And the bail out goes right in to the toilet

[Lady's Human]

Durnit, I forgot the mandatory

[smokey the elder]

There is a high fear factor in the credit markets now, the way I see it (strictly lay observation.) No one wants to lend money at all, because all proper risk assessment has gone right out the window! The LIBOR low-risk short-term loans that are the "lube" of the economy aren't being made, so the economy is "stuck". Money exists; it's just not moving. Closest model: Japan in the 1990s. (Thanks, Robert Krulwich for making this simple enough for a scientist to understand!)

Is the "fear factor" justified, or part of a self-fulfilling prophecy? Just an example, in June we KNEW that oil was going to $150 a barrel....and it did, almost. But, then it came down, because it was apparently unsustainable.

Now the government, led by W, "KNOWS" that we'll enter the next Great Depression if they don't "bail" us out (I think that's a lousy term, btw).

Just FWIW, W "KNEW" there were WMDs in Iraq...interpret that as you will.

[Puckstop31]

No one wants to lend money at all, because all proper risk assessment has gone right out the window!

Yes, because they were MANDATED to give 'bad' loans, by Congress.

Money exists; it's just not moving.

Yes. The fat cats think that they can get a better return on their investment if they wait until the bad loans are 'bailed" out.

Now the government, led by W, "KNOWS" that we'll enter the next Great Depression if they don't "bail" us out (I think that's a lousy term, btw).

Just FWIW, W "KNEW" there were WMDs in Iraq...interpret that as you will.

All the more reason the 'bail out' should not be done. We are ALL going to take it on a chin a bit however.

[Grace]

In the latest issue of NEWSWEEK there is an article explaining how this financial mess happened. I've read it once, and plan to read it again and again - maybe then I'll better understand it all.

In case anyone is interested - HERE is a link.

[RICHARD]

From what I understand, which are a few hand gestures and the labels on Top Ramen, is that back in the late 90's the admin at that time saw a disparity regarding the numbers of MINORITY home buyers/owners.

The pres encouraged lenders to approvel loans with little or no downs and the balloon payments to follow.

The industry has been in free falll for the last 2.5 years. THe mortgage/title/bank industry are mostly to blame for this. They lent out tons of money and they were riding the horse to the river while everyone else walked.

In 99 I worked for a title company who had offices all across the So Cal. 35-40? It was a huge operation and the money was there.

The place where it went wrong was the greed and the lax rules that everyone operated by. The amount of money made, wasted and just thrown away was incredible.

A title/mortgage office would open up and the people running the office were given carte blanche to buy some of the silliest office supplies on the planet.

Why settle for plain BIC stick pens when you can order pens that are engraved with your name and phone?

I threw out about 50 thousand business cards all told.

At one office they had just delivered a 3,000 card order and the office closed a few days later!

Reps were stealing customer files and doing deals outside of the company's business.

Reps were quitting and stealing files when they moved on.

IT got to the point where a person was sent to a soon to be closed office, without warning, with a pair of bolt cutters and a note.The evening before the whole office data base would be run and saved at the main office, Then the 'Angel of Death would give the note to the office manager and go to the back room and cut the phone/computer lines to keep the people in the office from deleting files and taking them off site.

There was HUGE MONEY TO be made-people closed deals, made some serious green and said EFF IT!

Money was lent out to foreigners who spoke little or no English and sometimes had their teen agers who spoke better English than the parents would try to explaing what they were signing. There were other reports of people buying homes with no paperwork or any proof of income. Applications were submitted
and if they were denied, a new loan app would come back later in the day with 'new' info on the form.

That was the way it was. I worked for about 6 months total across the year closing escrow offices and had I been paying attention to what I was working with there would have been a chance to help people out keep their homes without screwing them and making honest money on the side.


What a shame that we have hit this low.