The banking industry knew what they were doing and knew what it would lead to.. so.. why did they do it? why do we allow

[dahunan]

They all knew.. and now WE have to bail them out

Countrywide President and CEO received 9 million and 10 million each after BOA finished the buyout.. WTF WTF WTF .. these people architected the US Recession right now .. and they are fucking rewarded...

Why do we continue to allow these robber barons to fuck this country all the time..

Remember the Junk Bonds.. Look up a special Sonofabush .. and how much he cost AMERICA .. yet.. served no jail time and is still finding way to fuck the american taxpayers

 

[senseamp]

They did it because they knew we "have to" bail them out, which I don't think we do.

 

[Exterous]

They knew they could do it and get rich and not have to worry about repercussions?

 

[brandonb]

Because they can, because nobody will do a damn thing about it. We are all pacifist who let criminals and thieves steal our money and screw us over and our children. Why would we care? We can still drink our 6 pack and watch football on Sunday.

The answer is this, nobody has balls anymore. We rely on elected officials to keep us safe, but they are just as criminal as everybody else. Therefore the responsibility goes to the people, and everybody just looks around exepcting someone else to act.

When was the last time someone was assassinated to keep these people in check? We just cry, and bend over to take another round in the pooper.

 

[ModerateRepZero]

I found this fortune article insightful on the subject of Wall Street behavior and its contribution to the financial crisis:

http://money.cnn.com/2008/03/3...postversion=2008040112

The fortune article says that the way Wall Street operates with regards to trading, leverage, and the pay system (the last of which, in the article's view, encourages huge risk taking) contributed to the financial meltdown we know as the subprime mortgage crisis.

Your comment actually has two dimensions....the culpability of the financial/banking industry to the current economic recession, and also CEO pay.

The article answers (partially if not completely) why Wall Street would engage in such risky behavior that would contribute to problems like the subprime mortgage one. As to the question of CEO pay/compensation, that would be because the board of directors, which usually set the compensation iirc, don't have enough incentive NOT to rig the compensation game in their favor.

And sadly as long as public officials continue to place financial stability as a supreme necessity, we'll have to bailout companies and in the process focusing less if not outright ignoring the investors or average citizen.

 

[Farang]

Originally posted by: brandonb
Because they can, because nobody will do a damn thing about it. We are all pacifist who let criminals and thieves steal our money and screw us over and our children. Why would we care? We can still drink our 6 pack and watch football on Sunday.

The answer is this, nobody has balls anymore. We rely on elected officials to keep us safe, but they are just as criminal as everybody else. Therefore the responsibility goes to the people, and everybody just looks around exepcting someone else to act.

When was the last time someone was assassinated to keep these people in check? We just cry, and bend over to take another round in the pooper.

An advocate of assassination.. I look at you like a rare animal in the zoo. I won't provoke you but it is interesting to watch.

 

[dahunan]

Originally posted by: Farang

Originally posted by: brandonb
Because they can, because nobody will do a damn thing about it. We are all pacifist who let criminals and thieves steal our money and screw us over and our children. Why would we care? We can still drink our 6 pack and watch football on Sunday.

The answer is this, nobody has balls anymore. We rely on elected officials to keep us safe, but they are just as criminal as everybody else. Therefore the responsibility goes to the people, and everybody just looks around exepcting someone else to act.

When was the last time someone was assassinated to keep these people in check? We just cry, and bend over to take another round in the pooper.

An advocate of assassination.. I look at you like a rare animal in the zoo. I won't provoke you but it is interesting to watch.

Look at people like the Enron officials who didn't give a damn about the HUMANS in California during the faked energy crisis.. what punishment came to them... they were true psychopaths.. as are most high level businessmen.. those people would send your children off to DIE if it meant more PROFITS

I guess you would rather let them do whatever they want to do ... and worry about the boogeymen your govt tells you to worry about.

 

[blackangst1]

First of all. The reasons these sub-prime mortages went bad is...well...the people who signed the contracts failed to pay. Sure, *some* responsibility lies in the mortgage officers (certainly not David Sambol), but the fact that consumers dont have the foresight nor the responsibility to pay their bills on time, well. Now WE pay for it.

