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OT slighly,,,economy is up?

D

DENNIS MIN

Member
All,

I had a bit of time to squander, turned on the tv and watched the Denver 2018 Mecum auction of cars. So far, the cars and trucks are selling really low. Perhaps that is a better indicator of the economy than the folks on the news telling me it is all great.

I saw a nice BMW sell for less than 15K. I saw an older chevy truck, didn't catch the year, probably early fifties with stake bed sell for more than that. Prices seem low, especially when you consider the expense of purchase and restoration.

D.
 
The stock market is way up.
Some people think that's the whole economy.
Some people even lecture me about that.

Ag prices are unstable right now over trade concerns.
Manufacturing wages have fallen far behind productivity gains.
Construction wages are stagnant.
Service wages are far behind manufacturing and construction wages.
I will say no more.
 
we sell used farm equip and cant haul it in as fast as we can sell it and at auctions it is bringing more than we have ever seen ---as to the rich tax cut someone explain it ---because that is a fairy tale by cnn---if the rich pd the same as everyone else who gripes about it their taxes would be cut by 75%-----now them thar is facts
 
The economy is not measured in the price of a car. Nor is it measured in wages.

"The Gross Domestic Product measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time."

If the GDP is up the economy is up, pretty simple.

I know a lot of guys working construction who are very happy with what they are making.

I know some are in favor of minimum wages set around 15 an hour. So to keep this simple if Minimum wage is 7.50 and you raise it to 15 that's a 100% increase. So Fred who's been working the line in production for 25 years and is making 13 an hour cause he's been there that long? You think he's gonna be OK with new hires getting as much as him? Or he going to demand, and get that same 100% raise? Now lets say that the company is making an item that sells in a store for 3 bucks. Now it cost a buck to make with wages being .50 cents. Well now it cost a buck just for labor. Plus the cost of materials are going to go up along with the store's cost too. So end result is a 100% increase in prices. It's called inflation and it normally goes up the same percentage point that wages do every time there is a minimum wage hike.

Now we all know the farm economy is not directly tied to the economy. Just like it isn't tied to an individual business. A farm or business can fail without effecting the overall economy.

So don't mistake what the economy is doing because you don't like the current administration. In all honesty the economy is doing great. But you are not going to be able to sustain paying someone who is only worth minimum wage as much as people think they should be paid.

OK the CEO of WalMart total compensation package last year including bonuses was just north of 22 million dollars. So people are going to say cut that and give the workers a raise. Well WalMart employs about 2.1 million people. Do the math. If the CEO worked for free and they used that to give each employee an equal share it would come to about $10.50 a year. That's right, 10 dollars and 50 cents or so for the entire year. That's one heck of a raise!

Rick
 
you ever gotten a job from a poor person? And what about those raises, bonuses, and factory expansions announced as a direct result of the tax cuts, are they making the poor poorer?
 
Collector tractors are way down from 20 years ago doesn't have as much to do with the economy as just changing interests.Myself for example I had some old pretty rare tractors from the 30's,40's and 50's did the show thing for awhile got tired of that got tired of looking at tractors with no useful purpose for me.Sold most of them and bought older neat tractors I can now farm with glad I did.As far as the general economy if Help Wanted signs mean anything the economy is great there is one in about every place I go these days.Landscaper I know starts at $16 hr and go to $18 after 2 weeks if the help works out he can't keep any help.
 
David have you ever done much work for a Poor person????? Also I do not think your personally rich but your far from poor. Just like the majority of us.
 
I work in the pipefitters local here in nwpa. We just settled a new contract 5 year deal gaining about 10$/hr by the end of it. The ENTIRE last contract (3 yr) we put our entire raise plus a dollar out of the check into ........wait for it........health care insurance, about 4.50/hr over that deal. We now currently pay about 10$ an hour worked to pay for coverage. So I guess it could depend on how you read this. I may be a whiny overpaid guy or one who has had his wages frozen for the last 4 yrs. We make a good wage and have ok insurance and retirement, I do think it would be nice To be able to add to our pension or 401 one of these times.
 
"have you ever done much work for a Poor person?????"

All my life. I've always been self employed. LOL
 
RRC .........

Well, you provide a lot of info about what the deal is costing you, but for anyone to evaluate whether or not your are whiny overpaid guy is for you to fill in the missing space for the rest of the equation. Reading between the lines tells me you'd like more but are happy with what you have but you're not improving your lot in life.
 
(quoted from post at 11:25:29 06/09/18) "have you ever done much work for a Poor person?????"

All my life. I've always been self employed. LOL
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LOL then you need to find a better person to work for!

