The Free Market Debate

[itstippy]

I've asked these questions before, and searched all over the Web, and I just cannot find the answers:

Who is holding the underlying toxic non-agency Mortgage Backed Securities? Have they been written down to reflect reality (worth about 20 cents on the dollar), or are they still marked to fantasy (worth 100 cents on the dollar)?

The Fed holds $1 trillion in Fannie/Freddie-backed MBS ("agency-backed"). Those are a much better grade of garbage than the highly toxic stuff, because the US Treasury is on the hook for any losses. The Fed could actually sell these securities in the open market should it choose to do so, and find eager buyers.

Who holds the rest of the stuff? Who takes the haircut on their holdings when mortgages get legally and officially written down by 30%-50%?

The big banks have been fighting like He## to avoid writing down the principle of underwater mortgages. That leads me to believe that they still hold them, and are still marking them to fantasy on their books. They claim they packaged those suckers up and sold them off to institutional investors like hedge funds, insurance companies, pension funds, sovereign wealth funds, etc. If so, then why do they care if the underlying mortgages get modified? They'd be the ones doing the modifications and collecting the fees - you'd think they'd be thrilled with the plan.

Unless they're being less than honest, and they actually have boatloads of this toxic crap still sitting around in their Structured Investment Vehicles that they haven't gotten around to dealing with yet.

[vl]

Only when the liberals got involved with wanting everyone to own a home did the mortgage lenders take advantage of everything.

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3887&page=2#ixzz1Fp7JnYDO

That came AFTER the banks insisted on Private Mortgage Insurance (PMI) and the exclusive ability to lend up to 90%. When I first started in mortgages, we were capped at 90% because average ForEx and quick sale values combined to offset more than 10%. My 90 was a first and junior lien combo and a whole lot of investor-protecting criteria. Banks diverted from true Risk assessment to assembly-line production AND cut rates. Throughout my career, America bailed banks 3 times for the same reason while non-banks compressed but never failed.

"OK and along those same lines during that 5 year period we are doing credit repair so when they go to reset after 5 years their credit has been reasonably repaired and they can qualify!"

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3887&page=2#ixzz1Fp8cy7Jp

Yes. Over 5 years, the ratio of interest to principle reduction will favor principle after 3 years. During that same time, native household income(s) will rise and the education will generate management skills. So, after the first 5-year remedy a major chunk of debt will settle, financial health will improve and the borrower would have continued to maintain the property... three things the current method doesn't do. Extraneous costs-- zero or even a surplus. Buying power will revive in cash after the 1st year. Florida benefits greatly! I'm curious Frank, anyone from the old IMC involved in your plan?

QUALIFICATION: you have to know the difference between chronic and circumstantial blemishes on the report and lending criteria that controls Risk . 5 years into this remedy plan, these borrowers are mighty prime pickings for next-level credit and financial products.

[vl]

You are fully wrong about your take on the top 10% supporting everyone else. If there was a cap on taxes arrived at by a cut-off on income and a standing rule that- once the income-to-taxes cap was met, the person got the rest of the year off... a whole lot of people would race for it just once, realize they cannot stay out of the game that long and cut their own income to remain viable without gaps. That alone would eliminate a huge part of the bottom because necessary jobs, opportunities and bandwidth (as opposed to vertically) would open up. It is far better to cap the income gap and broaden the sources of tax revenue than to condense it and have that group A) complain ad nauseum, and B) set the nation up for failure as a two class system. I'd rather have hundreds of classes comprising the masses instead of a few exceedingly wealthy asses controlling the outcome every time.

[comokate]

Mar 6, 2011 8:22:10 GMT -5 @wxyz said:

Nice quote Kate, I dont know your situation, but spoken like one that pays no taxes. Last time I looked it was all the evil, sociopathic-like, people at the top (top 10%) that supported all the massive base at the bottom, legal or illegal. Not being snide, but it is exactly your mind set that is the current problem in this country.

It is thinking like that that makes me wonder about the future of this country. Yes sexist, I know, (rolling eyes) but your last post is typical female thinking. It is your own mind set multiplied many times that has created the situation we are in right now.

"spciopathic-like" Gee, "cant we all just get along". The mentality in your posts is rampant in our schools and educational establishment, and we all know what type of a success our schools have been in the past twenty years since this type of feel good blather has taken hold.