Do you have ANY idea whatsoever how officer contracts work in the corporate world? Nevermind. Apperantly you dont. Read up sparky. Also, David Sambol had been with Countrywide for 20 years, and had a VERY succesful career. So he wasnt just slid into the contract. Do a little research.
Another thing I'd like to point out is the types of mortgages that went bad have been around for 30+ years. They werent some ponzi scheme thought up recently.

So many people have no idea what theyre talking about, including the OP for even posting this thread. And no. I dont think taxpayers SHOULD have to pay to bail these companies out, but the fact is, if we dont, the financial consequences if they all are allowed to crumble would make this event look like the lottery.

 

[babylon5]

And that is why history will repeat itself again in future.

 

[ModerateRepZero]

Maybe I'm just tired but I don't understand your ranting about subprime mortgage holders....yes they shouldn't have been offered such loans without having the means to pay (and sure enough most of them couldn't), but we're talking about the macro aspect about the financial or banking industry's culpability. And they share the blame for the meltdown for their involvement on sub-prime mortgage-related activity.

While the OP might not have chosen a suitable pinta, he does however make a legitimate gripe about CEO compensation and the rare CEO whose pay is linked to performance. Here's a NYT article about CEO compensation:
http://www.nytimes.com/2008/04...ewanted=1&ref=business

I dont think taxpayers SHOULD have to pay to bail these companies out, but the fact is, if we dont, the financial consequences if they all are allowed to crumble would make this event look like the lottery.

Almost no one other than anarchists would cheer at an unstable market, but I don't like bailing out companies who made mistakes out of greed or ineptitude. You don't have to be a fiscal conservative to see that having a safety net for these companies does nothing to encourage them to alter the risky behavior which led to the crisis to begin with and will likely lead to another one.

*edit* fixed quote xml code

 

[nergee]

Wachovia still advertises pay option mortgages. There is no risk of business failure for them in less than sound lending as
they know the taxpayer will pick up the tab for any losses.....

wachovia

 

[blackangst1]

Originally posted by: ModerateRepZero
Maybe I'm just tired but I don't understand your ranting about subprime mortgage holders....yes they shouldn't have been offered such loans without having the means to pay (and sure enough most of them couldn't), but we're talking about the macro aspect about the financial or banking industry's culpability. And they share the blame for the meltdown for their involvement on sub-prime mortgage-related activity.

While the OP might not have chosen a suitable pinta, he does however make a legitimate gripe about CEO compensation and the rare CEO whose pay is linked to performance. Here's a NYT article about CEO compensation:
http://www.nytimes.com/2008/04...ewanted=1&ref=business[

I dont think taxpayers SHOULD have to pay to bail these companies out, but the fact is, if we dont, the financial consequences if they all are allowed to crumble would make this event look like the lottery.

Almost no one other than anarchists would cheer at an unstable market, but I don't like bailing out companies who made mistakes out of greed or ineptitude. You don't have to be a fiscal conservative to see that having a safety net for these companies does nothing to encourage them to alter the risky behavior which led to the crisis to begin with and will likely lead to another one.

I agree 100%. But this isnt, and shouldnt be, am absolute. Many many companies fail and offer their shareholders nothing more than a pile of shit; however, this is different. In cases like these, we arent talking about macroeconomics. This IS a big deal, and a bailout, as unsavory as it is, is completely warranted.

 

[blackangst1]

Originally posted by: nergee
Wachovia still advertises pay option mortgages. There is no risk of business failure for them in less than sound lending as
they know the taxpayer will pick up the tab for any losses.....

wachovia

Yep. As do just about every other mortgage lender. These arent new products, and just because of the sub prime mortgage business took a dump doesnt mean they arent going to get rid of them.

 

[BansheeX]

Originally posted by: blackangst1
Another thing I'd like to point out is the types of mortgages that went bad have been around for 30+ years. They werent some ponzi scheme thought up recently.

While I agree that people who signed these contracts should have known what they were getting into and are totally responsible for the consequences (despite the intentionally confusing paperwork), and that freedom also means freedom to enter into stupid contracts you can't afford, I'm not terribly quick to absolve the scammer or he who incentivized and sustained the short-term success of his activities.

