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Bailouts and Blame

Bailouts and the Blame

Chief Flight Systems Engineer - Retired
Dept of Air Force
Fri Sep 26, 2008 9:09 AM

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After further research, I now know it was Congress and the Clinton Administration that caused this problem, by forcing Fannie Mae and Freddie Mac to provide low cost, high risk loans to low income people. Forcing these financial institutions to allow the following as valid income sources: overtime and part–time work, second jobs (including seasonal work), retirement and Social Security income, alimony, child support, Veterans Administration (VA) benefits, welfare payments, and unemployment benefits - is not sound business. The government should stay out of business.

Re: Bailouts and the Blame

HR Specialist
IRS
Fri Sep 26, 2008 10:06 AM
Sir, I will be retiring in the near future with a very generous Civil service Retirement System Pension . Are you saying that my Civil Service Pension should not be considered if and when I seek a mortgage ?

Re: Bailouts and the Blame

Specialist
Federal Agency
Fri Sep 26, 2008 10:41 AM
I find it interesting that after 8 years of this weak republican administration that you could point the blame on congress and the Clinton Administration. Personally, the fact that the Bush Administration has continually said we are not in a recession, ignoring the problem, more problems were created. Let's not make this a political issue when it is really not.

While the banks and lenders carry some blame, I personally believe that any idiot who borrowed money for a home loan and knew they would be strapped with monthly finances is to blame. It's time to go back to teaching people to balance their own budgets - that is not the government's job! Nor is it my responsibility as a citizen to pay for the idiotic decisions of those who bought and really could not afford to. Remember, credit is good but you still have to pay the bills. Look around on any given weekend and see the number of people at shopping malls with credit cards in hand! Wake up Americans!

Re: Bailouts and the Blame

IT Specialist
DOD
Fri Sep 26, 2008 12:25 PM
I can see why he could blame the Clinton Administration for this. It started in the Clinton Administration. Mortgage Companies were pressured to relax standards in giving out loans to people who could not pay. The Bush administrations tried numerous of times to reign in the out-of-control lending practices, but efforts were blocked by Democrats and Republicans, mostly by the Democrats in the Senate. There are plenty of internet articles explaining what happened here. Even President Clinton the last couple of days has stated that his own party stopped reforms during his administration and Bush's administration. Why do think there are not any hearings being demanded. It is because Congress knows they are dirty and culpable with this mess. Top Fannie and Freddie money takers were Senators Dodd, Obama, and Kerry. Follow the money and it takes you to Congress. It was John McCain in 2005 that warned his counterparts that a disaster was coming. It was ignored.

Re: Bailouts and the Blame

Watcher
Inner Sanctum
Fri Sep 26, 2008 12:26 PM
So, CFSE-RETIRED , you are saying you are a BAD RISK due to the fact you are a RETIRED individual? Correct? Must be.

Or, you are saying only RETIRED Republicans are not at risk.

Get real.

The blame is on the mortgage companies, the past 8 years of this Administration, and MAVERICKs that are against regulation and are out to de-reg, like that comic duo, DEREG and PITBULL RED.

and GREED, found in some of the finest GOP closets around.

Re: Bailouts and the Blame

Fed Peasant
DOD
Sun Sep 28, 2008 12:18 AM
Chief Flt Systems Engr - Ret Dept of Air Force:
You got a few things crystal clear & correct. You are missing big sections however, too numerous to list here. This is a more complex nightmare!!

Re: Bailouts and the Blame

Silly Servant
DoD
Mon Sep 29, 2008 10:07 AM
Yep, I'm one of those folks who could not afford a decent loan. After being unceremoniously RIF-ed from active duty during the anti-military Clinton administration, I took a job at about a half of my military pay. I bought a home that I should have NO WAY qualified for (I did NOT use my benefits because ANYTHING related to VA SUCKS). This was after the Clinton administration had relaxed a lot of the regulations in mortgages & banking. I qualified for the loan by working a second job and exaggerating my "worth". It was a crappy loan with a teaser rate that was to balloon in five years. I kept my nose to the grindstone, job-hopped my way around the working world (still working at my part time home-based business), and kept my debts low. Before the "balloon" was to inflate, I refinanced to a fixed LOWER rate, 15 year mortgage. Oh, and somewhere in the process, I took another $20K cut in pay for the honor of working as a DoD civil servant. So there's plenty of blame to go around, get it?