I'm truly sick of personal attacks. Truly sick of it. Back off. Seriously. There is no "typical female thinking" , and your use of my gender as an attempt to discredit me is clearly grasping for straws.
I pay a lot in taxes. Over three thousand dollars a year in property taxes alone for a very small home. That does not include personal state income, nor federal income tax. I am a high income earner who's hours were involuntarily cut due to the economic climate in my state. I still work *and* I'm paying my own tuition on my way to a new degree.
Your active imagination, snarky comments, and misinformation "don't make it so".

[Tesla_DC-meme]

A sociopath-like disregard for the human beings that live within your own society, for the massive base of people who support the few at the top, never ends well , never will...

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3887&page=1#ixzz1FqKoDsRd

Your statement rings of hypocrisy.

Sociopaths are after all human beings that live within your own society.
You choose to demonize this type of person and project all of your disdain upon them while victimizing this board with your egocentric rantings.

We all know that sociopaths can exhibit destructive behaviors and tendencies. So can alcoholics, addicts, kleptomaniacs and hypocrites.

[comokate]

Mar 6, 2011 13:10:00 GMT -5 Tesla_DC-meme said:

A sociopath-like disregard for the human beings that live within your own society, for the massive base of people who support the few at the top, never ends well , never will...

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3887&page=1#ixzz1FqKoDsRd

Your statement rings of hypocrisy.

Sociopaths are after all human beings that live within your own society.
You choose to demonize this type of person and project all of your disdain upon them while victimizing this board with your egocentric rantings.

We all know that sociopaths can exhibit destructive behaviors and tendencies. So can alcoholics, addicts, kleptomaniacs and hypocrites.

Egocentric rantings? Victimizing the board? Pretty strong accusations.
Are you suggesting I'm not welcome to post here?
I'm all for Proboards taking a look at the behavior here. I'll also publicly stand by all of my posts. All of them. I don't post won't I wont own in the non-digital world.
And are you truly defending the sociopaths of society now? You should contact Dr. Robert Hare regarding that idea.

[comokate]

Mar 6, 2011 13:21:14 GMT -5 @wxyz said:

Yes you are truly sick of all the personal attacks. At the same time you demonize whole groups of people by calling them like sociopaths. but than again, you are one of the enlightened ones that want to tell everyone else what to do and how they should live their lives.

Have you ever owned a business?
Do you even invest?
Have you ever had to make a payroll?

I dont think so, from your comments you have no clue. I have to agree with others from prior posts, I don't really know why you spend all day on an investing board. Perhaps I could recommend a good Socialist board to you so you can get away from all the sociopaths.

You are way out of line.

[neohguy]

Mar 6, 2011 14:09:27 GMT -5 @wxyz said:

One last comment. Since I m sure it is coming next. Before you call me a sexist, I am all for women or men being able to do any type of work, schooling or anything else they want to do and are able to meet a minimum standard to do. I am a libertarian. My daughter is a police officer and I strongly encouraged her to do it.

When I use the term feminization of our culture I am talking about one sex mandating that both sexes exhibit the behavior and thinking characteristics that are genetically inherent in that sex. GASP, yes, I do actually believe that there is genetically based behavior traits and thinking and intellectual traits that are based on sex.

Wow wxyz. I'm not aware of any sex mandating that both sex's exibit the same behavior. The male sex will generally exibit sociopathic behavior without the influence of wise women. The wild west mining towns were pretty much inhabited by men, with the exception of whore houses. They pretty much spent their free time drinking themselves to death, killing each other over gambling debts, and spending what they had left over in the brothels.
Wise women then arrived and married these guys and rightfully convinced them that the community would be better off without gun fights in the streets and that it wouldn't be a bad idea if we bathed occasionally. After we sobered up we agreed. I suppose great great grand pappy wxyz lamented about the feminizing of the town when he was forced to shut down his brothel that specialized in procuring 13 yo prostitutes but most everybody else agreed that it was a good idea to eliminate that business.
I don't consider John L Lewis to have been the feminine type but his movement pretty much stopped sociopathic behavior of the coal mine owners. Do you consider that to be feminizing the coal industry?
Your thoughts about feminizing our culture are strange to say the least. Both genders have traits that contribute to society. People that brush people as liberal or conservative are also ridiculous. I'm guessing that 80% of the poulation have positions that are both.

[verrip1]

Mar 6, 2011 13:24:18 GMT -5 @comokate said:

You are way out of line.

So. Who died and made you the queen of the board?

If you took your own advise, you'd stop the continuing personal attacks on everybody who has a different opinion than yours.