The existence of shady lenders and their non-standard loans have existed for a while, true, but they were never used at the frequency that they became used in the housing speculation bubble. So using existence as a defense only proves the point that the Federal Reserve's power to manipulate interest rates from where the market would realistically have them can do nothing but magnify once insignificant free market problems insomuch that centralized forces get the "event" they need to demand (and receive) more regulatory power. That isn't to say that this was all a brilliant engineering by the Fed to take more power. It could simply be the manifestation of the Fed's longtime flaw - that their policies are not driven by what's good for the economy, but rather by the political inconveniences of natural market corrections/slowdowns and the pressure being put on them to sustain Keynesian "growth" indefinitely until eventually world market forces overwhelm them. Remember, the Fed is a creature of congress and spendthrift politicians who need them to inflate, not the other way around.

The original poster is not an idiot. He's clearly remembering the last eight years and all the lip service that the Fed has been giving about the underlying soundness of the economy through this entire debt-binge mania, and people coming on the news before the crisis saying that "subprime is contained." I mean, the average American is just getting absolutely fooled by his own government, by his broker, by his lender. And that's their job. Like I said before, their job is to retain confidence in the market and spew propaganda, not to be honest. Look at the CPI and how far removed it's become from reality. It's propaganda, and thanks to the internet, people can go on youtube and see quite clearly, in retrospect, that they were blatantly lied to.

But brandonb is also right. No one has any balls when it comes to incrementally getting your savings debased. It just doesn't create a whole lot anger in people. Most just convince themselves that it's the fault of the "other" party or it was a personnel problem and we just need a millionaire lawyer politician who we can trust with these unconstitutional socialist controls Surely, Obama won't get his strings pulled. Surely, Hillary has no favors to return. Surely, McCain, not knowing anything about economics will get sage advice from his neo-con masters.

 

[Jhhnn]

Nice spin, Blackangst1. The sad truth is that most people aren't financial experts- they depend, to some degree or another, on the acumen of their lenders. For decades, people could depend on the idea that the likelihood that they could repay any mortgage they qualified for was very high. In watching out for their own interests, lenders also watched out for those of borrowers. Fast forward to 2006, when all that had gone out the window. Lenders had a whole new attitude, based on their ability to offload risk via securitization, and on the pie in the sky notion that prices and payments could keep climbing well in excess of the ability of borrowers to repay. Yeh, sure, securitization has also been around a long time, but various permutations are very recent developments. Somehow in the process, subprime ARM's came to be regarded as lower risk than conventional 30 year subprime mortgages, and the cost to consumers reflected that. How in the name of sweet freakin' Jebsu that happened is beyond my comprehension. It's obvious malarkey. Back in the 80's, when they first became legal, subprime arm's were more expensive than ordinary mortgages, because of the risk, and were mostly used in credit repair scenarios. they were also a very small % of the market. If the borrower could successfully meet the monthly obligations of the ARM, then it was obvious that they could meet the lesser monthly obligations of a 30 year fixed mortgage, and lenders were amenable to that when the mortgage was due to reset. ARM's were seldom securitized, either, but rather held by the lender as a nice high return investment. who'd been rather careful in their selection of borrowers...

And a lot of the behind the scenes financial dealings that made this all possible were only possible themselves because of serial deregulation of the financial industry, all in the name of "free markets"- remember? Now those advocates got what they wanted, and something extra, too, something they were depending on all along- It's called the Greenspan Put, and it's based on he idea that they're too big for us to allow them to fail, that the Fed will find a way to bail them out, or at least bail most of them out... basically, they're holding the whole economy hostage...

So I'll offer what is really a conservative idea, rather than the reactionary ideas that spawned the current crisis- that we need to return to the kind of regulations that existed prior to the Reagan era, to the regulations and concepts of the New Deal. Like them or not from an ideological standpoint, they worked, unlike the current scenario,which obviously doesn't...

 

[blackangst1]

Originally posted by: BansheeX
While I agree that people who signed these contracts should have known what they were getting into and are totally responsible for the consequences (despite the intentionally confusing paperwork), and that freedom also means freedom to enter into stupid contracts you can't afford, I'm not terribly quick to absolve the scammer or he who incentivized and sustained the short-term success of his activities.

Well, although there is a ton of paperwork in a mortage, the payment and interest rate disclosure couldnt be clearer.

