, 2012 13:18:06 GMT -5
Yes it is. Unless he's talking about decreasing .gov spending to prevent the issuance of additional debt they'd be forced to issue to fund the losses FNMA will take if they are forced to write down these loans, that's exactly what he's saying. no he isn't. he is talking about debt relief. he didn't specify what form that was in at all. he said that we are focusing in stimulus, but there is no way it is going to work, because the consumer can't spend money when he or she can't restructure debt. at least that is how i read it. The whole second half of his article is talking about how the GSAs should take the write-down. Since .gov has put itself in the position of funding the GSAs, the losses that will come about from these write downs will need to be paid for by .gov one way or another. That's how I read it.
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 13:20:18 GMT -5
he is talking about debt reliefHe is speaking specifically to allowing fanny and freddie to write down mortgages. Where will the lost money (the money that was originally loaned on these properties) come from? Fanny and Freddy bought these mortgages from banks for the face value of the mortgage, so if you reduce the amount from 100k to 50k where is the lost (forgiven) 50k to come from? Either more money will need to be printed or loans will to be taken to cover the extreme shortfall. given than FNMA is quasi public, not truly public, i am not sure that the mechanism for refinancing their coffers works quite that way. but if the mortgages are valueless, then they will have to be written down anyway, right? what else IS to be done?
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 13:21:19 GMT -5
no he isn't. he is talking about debt relief. he didn't specify what form that was in at all. he said that we are focusing in stimulus, but there is no way it is going to work, because the consumer can't spend money when he or she can't restructure debt. at least that is how i read it. The whole second half of his article is talking about how the GSAs should take the write-down. the wholee second half is him babbling about DeMarco like some sort of love sick parrot.Since .gov has put itself in the position of funding the GSAs, the losses that will come about from these write downs will need to be paid for by .gov one way or another. That's how I read it. mmmkay.
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Driftr
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Post by Driftr on Aug 3, 2012 13:26:24 GMT -5
the wholee second half is him babbling about DeMarco like some sort of love sick parrot. I read it like he was a five year old whining about wanting his pudding before he'd finished his meat. Are we in agreement that Krugman is looking for a .gov bailout of the underwater homeowner funneled through the GSAs?
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cme1201
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Post by cme1201 on Aug 3, 2012 13:26:25 GMT -5
if the mortgages are valueless
The mortgages are not valueless.
what else IS to be done
Same thing that has always been done, allow the market to bottom, gain a glut, reduce inventory and allow the cycle to slowly increase as it always has.
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busymom
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Post by busymom on Aug 3, 2012 13:31:23 GMT -5
Hi DJ: Yes, I read the article. I just had to comment on the portion that bothered me. ![;)](//storage.proboards.com/forum/images/smiley/wink.png) He did touch on a subject worth commenting further on. If both political parties actually tried to work together (at least sometimes), we'd be digging our economy out of trouble a lot faster.... So, do you think DeMarco IS the problem, or a convenient scapegoat?
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 13:33:50 GMT -5
Hi DJ: Yes, I read the article. I just had to comment on the portion that bothered me. ![;)](//storage.proboards.com/forum/images/smiley/wink.png) He did touch on a subject worth commenting further on. If both political parties actually tried to work together (at least sometimes), we'd be digging our economy out of trouble a lot faster.... So, do you think DeMarco IS the problem, or a convenient scapegoat? candidly?, convenient scapegoat. Krugman gets a bit OCD. ![;)](//storage.proboards.com/forum/images/smiley/wink.png)
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 13:34:21 GMT -5
if the mortgages are valuelessThe mortgages are not valueless. what else IS to be doneSame thing that has always been done, allow the market to bottom, gain a glut, reduce inventory and allow the cycle to slowly increase as it always has. what are the consequences of this on the consumer credit market, iyo?
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 13:36:01 GMT -5
the wholee second half is him babbling about DeMarco like some sort of love sick parrot. I read it like he was a five year old whining about wanting his pudding before he'd finished his meat. do you like Pink Floyd, Driftr?Are we in agreement that Krugman is looking for a .gov bailout of the underwater homeowner funneled through the GSAs? i am not sure, because as i said before, i don't quite understand the mechanism by which FNMA gets refunded. i know how most OTHER banks work, but this is an entirely different animal. as i said before, i didn't read it that way, but i can certainly see how you did.
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Driftr
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Post by Driftr on Aug 3, 2012 13:38:06 GMT -5
I used to more than I do these days and I have seen that movie in more 'states' than anyone should. Glad you picked up on it though.
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 13:50:05 GMT -5
I used to more than I do these days and I have seen that movie in more 'states' than anyone should. Glad you picked up on it though. he takes confessional songwriting to a painful extreme.
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Post by Deleted on Aug 3, 2012 13:53:15 GMT -5
Krug says it's impossible to spend less than your income? I'd like to know what's flapping around in his head ! no, Krug said that repayment of debt is driving down in consumption. try removing that windmill from your head before commenting on Krugman's flaps. ![;)](//storage.proboards.com/forum/images/smiley/wink.png) <<<Loosely speaking, excess debt has created a situation in which everyone is trying to spend less than their income. Since this is collectively impossible — my spending is your income, and your spending is my income — the result is a persistently depressed economy.>>> Krug should get his head examined if he thinks that every one is going to do the same thing in any economy. If he doesn't, the statement is misleading nonsense. I'm leaving the windmill in place, it's running smoothly. ![:)](//storage.proboards.com/forum/images/smiley/smiley.png)
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Driftr
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Post by Driftr on Aug 3, 2012 13:55:17 GMT -5
Are we in agreement that Krugman is looking for a .gov bailout of the underwater homeowner funneled through the GSAs? i am not sure, because as i said before, i don't quite understand the mechanism by which FNMA gets refunded. i know how most OTHER banks work, but this is an entirely different animal. as i said before, i didn't read it that way, but i can certainly see how you did. Well I screwed up. It's GSEs, not GSAs. I think the most recent quarter was the first that FNMA didn't need to borrow more from .gov to pay .gov the dividend on the preferred shares given out when they were taken into conservatorship. I know even less about Freddie.