Rick
 
(quoted from post at 08:59:13 06/09/18) The economy is booming, If you don't think about the trillion $ they borrowed to give the wealthy a tax break!
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Guess what Russ? The rich will still wind up paying over 50% of income taxes collected and not returned. You can look it up and see who pays most of the taxes. It isn't poor people who often get back more than they pay in. It's not even the middle income folks. In fact people making less than 100K to 50K a year pay about 14% of taxes collected. 30 to 50K pay about 4% and less than 30K pays a whopping 1.4%. The 0.1% who make more than 2 million a year pay 20% of income taxes collected while the 0.8% making between 500K and 2 million pay 17%. Those making between 200K and 500K pay 20.6%.

Last time I looked ALMOST EVERYONE got a tax break. But if I cut taxes 10% and you pay 100 a year you save 10 bucks. The guy who pays a million a year get the same 10%. So you pay 90 and he still pays 900,000. Yea it's fair. It's the same percentage.

Rick
 
All of the trades here in Northwest Indiana have averaged about 3% per year over the last 10 years or so. Where that 3% winds up varies. Could be insurance, pension, etc or all or part on the check.
 
There are so many jobs in this area that there is no reason for people to be poor...just laziness! I am talking good jobs starting out $17 or more an hour. I just looked there are over 500 openings at the company I work for,ranging for line workers to engineering.
 
The whole pay package per hour is right about 58$, 20 or so of which goes to pay the fringes of health insurance, pension, 401k, apprentice education fund, dues and a couple others I can't remember the names for. Before anyone grills me for taking home 38$ you need to remember a 1000$ ins deductible, NEVER HAD OR WILL GET paid for a day off or a holiday, and unless you work a full year your benefits might need to be paid out of your own money. I have been very fourtunate to have worked steady, but I know many others who don't. When work is plentiful these aren't issues but put a downturn in the economy and there are guys quickly depleting their savings just to pay health insurance for a couple of quarters of the year. That sure makes a job that pays 58$ an hour look a little different.
 
An aluminium processing mill is opening up in northern KY soon. A steel mill is supposed to be re-opening in Illinois. Jobs for people, indicators of a growing general economy. Unemployment at lowest level in 18 years. One report said there are more jobs available than people to fill them. There is a certain percentage of people who can't or won't work maybe 4 - 6 % of population. Now the ag economy a different story. On a slippery slope due to trade / tariff concerns, market prices trending down.
 
As with antique tractors, very few of today's population want to be stuck with something taking up garage space.
 
You mean the "poor" people who have the newer cellphones ,tablets, etc.? Yeah, I don't think the poor are getting poorer around here...
 
CVA is putting in a new $33 million feed mill in our county. It would seem that they have confidence.
 
I would give much weight to the sales prices of marginally collectible items. It might tell you a bit about the mood of the country, or at least one segment (car collectors), but it doesn't tell you anything about capital investment, productivity or trade balance, to name just a few metrics. I'd say housing starts are a better gauge of the economy. And housing starts have been steadily trending upwards since about 2011. But they still haven't come close to pre-2007 levels, despite rapidly rising prices in most areas.
 
(quoted from post at 17:47:35 06/09/18) I would give much weight to the sales prices of marginally collectible items. It might tell you a bit about the mood of the country, or at least one segment (car collectors), but it doesn't tell you anything about capital investment, productivity or trade balance, to name just a few metrics. I'd say housing starts are a better gauge of the economy. And housing starts have been steadily trending upwards since about 2011. But they still haven't come close to pre-2007 levels, despite rapidly rising prices in most areas.
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Mark the pre 07 levels were artificial. Started with Carter and went into Reagan and the elder Bush of making credit easier trying to stimulate the economy. Then once Clinton was in office all the gloves came off. I remember watching his speech. "Today I made achieving the American dream accessible to more Americans than ever before". What he had done was make it lenders had to accept welfare as a type of "income" on a loan application. That signaled the mortgage companies that they could target everyone. Most of the home forecloses were not on poor people but on middle income who were convinced that a mortgage with a balloon clause was OK because by the time that kicked in the person/family in question would be making more money from raises and promotions. Guess the raises were less than expected and those promotions didn't come through? When the housing bubble popped the rest of the economy went with it. Funny, but the politicians who set us up for failure were the first ones to accuse the banks and mortgage companies as being the bad guys. That's not saying they were not part way to blame. They were but had they not been allowed to run wild it never would have happened.