The existence of shady lenders and their non-standard loans have existed for a while, true, but they were never used at the frequency that they became used in the housing speculation bubble. So using existence as a defense only proves the point that the Federal Reserve's power to manipulate interest rates from where the market would realistically have them can do nothing but magnify once insignificant free market problems insomuch that centralized forces get the "event" they need to demand (and receive) more regulatory power. That isn't to say that this was all a brilliant engineering by the Fed to take more power. It could simply be the manifestation of the Fed's longtime flaw - that their policies are not driven by what's good for the economy, but rather by the political inconveniences of natural market corrections/slowdowns and the pressure being put on them to "delay" them for another election until eventually, world market forces overwhelm them. Remember, the Fed is a creature of congress and spendthrift politicians who need them to inflate, not the other way around.

"Shady lenders" werent the only ones making risky loans. I worked for Wells Fargo, and we did sub prime paper every day of the week (back in the late 80's). I think the percentage of unscrupulous lenders is like the number of subprime loans that actually went bad-single digits. Thats speculation of course, but we have no way of knowing. Yes, their use has increased quite a bit in the last 15 years; however, Im not sure blaming the Fed is the right thing to do. More and more people live in excess. They drive cars they cant afford, buy TV's on credit, and generally spend money the same way our government does. On credit. Now, admittedly I am an anti-credit activist. I have zero debt at this moment, and the most Ive had in the last 10 years was about $700. And that was living through 3 layoffs. But when is the last time you saw an ad on TV that wasnt a lease payment? Its been YEARS. Its all about the monthly payment. And its all about people wanting more than they have, and not learning to live within their means. As I said before I *do* lay *some* blame on *some* lenders. But the bulk of the blame lies with consumers.

The original poster is not an idiot. He's clearly remembering the last eight years and all the lip service that the Fed has been giving about the underlying soundness of the economy through this entire debt-binge mania, and people coming on the news before the crisis saying that "subprime is contained." I mean, the average American is just getting absolutely fooled by his own government, by his broker, by his lender. And that's their job. Like I said before, their job is to retain confidence in the market and spew propaganda, not to be honest. Look at the CPI and how far removed it's become from reality. It's propaganda, and thanks to the internet, people can go on youtube and see quite clearly, in retrospect, that they were blatantly lied to.

OK maybe idiot is a harsh word. Naive is probably more accurate. Our economy IS sound. Do you have any idea the breadth and depth of the US's liquidity? It's staggering. Do you remember when congress passed bankruptcy reform in 2005? That bill was actually a final version that was presented to congress in 1997. At that time personal credit and bankruptcy was at an alarming high, and the government decided it was time to step in. So this "debt-binge" you speak of has growing for over a decade. Again, people like to blame Bush&Co, when in fact he had nothing but being in the wrong place at the wrong time syndrome.

But brandonb is also right. No one has any balls when it comes to incrementally getting your savings debased. It just doesn't create a whole lot anger in people. Most just convince themselves that it's the fault of the "other" party or it was a personnel problem and we just need a millionaire lawyer politician who we can trust with these unconstitutional socialist controls Surely, Obama won't get his strings pulled. Surely, Hillary has no favors to return. Surely, McCain, not knowing anything about economics will get sage advice from his neo-con masters.

Mostly agree.

 

[blackangst1]

Originally posted by: Jhhnn
Nice spin, Blackangst1. The sad truth is that most people aren't financial experts- they depend, to some degree or another, on the acumen of their lenders. For decades, people could depend on the idea that the likelihood that they could repay any mortgage they qualified for was very high. In watching out for their own interests, lenders also watched out for those of borrowers. Fast forward to 2006, when all that had gone out the window. Lenders had a whole new attitude, based on their ability to offload risk via securitization, and on the pie in the sky notion that prices and payments could keep climbing well in excess of the ability of borrowers to repay. Yeh, sure, securitization has also been around a long time, but various permutations are very recent developments. Somehow in the process, subprime ARM's came to be regarded as lower risk than conventional 30 year subprime mortgages, and the cost to consumers reflected that. How in the name of sweet freakin' Jebsu that happened is beyond my comprehension. It's obvious malarkey. Back in the 80's, when they first became legal, subprime arm's were more expensive than ordinary mortgages, because of the risk, and were mostly used in credit repair scenarios. they were also a very small % of the market. If the borrower could successfully meet the monthly obligations of the ARM, then it was obvious that they could meet the lesser monthly obligations of a 30 year fixed mortgage, and lenders were amenable to that when the mortgage was due to reset. ARM's were seldom securitized, either, but rather held by the lender as a nice high return investment. who'd been rather careful in their selection of borrowers...