Something needs to be done

Program Analyst
OPM
Fri Sep 26, 2008 9:19 AM

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Regardless of who is to blame, Congress and the Administration need to do something. Perhaps they can negotiate the 700 billion dollars down to something that will make everyone happy. They should not wait for the next President to clean this up.

Why not blame the borrowers?

Editor
DoD
Fri Sep 26, 2008 9:22 AM

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Hardly any of the survey responses address the fact that many of these borrowers are responsible for this mess! When my family went to buy a house five years ago, we had done our homework. We realized how much equity we had in our current home, figured out how much of a down payment we'd need, and bought a house WITHIN OUR MEANS at a reasonable rate. I know so many who bought a house under an adjustable mortgage rate - which, unless you KNOW you're going to be making more money in the future is, I'm sorry, just stupid. Others bought way more home than they could afford. Yes, lenders probably duped them, but if you don't have a firm idea what your budget is before you go house hunting, you are also largely responsible if your home then goes into foreclosure ... that's the harsh truth of the situation.

Re: Why not blame the borrowers?

Clerk
DOI
Fri Sep 26, 2008 9:47 AM
I totally agree. It's a matter of personal responsibility. A lender can only rope one into a shady mortgage deal if one is irresponsible enough to sign the contract.

Like you, I flat refused to mortgage myself up to eyeballs for a particular house, when I could (and did) find a nicer one for thousands less than most were priced in my area.

Re: Why not blame the borrowers?

Specialist
Federal Agency
Fri Sep 26, 2008 10:49 AM
I fully agree...

I believe we each must be fiscally responsible for our ownselves. It's not the government's job nor the taxpayers responsibility to take care of you.

Placing Blame

Manager
FAA
Fri Sep 26, 2008 9:23 AM

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I think it is interesting that some folks blame the Bush Administartion for these problems. This was caused initially buy acts of the government in 1999 (hint Bill Clinton was president).

There is some blame to be had by the lending companies but the largest blame should fall on the irresponsible borrowers. They bought more than they could afford and most of them did it knowing it could end badly. What ever has happened to personally responsibility. We need to take the responsibility for our actions both good and bad. Our country has changed to trying to find someone else to blame for our own mistakes.

Have some personal accountability and stop blaming everyone else.

Re: Placing Blame

ATCS
FAA
Sat Sep 27, 2008 8:36 AM
FAA Manager
Personal responsibility, that's hilarious coming from a FAA supervisor, "safety was never compromised"

Re: Placing Blame

analyst
dod
Sat Sep 27, 2008 11:29 AM
ATCS, what's your quote got to do with the current financial situation? We appreciate your comment but please give us something that's relevant.

Federal Reserve System at fault

Chief Land Resources Program Center-SERO
DOI/National Park Service
Fri Sep 26, 2008 9:23 AM

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We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market's attempt to re-establish rational pricing of houses and other assets.

We are told that "low interest rates" led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments - investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support.

Check out the Glass-Stegall repeal of 1999

Security Specialist
Army
Fri Sep 26, 2008 9:26 AM

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This started with the CLINTON administration!
On November 13, 1999, President Clinton signed into effect a "sweeping overhaul of the Depression-era banking laws" The measure lifts barriers in the industry and allows banks, securities firms and insurance companies to merge and sell each other's products.

Lehman Brothers got a taste of Glass-Stegall on Sunday 14 Sept 2008. Their demise after 156 years is a direct result.

Re: Check out the Glass-Stegall repeal of 1999

Mr Big Stuff
Bureaucracy
Fri Sep 26, 2008 9:45 AM
Wasn't the repeal of the G-S act introduced by Republican Senator Phil Gramm of Texas?

Bail Out

employee
VHA
Fri Sep 26, 2008 9:26 AM

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I am against the Bail Out. My question is how long does the bail out prevent the onset of recession? The economy runs in cycles. Will we eventually have a recession regardless? Are we just putting it off?

An yes, Iam with many Americans. Why do help these companies? Why not help the citizens that they have broke the backs of? Yea we can say it is the fault of the people who took out the loans but... come on I think they we snuckered. Yea ago my husband and refinanced our home with a floating balance. I changed that in a hurry once I figured it out. We are not all market or finance genuises. These companies snuckered thsese people just like my husband and I were snuckered.

Let the companies suffer their peril.

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