do you realize how fucking stupid that is?

Still, she doesn't understand the heart of the problem.

You have the talent to twist and  mutilate. You could also become one of those TV analyst.

Hilary's statement suggested freezing sub-prime mortgage rates on unscrupulous mortgage lending not the discount or prime rate.

Dubya wants to take this opportunity to give more money to his corporate pals.

Pathetic

I rembember how well that strategy worked for him.

What would be Jimmy Carters strategy?

Care to share?

I guess she'll need to check with Tricky Dick instead.

An idiot is an idiot, I don't care which party they're from. BTW Carter is still an idiot, he just wasn't the idiot responsible for wage and price controls. My apoplogies.

Mortgage rate freeze on convoluted sub prime is not same as wage and price control of the Nixon era.

The amount of whacky adjustable sub prime rate mortgages out there are enormous and if left unchecked the real estate market will tank. Lenders will foreclose, and there will be lots of properties out there without any buyers and that is the economic problem.

Can't tie the two even if you hate Hilary with a passion. Bareback wants to give $250 rebate that is like putting chewing gum stop a leak in Hoover dam.

Dubya wants to give every individual $800 and businesses tax breaks result in deficit as wide as Grand Canyon. What happened to the Fiscal responsibility of repukes?

Tax breaks are within the scope of what government does. Government interference in a legal contract/s between an idividual and a lender most definitely does not fall into the scope of the role of government.

Can you imagine if you had a CD from your bank paying 5% and the government came in a ruled that the bank only had to pay you 4%? The is very little diference between the two scenarios. The govenment should not be in the business of voiding legally executed contracts.

As far as the fiscal responsiblity of Reps, it does seem like a distant memory since there was fiscal reponsibilty from either side of the aisle. Tax less and spend less, sounds like a great idea. Unfortunately the dems want to "tax more and spend more" the new breed of rep wants to "tax less, but still spend more. It doesn't sound like any conservatism that I recognize. On that point, I have to concur.

Robber barons of old days. If government let them do what they had agreed between themselves to happen, you wouldn't talking today.

Let the government do away with SEC, and FDIC, you will see how fast your money disappears. Let us also do away with civil courts.

You must have very short memory, there was fiscal responsibility when Clinton was the president. I am sure you will find way to dispute it. I am increasing your credit card interest rate 50%.

Clinton stood up to the pork barrel spending demands from Newt and company. Tax is like cost of goods, it can never be Zero like some rupukes would like you to believe.

By the way, freezing interest rate is not voiding a contract, far from it.

-- Modified on 1/19/2008 3:26:12 PM

We are talking about some of the largest financial institutions in the world, who entered into good faith, albeit high risk loans.

Freezing interest rates is indeed voiding a contract, voiding the terms basically voids the contract. If interest rates in general rise and the lenders are unable to pass those costs along, then the lender is being unfairly punished and the borrower is being rewarded for being stupid. I'm sorry, but we are not a socialist country, at least not yet.

You spoke of civil courts, I defy you to find a court in this land that won't agree that these are valid,legally enforceable contracts. The free market created this problem, it's up to the free market to solve it. I the emortage companies find that they cannot recapture their money by foreclosing on and subsequetially selling the underlying properties, they won't foreclose and they'll be forced to negotiate with their customers, with or without government meddling.

get what your saying

and NEVER ask, "what if they're mistaken?"  We're the largest financial institutions in the world, and we just never think of these things.

Just like you never realize that we became a socialist country when we substituted bankruptcy for debtors' prison.  Debtors' prison is so much more efficient at getting the money back, right?

You are missing the big picture.

You are correct when the big picture is tip of your nose.

By the way, one of the fundamental tenants of free market economics is Perfect Information. May be you can Google and find out what it is.

Ken Lay of Enron and Bernie Ebbers of World Com are nothing but modern day robber barons. They did it by manipulating the market with imperfect information.

In the case of sub-prime, lenders gave loans to people to whom they should not have, they took the risk in doing so. Now they want to foreclose on those people that put down whatever money they had and now the lenders want to take that away by foreclosing.

By the every court in this land will invalidate a contract if it is based on deception and many go to jail.

1000's of contracts have been invalidated for unfair lending practices, Fleet National Bank and Bank of America comes to mind as recently as the past 10 years.

And probably, a lot of the rest of us, stupid and smart alike.

Now, I have not thought through freezing rates completely, and I don't know if it's good or bad on balance, but I can see a few things immediately.

Due to the moral peril inherent to getting better returns, higher interest rates can certainly make the lenders and the buyers of mortgage securities dumber than the borrowers, which has happened here, BTW. The purportedly well-trained and responsible people took leave of their senses. Meanwhile, the consequences of that punish innocent bystanders, which is what we are seeing now, and we must try to limit.

You're example of a free market solution is strange considering what else you said. You mean the mortgage companies are going to award the stupid customers by coming to terms? I'm just noting that's some flexible justice there. The customers who went out the door first get screwed.

These subprime instruments are highly leveraged. It's possible the losses are in the trillions.  What if the mortgage companies are bankrupt and their assets liquidated? Is anyone going to want their litter, those non-performing mortgages? Isn't it better to take the assets at rock-bottom value and then sell them to somebody who could pay? Now some lucky people might get the deal that you describe. (They weren't smarter, they were just lucky.) I wouldn't count on it being frequent.

The market is a force of nature created by humankind. To say the market corrects anything is like saying Katrina corrected New Orleans. It did clear out the riff-raff.