[vl]

What's up, guys? You seem to work in groups (like thugs) and expect "conversation" after that? Move on. These boards aren't for you.

Have an opinion. Learn how to debate (point and counterpoint). Keep it intelligent. Kate... it should occur to a veteran MT poster like you that we saw some significant seesaw activity last week. You know what... that tends to indicate that the "sure thing" bull run, isn't so any longer. These guys are mighty sensitive and their massive bloated outrageously over-inflated disproportionate egos are easily bruised.

[itstippy]

Getting back to the original post's Free Market Debate, we see that a primary assumption of the linked article is:

"Allocating resources by the free play of supply and demand is the single economic system compatible with the requirements of a free society, and also the most productive and efficient supplier of human needs."

"The most efficient supplier of human needs" is an assumption. With a Free Market Economy we supply both the Sports Illustrated Swimsuit Issue and the US Magazine Celebrity Divorce Issue. Both are targeted at different demographics (please let's not go there), so we're getting diversity of supply. Score one for the Free Market. But both are less than essential human needs, and we have hungry people in this country, so Free Market is maybe not 100% efficient.

I live in Wisconsin and all winter I've been enjoying fresh fruit in my sugar free Jell-O. Somebody is shipping bananas all the way to Wisconsin in the dead of winter for 60 cents a pound. I like bananas, but it's a ridiculous waste of resources to ship them to Wisconsin in the dead of winter just so I can enjoy my sugar free Jell-O that much more. I should be eating locally produced applesauce that was put up in reusable jars last fall.

I'm going to keep right on eating the damned bananas though. Now that I've thought about the true cost of them in human terms and in hurt on the environment I won't enjoy them as much. I'm not making some banana boatmen and over-the-road banana truck drivers wealthy by buying 60 cent a pound bananas.

[Virgil Showlion]

And here we go with "bananas in my jello" capital allocation parable again. Third time this week I've heard it.

[vl]

Until you find out that those bananas were radiated to keep them fresher and grown from genetically-altered seeds with untested long-term aspects like making your right eyeball dry up and fall out.

Then you'll can your own applesauce. I'll be the guy selling eye patches.

[neohguy]

I agree itstippy. Medaille's brings up the following point:

"The gargantuan structures of economic liberalism are becoming increasingly unstable and will not last long. The true task of conservatives will be to rebuild the economy from the ground up, the only real way a stable economy can be built. We will need to look around our communities to see what problems can be solved by local resources and in absence of government and corporate “supports,” and what problems will require trade with our nearest or more distant neighbors. But mostly, we must be true to our values and not succumb to the arguments of liberalism, even (or especially) a liberalism that masquerades as “conservative.”


Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3887&page=1#ixzz1FrLL4IxR"


There was a time when ne Ohio was considered the greenhouse capitol of the world. There were literally thousands of acres under glass that provided tomato, peppers, cucumber, and greens during the winter. The price was affordable too. More expensive than the summer but still affordable. Most of those farmers sold the land to developers during the urban sprawl McMansion boom.
Tomato is still available due to better shipping methods but did we give up some of our independence? I go to the store today and they have strawberry available. Unheard of back then.
I've sold a lot of used boilers over the years to a Canadian broker that resells them to Canada's greenhouse industry (the new greenhouse capitol).

[texasredneck]

First off banana plants are not started from seeds. 2nd. seems that free markets work well because they are so abundant were they are grown this time of year they are worth little in there country of origin. They sent them to Wisconsin because you pay 60 cents a pound. In Texas we only pay 49 cents a pound.

[itstippy]

Egad, who's been using my "bananas in my sugar free Jell-O" capital allocation parable? Third time this week?!? I thought I was being fresh & original. Turns out I'm synthetic and probably irradiated.

Free Market Capitalism will still rule when the banana supply routes are blocked by starving hordes of militant former postal clerks and the alternate routes are pillaged by roving bands of survivalist guerrillas. Canning jars will go way up in value for a time, and then some enterprising soul will figure out a way to fashion them out of used Ice Mountain water bottles and the market for them will collapse.

[Tesla_DC-meme]

WE the people need to turn it into a MORAL Capitalism. Consumers control 60-70% of the market place. Nothing speaks as loud as dollars.

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Well put Professor Hamburger.

One of the greatest freedoms that the consumer / patriot enjoys is freedom of choice. Buy what you want, when you want, as much as you want. Buy local, cage free, organic, inorganic, import, domestic, fair trade, no fair trade, cruelty free or cruelty assured.