And a lot of the behind the scenes financial dealings that made this all possible were only possible themselves because of serial deregulation of the financial industry, all in the name of "free markets"- remember? Now those advocates got what they wanted, and something extra, too, something they were depending on all along- It's called the Greenspan Put, and it's based on he idea that they're too big for us to allow them to fail, that the Fed will find a way to bail them out, or at least bail most of them out... basically, they're holding the whole economy hostage...

So I'll offer what is really a conservative idea, rather than the reactionary ideas that spawned the current crisis- that we need to return to the kind of regulations that existed prior to the Reagan era, to the regulations and concepts of the New Deal. Like them or not from an ideological standpoint, they worked, unlike the current scenario,which obviously doesn't...

No spin at all. It is what it is. I agree to a point about deregulation; however, the crime isnt that people couldnt afford mortgages. The crime lies in those who were allowed to lend to them. That I think we agree on. Did deregulation cause that? *shrug* Could be. But I still dont absolve a consumer from reading a very clear disclosure page on a debt they sign for 30 years.

 

[Jhhnn]

From Blackangst1-

But I still dont absolve a consumer from reading a very clear disclosure page on a debt they sign for 30 years.

The problem isn't in 30 year notes, it's in ARM's. And it's not really in paying the terms of the ARM's themselves, but rather with the resets. Payments of $800/mo instantly become $1400/mo, and the borrower has no alternatives other than pay up or default due to the fact that the appraised value has fallen. They'd been led to believe that with rising valuation they'd be able to qualify for a conventional note at near their ARM's monthly payment. They can't.

Even worse is the fact that the fee structures of ARM's led many lenders to sell them to people who actually qualified for conventional, FHA or VA notes, if perhaps on a somewhat more modest dwelling. And the whole thing passes from the mortgage company to the mortgage bank to the underwriters and then past the rating agencies to become MBS paper purchased by a hedge fund owned by a consortium of private equity firms, the latter entities being leveraged at the rate of 30 or 40 to 1 courtesy of their friendly investment bank... whose real assets are 10% of what they have lent out, if that.

The whole structure is really rather fragile because it's leveraged all to hell from top to bottom, and because it's based on false premises of ever increasing valuation and the ability of the borrower to pay well beyond any historical norm. And it's been brought to us by highly educated and trained financial experts whose grasp of the subject apparently doesn't extend to to the realities of middle and working class family finance...

 

[beyoku]

Originally posted by: blackangst1
First of all. The reasons these sub-prime mortages went bad is...well...the people who signed the contracts failed to pay. Sure, *some* responsibility lies in the mortgage officers (certainly not David Sambol), but the fact that consumers dont have the foresight nor the responsibility to pay their bills on time, well. Now WE pay for it.

Do you have ANY idea whatsoever how officer contracts work in the corporate world? Nevermind. Apperantly you dont. Read up sparky. Also, David Sambol had been with Countrywide for 20 years, and had a VERY succesful career. So he wasnt just slid into the contract. Do a little research.
Another thing I'd like to point out is the types of mortgages that went bad have been around for 30+ years. They werent some ponzi scheme thought up recently.

So many people have no idea what theyre talking about, including the OP for even posting this thread. And no. I dont think taxpayers SHOULD have to pay to bail these companies out, but the fact is, if we dont, the financial consequences if they all are allowed to crumble would make this event look like the lottery.

Actually depending on the area some things I read show that some homes were foreclosed on in the first Year. Many only in the second year as well. That would of course mean that their was never an individual in the house to began with. Some loans were just like fictitious paper loans.

 

[dmcowen674]

Originally posted by: dahunan
Topic Title: The banking industry knew what they were doing and knew what it would lead to.. so.. why did they do it? why do we allow

They all knew.. and now WE have to bail them out

Countrywide President and CEO received 9 million and 10 million each after BOA finished the buyout.. WTF WTF WTF .. these people architected the US Recession right now .. and they are fucking rewarded...