At least I could at least see where the customers might have an excuse. Generally, all they wanted was the American Dream of their own house, which is something all of us want, and something our long-time flat wages and regular lay-offs couldn't give them. Also for thirty years, we haven't had an education system that gave them an understanding of simple math, much less the formulas mortgage agents threw at them.

The government can and does overrule contracts and strictly limits what's in them. Congress can certainly pass a law that overrules a part of a contract or even throw it out.

And for the longest time, interest rates were strictly limited under law, and people thought it was absolutely right. So what's conservative about not limiting interest rates? What's moderate about your point of view?

-- Modified on 1/20/2008 8:37:47 PM

The alternative, of course, was the Soviet Union. I don't know for sure, but I don't think that government needed taxes to operate, because it owned everything to begin with. Now that's statist.

I know you're not an anarchist, BK; you think the government does too much, is too inefficient and futile at all of it, and therefore taxes are too high. Reasonable POV. But most alternative opinions aren't statist. A government setting up a program does so ideally with the will of its people and runs it for the good of the people. That is not statist.

An unfortunate detail to all this is that the rights and welfare of the people are often set against the good of business interests. This is a serious problem in the modern age, and not one that is going to be settled in our lifetime. But we have to try.

" Congress can certainly pass a law that overrules a part of a contract or even throw it out."

Congress certainly cannot pass a law that retroactively voids part af a heretofore legal contract. Haven't you ever heard of that little document called the US constitution that specifically prohibits "ex post facto laws"?

"So what's conservative about not limiting interest rates?"

We are not talking about limiting interest rates, for many years the Fed has not set interest rates, the market has. the Fed has basiscally followed the market not the other way around. That aside, what you are talking about is voiding selective contracts not limiting overall interest rates.

It doesn't apply to contracts or civil cases. The key court case ruling on this was Calder v. Bull in 1798, which ruled that "the ex post facto provision of the Constitution applies solely to criminal cases, not civil cases." (Wikipedia, Calder v. Bull,) see also

http://www.michaelariens.com/ConLaw/cases/calder.htm

Congress certainly can limit interest rates, even in selective contracts. Just like it abolished debtors' prison-- which BTW, was done as an act of mercy during a depression in the 1840s, not for the fact that it was considered cruel and usual. It was considered neither.

About limiting interest rates overall, I made my argument that unregulated interest rates led to this mess. It's apparent that usury laws didn't just protect borrowers.
 

-- Modified on 1/22/2008 10:12:34 AM

You obviously don't remember the double digit interest rates of the 70-80's. This is like the dotcom bust. The kids and Johnnie come latelies to the market had never seen a bear market before. This is the same, there will be some casulties, but it's far from the end of the world. The worst thing that could happen, is for the government step in in and make a bad situation worse.

There are some doubts about that. There are government interventions that do work.

The interest rates I talked about were actually by lenders on the state level, then. The Federal Government hasn't itself limited interest rates.

I hope we just get a bear market and nothing worse.

Is very cyclical. It's part of a free arket economy, yes it looks gloomy today, but it will turno around, this is nothing new.

The lenders and the borrowers are equally guilty, left to their own devices, they will work it out. Will it be fair? Of course not, life isn't fair. As with everything else, there will be winners, and there will be losers.

The worst possibel thing would be for the goverment to interfere. There are rules to the game, and if investors don't believe that they can trust the "rules" at least to remain constant they will lose faith in the system and take their money elsewhere. That would be the worst case scenario.

...and it took a the Great Depression to make free market purists think again that time.

During the 1930s to the 1970s while while we had a "mixed economy," the country's economy didn't sink to 3rd world status, you know. It very well. And investors had confidence in the "rules" then. It seems to me that investors and their clients change the rules all the time. What they have been confident in is not the "rules" but in having the politicians fix the rules for them: conveniently.

A totally unabated "free" market interferes in government, rather than the other way around. I prefer the latter.

I can't see an unabated free market as being for the good of citizenry. You say first that the market will correct it. When it's point out that it's harsh and unfair, you say it's because life is unfair, and presumably harsh, but some people will win.  

I'm sorry, GG, I find no merit to these arguments.  

"I'm sorry, GG, I find no merit to these arguments."

I know you don't, but it doesn't make my arguments less true.

It's very easy to sit on the sidelines and critize everything from the players down to the officiating. You'd have a very different perspective if you actually got in the game.

There is a huge difference between participants changing the rules, and having Big Brother picking up little Johnnie, kissing his skinned knee and punishing the peole that actually drive the market and make it work.

BTW I also think that the changes in the bankruptcy laws favoring the credit card companies is at least as bad. Unsecured should mean unsecured. I try to be fair, two wrongs don't make a right. Rewarding unsecured creditors at the expense of secured lenders make no sense whatsoever.  

 

big enough and fluid enough, that individual transactions have no negligible impact.

But it breaks down at the extremes, where there is so much by-product that the environment changes.  Then the fundamentally cooperative aspect of any economy becomes important.

That's the reason big guys (Chrysler) get bailed out, and the reason for central banking, and the reason for bankruptcy.  At some point (and when is open to judgment) it makes more sense to get a guy back to work than try to pry another buck out of him.

The fact is, life isn't rational, and doesn't run by immutable rules, but judgment, whether it's good or bad.  

The reason for NOT changing the rules have more to do with a sense of predictability for the average guy, and that's very important.  But the guys running the show will always find a way to change the rules to line their pockets, or they wouldn't be running the show.

While I don't like the Democrats' pity party, I wish the fucken Republicans wouldn't make their rape party so fucking obvious.  A little technique goes a long way, I think.