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Driftr
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Post by Driftr on Aug 3, 2012 14:04:24 GMT -5
no, Krug said that repayment of debt is driving down in consumption. try removing that windmill from your head before commenting on Krugman's flaps. ![;)](//storage.proboards.com/forum/images/smiley/wink.png) <<<Loosely speaking, excess debt has created a situation in which everyone is trying to spend less than their income. Since this is collectively impossible — my spending is your income, and your spending is my income — the result is a persistently depressed economy.>>> Krug should get his head examined if he thinks that every one is going to do the same thing in any economy. If he doesn't, the statement is misleading nonsense. I'm leaving the windmill in place, it's running smoothly. ![:)](//storage.proboards.com/forum/images/smiley/smiley.png) Defaulting and allowing excess debt to clear the system is the way forward. The problem with Krugman's proposed solution is that if we force it to happen via the GSEs the debt doesn't get defaulted, it just moves onto the .gov balance sheet. We want to quick fix it? Not going to happen IMO. Bush and Clinton and allowing the forcing of what were fully functioning companies (Fannie/Freddy) into taking on loans that had no business being made screwed things up. If we want to fix this moving forward I believe that a certain % of every mortgage made needs to stay on the originating banks balance sheet and we need to get back to sound standards in mortgage lending. Yes. This will mean people will need to save that 20% down for their house. Yes. It will crush the housing market for a while. I belive at the end of that path we find sustainable growth.
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Post by Deleted on Aug 3, 2012 14:13:20 GMT -5
Drftr
I think people need to save for housing....but putting 20% in every case is crazy. The riskiest deals need the most equity.....
But i also dont think we should be doing 0-3% deals either
10% for better credit scores.....and 15-20% for mediocre scores
Making every deal a 20% down will kill what little market there is...especially in higher cost areas
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Post by Deleted on Aug 3, 2012 14:14:32 GMT -5
<<<Loosely speaking, excess debt has created a situation in which everyone is trying to spend less than their income. Since this is collectively impossible — my spending is your income, and your spending is my income — the result is a persistently depressed economy.>>> Krug should get his head examined if he thinks that every one is going to do the same thing in any economy. If he doesn't, the statement is misleading nonsense. I'm leaving the windmill in place, it's running smoothly. ![:)](//storage.proboards.com/forum/images/smiley/smiley.png) Defaulting and allowing excess debt to clear the system is the way forward. The problem with Krugman's proposed solution is that if we force it to happen via the GSEs the debt doesn't get defaulted, it just moves onto the .gov balance sheet. We want to quick fix it? Not going to happen IMO. Bush and Clinton and allowing the forcing of what were fully functioning companies (Fannie/Freddy) into taking on loans that had no business being made screwed things up. If we want to fix this moving forward I believe that a certain % of every mortgage made needs to stay on the originating banks balance sheet and we need to get back to sound standards in mortgage lending. Yes. This will mean people will need to save that 20% down for their house. Yes. It will crush the housing market for a while. I belive at the end of that path we find sustainable growth. Agreed !
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 14:19:13 GMT -5
Message deleted by djlungrot.
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djAdvocate
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Post by djAdvocate on Aug 3, 2012 14:19:37 GMT -5
<<<Loosely speaking, excess debt has created a situation in which everyone is trying to spend less than their income. Since this is collectively impossible — my spending is your income, and your spending is my income — the result is a persistently depressed economy.>>> Krug should get his head examined if he thinks that every one is going to do the same thing in any economy. If he doesn't, the statement is misleading nonsense. I'm leaving the windmill in place, it's running smoothly. ![:)](//storage.proboards.com/forum/images/smiley/smiley.png) Defaulting and allowing excess debt to clear the system is the way forward. The problem with Krugman's proposed solution is that if we force it to happen via the GSEs the debt doesn't get defaulted, it just moves onto the .gov balance sheet. We want to quick fix it? Not going to happen IMO. Bush and Clinton and allowing the forcing of what were fully functioning companies (Fannie/Freddy) into taking on loans that had no business being made screwed things up. If we want to fix this moving forward I believe that a certain % of every mortgage made needs to stay on the originating banks balance sheet and we need to get back to sound standards in mortgage lending. Yes. This will mean people will need to save that 20% down for their house. Yes. It will crush the housing market for a while. I belive at the end of that path we find sustainable growth. what would the consequences of this for the consumer credit market?
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Post by Deleted on Aug 3, 2012 14:23:40 GMT -5
Defaulting and allowing excess debt to clear the system is the way forward. The problem with Krugman's proposed solution is that if we force it to happen via the GSEs the debt doesn't get defaulted, it just moves onto the .gov balance sheet. We want to quick fix it? Not going to happen IMO. Bush and Clinton and allowing the forcing of what were fully functioning companies (Fannie/Freddy) into taking on loans that had no business being made screwed things up. If we want to fix this moving forward I believe that a certain % of every mortgage made needs to stay on the originating banks balance sheet and we need to get back to sound standards in mortgage lending. Yes. This will mean people will need to save that 20% down for their house. Yes. It will crush the housing market for a while. I belive at the end of that path we find sustainable growth. what would the consequences of this for the consumer credit market? It will shrink or grow according to demand, like any other service in a free market. (semi-free? :
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