Consumers can move the market...
(once the media tells them that they should).
Freedoms are squandered by those that don't appreciate their cost or their power.



ps I love the "bananas in my jello" capital allocation parable.

[frankq]

"As for your perspective on corporate vs. individual welfare, frank... individual welfare makes a consumer with modest liability. "

I didn't make a statement regarding corporate welfare V.L. Read the post again.

[itstippy]

It falls apart if the products are totally unregulated for quality and truth in labeling though. Throw in the inability to sue or even figure out how or who to sue and you get cynical.

It sucks to find out the "AAA" securities in your pension fund are really "ZZZ", your car's a rolling tomb, the 30-year premium roofing shingles you bought are made of cardboard and spit, your "fresh" bananas are genetically modified nuclear pile core rods, and there's nowhere to get satisfaction.

[frankq]

Mar 6, 2011 16:45:12 GMT -5 @vl said:

What's up, guys? You seem to work in groups (like thugs) and expect "conversation" after that? Move on. These boards aren't for you.

Have an opinion. Learn how to debate (point and counterpoint). Keep it intelligent. Kate... it should occur to a veteran MT poster like you that we saw some significant seesaw activity last week. You know what... that tends to indicate that the "sure thing" bull run, isn't so any longer. These guys are mighty sensitive and their massive bloated outrageously over-inflated disproportionate egos are easily bruised.

That's where you're wrong V.L. Lets see, you want to eliminate banks, corporations, oil companies and Wall Street. And we should all ride bikes to work. Sounds like you might be on the wrong board.

[frankq]

"I pay a lot in taxes. Over three thousand dollars a year in property taxes alone for a very small home. That does not include personal state income, nor federal income tax."

I wish I only paid 3 grand. I wish I only paid 3 grand in each installment!

[frankq]

"The wild west mining towns were pretty much inhabited by men, with the exception of whore houses. They pretty much spent their free time drinking themselves to death, killing each other over gambling debts, and spending what they had left over in the brothels."

Ahhhhh....The good old days......A man just can't have fun anymore....

[frankq]

K4wxyz!

[frankq]

wxyz,

If it were up to some of these guys, on top of all of that, and they would tell you how much you could pay yourself too!

[Tesla_DC-meme]

But.....wtf, us sociopathic people just dont do our part at all. It is all me, me, me, take, take take.

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3887&page=3#ixzz1FroFxZ8a

Capitol puts it's ass on the line.

• absorbs losses
  
• supports workers
  
• provides leadership to our society
  
• pays taxes knowing all too well where it is all going
  
• (place holder for Virgil's list starting point)
  

[itstippy]

Geez WXYZ, get with the program. You don't run a business that way.

Sell the business to a private equity investment firm or hedge fund for an inflated price. They contract you for 3 years as a "consultant" to maintain "continuity of operation". There's your pile of dough.

The private equity firm is a master of making businesses appear highly profitable. They don't know shit about running the place, but they can sure run the books. They leverage every last dime they can, based on past performance and future projections. The borrowed money is made to look like profits. The private equity firm soaks up all this money among themselves (kicking some of it back to you, since you're part of the deal), then takes the firm public in an IPO through Goldman Sacks. At this point you're out, but you have a fortune.

Investors fall all over themselves to get in on the IPO of this super-profitable business recommended by Goldman Sacks. The issue sells extremely well. The private equity firm makes a killing, as does Goldman Sacks.

Five years later the company is completely different than when you owned it. Your former best employees are gone, replaced by MBA's and marketing majors. Your former loyal customers are gone, no longer interested in the now-mediocre products the company provides. The product line is made in China and the only thing of value left of the old company is the brand name.

Why are you beating your head against the wall? Electrolux - the brand trusted by Americans for generations!

[frankq]

Gee kate, you want an ice pack or something?

[kman]

Q, I need your advise...let's take a walk

[verrip1]

Mar 6, 2011 19:46:50 GMT -5 frankq said:

Gee kate, you want an ice pack or something?

No, it appears she relishes assigning attributes to others, but is intolerant when others do the same back.

Some people have such weaknesses.

[Tesla_DC-meme]

And like all evil business sociopaths, I went out and located equal or better jobs for every employee that worked for me (not a single employee missed a single day of work in the transition) and handed "thank you" bonus to every employee equal to one year pay. (all my employees were very long term and very loyal since I allowed them to job share, etc, way before those types of work arrangements were common)

You monster.