Why do we continue to allow these robber barons to fuck this country all the time..

Remember the Junk Bonds.. Look up a special Sonofabush .. and how much he cost AMERICA .. yet.. served no jail time and is still finding way to fuck the american taxpayers

Thanks for validating my old posts from Jan 2007 when I brought up the impending Countrywide and it's supporting characters impendig disaster that I actually starting sounding the alarm in 2002.

It took 5 years for the house of cards to fall but it certainly fell and is continuing to fall.

 

[dmcowen674]

Originally posted by: Exterous
They knew they could do it and get rich and not have to worry about repercussions?

Yep, it's just another Hayes/Anderen Consulting/Enron snow job on the American public.

Why fix it if it ain't broken.

A handful of people at the top come away with millions maybe even billions at the expense of everyone else.

"Mission Accomplished"

 

[blackangst1]

Originally posted by: beyoku

Originally posted by: blackangst1
First of all. The reasons these sub-prime mortages went bad is...well...the people who signed the contracts failed to pay. Sure, *some* responsibility lies in the mortgage officers (certainly not David Sambol), but the fact that consumers dont have the foresight nor the responsibility to pay their bills on time, well. Now WE pay for it.

Do you have ANY idea whatsoever how officer contracts work in the corporate world? Nevermind. Apperantly you dont. Read up sparky. Also, David Sambol had been with Countrywide for 20 years, and had a VERY succesful career. So he wasnt just slid into the contract. Do a little research.
Another thing I'd like to point out is the types of mortgages that went bad have been around for 30+ years. They werent some ponzi scheme thought up recently.

So many people have no idea what theyre talking about, including the OP for even posting this thread. And no. I dont think taxpayers SHOULD have to pay to bail these companies out, but the fact is, if we dont, the financial consequences if they all are allowed to crumble would make this event look like the lottery.

Actually depending on the area some things I read show that some homes were foreclosed on in the first Year. Many only in the second year as well. That would of course mean that their was never an individual in the house to began with. Some loans were just like fictitious paper loans.

Im sure this happened. Doesnt make it the standard though. Mostly we talk about generalities, and there's always a "Yeah but blah blah blah happened!". Doesnt make it the rule though.

 

[blackangst1]

Originally posted by: dmcowen674

Originally posted by: dahunan
Topic Title: The banking industry knew what they were doing and knew what it would lead to.. so.. why did they do it? why do we allow

They all knew.. and now WE have to bail them out

Countrywide President and CEO received 9 million and 10 million each after BOA finished the buyout.. WTF WTF WTF .. these people architected the US Recession right now .. and they are fucking rewarded...

Why do we continue to allow these robber barons to fuck this country all the time..

Remember the Junk Bonds.. Look up a special Sonofabush .. and how much he cost AMERICA .. yet.. served no jail time and is still finding way to fuck the american taxpayers

Thanks for validating my old posts from Jan 2007 when I brought up the impending Countrywide and it's supporting characters impendig disaster that I actually starting sounding the alarm in 2002.

It took 5 years for the house of cards to fall but it certainly fell and is continuing to fall.

Link or retract. Troll.

 

[dmcowen674]

Originally posted by: blackangst1
The reasons these sub-prime mortages went bad is...well...the people who signed the contracts failed to pay.

Your continued lambasting of the ordinary American citizen who has been duped by corporate thugs is getting extremely old.

Perhaps a move to a country more suitable to your orwellian terms is in order.

 

[blackangst1]

Originally posted by: dmcowen674

Originally posted by: blackangst1
The reasons these sub-prime mortages went bad is...well...the people who signed the contracts failed to pay.

Your continued lambasting of the ordinary American citizen who has been duped by corporate thugs is getting extremely old.

Perhaps a move to a country more suitable to your orwellian terms is in order.

orwellian? YOU are the one calling for MORE regulation. YOU are the one calling for government oversight. YOU are the one who lambasts the free market. WTF are you talking about? Show me a post about ANYTHING where I've said we need MORE regulation or MORE government oversight. Just one.

If youre going to attack me at least do so by not creating lies.