Rick
 
I work for poor people, I work so they don't have to! Someone has to pay for their welfare
( I think it way certain political party buys votes with our money)
 
I work with alot of fitters and they earn there money! I always kid them that they make more then me but I get 5 weeks paid vacation,12 paid holidays, up to 15% matched 401k and insurance is $40 a week. Any one who says fitters are over paid should spend a day with them.
 
It was also the poor people because they said
everybody should have the American dream they
would help make the payment for them but the
majority couldn?t or wouldn?t come up with there
share and loose there house and if the banks
wouldn?t go along with it they would loose there
federal support
 
Rick,

You said " Funny, but the politicians who set us up for failure were the first ones to accuse the banks and
mortgage companies as being the bad guys."

They also set up the regulations that forced banks in many instances to give loans to people who couldn't
otherwise afford a mortgage and they ended up defaulting.
 
I spent 12 years working for a car dealership. We repossessed more cars while external_link was in office than any other time in the 35+ years of the dealership. I stopped in the other day, repos are way down in the past year. I do believe the common people are feeling better about things. Our sales at Farmers markets/flea markets are way up. I guarantee you rich people don't shop at flea markets. Thanks to the tax cut my accountant told me to expect big refund next year.
 
> Mark the pre 07 levels were artificial.

I didn't say they weren't. I only made a point of comparison to indicate that housing starts are still low, historically speaking, despite high demand. You have to go back to the mid-nineties to find similar numbers.

As for who started the financial crisis that led to the Great Recession, there's plenty of blame to go around. Both parties supported making it easier to get a mortgage. But it was widespread corruption in the mortgage banking industry that ultimately doomed the economy, and federal regulators were largely missing in action in the years leading up to the crash. We all know who was at the wheel when the economy went in the ditch. On the other hand, not a single banker, underwriter or broker has gone to jail for their misdeeds, and they should all thank Barry for letting them off the hook. As long as there's a revolving door between the finance industry and the agencies tasked with regulating it, the cycle is going to repeat itself.
 
(quoted from post at 03:56:44 06/10/18) > Mark the pre 07 levels were artificial.

I didn't say they weren't. I only made a point of comparison to indicate that housing starts are still low, historically speaking, despite high demand. You have to go back to the mid-nineties to find similar numbers.

As for who started the financial crisis that led to the Great Recession, there's plenty of blame to go around. Both parties supported making it easier to get a mortgage. But it was widespread corruption in the mortgage banking industry that ultimately doomed the economy, and federal regulators were largely missing in action in the years leading up to the crash. We all know who was at the wheel when the economy went in the ditch. On the other hand, not a single banker, underwriter or broker has gone to jail for their misdeeds, and they should all thank Barry for letting them off the hook. As long as there's a revolving door between the finance industry and the agencies tasked with regulating it, the cycle is going to repeat itself.
Click to expand...

Thing is had the government not deregulated the banking/mortgage industries they never would have done what they did. I know everyone thinks that those running the mortgage companies and banks should have gone to jail but most had done nothing illegal. Most had operated inside the laws and regulations set up by the government.

Now here is the bad news. The government, and that's any government is most often pretty poor at stimulating the economy. The great depression lasted until England started placing massive orders for war materials. Roosevelt's job programs were a mere drop in the bucket. According to the government unemployment was around 30%. According to historians it was closer to 80%. The jobs program only put 1-3% back to work at a given time. When people got jobs they took care of family. It was until a lot of folks got called back to work that we stated pulling out of the depression. Orders for factory good for the war in Europe is what created jobs. It wasn't declared over until 1941. But that was a world wide depression. England had a similar jobs program but mostly it worked on government housing projects. It too failed to put enough people back to work. Germany was hit harder than us or England. But they recovered from the depression in a short 3 years. Once Hitler started rearming Germany the German government place massive orders for military equipment. Factories not only had to call back workers, they had to expand to meet demand. Then add in the massive building projects. Roosevelt would have gladly expanded the military but with the US isolationist policies of the day couldn't get the funding trough congress. England too was in the mindset that there would never be another major European war.

So back to the housing bubble. Most folks that got caught up in that were their own worst enemy. They could afford a 150K house. But because of government deregulation creative loans could be written up and they could buy a 250K home. First 5-7 years payments were in reach. Then someone popped that balloon and the new payment was 3 times what what the original was. All of a sudden these people could no longer afford the payments. That also meant they could no longer afford to buy things. Factory orders went down. The domino effect kicked in. Yea there were some poor people who lost their homes too. And the news media keyed on those people. Lot of folks were ignoring the plight of the middle to upper income folks who were losing their homes. Most thought that these people had been stupid. Wasn't selling news. So they, the news, keyed on the low income people who never should have qualified for a home loan. And then instead of pointing a finger at the one man who made that possible it was now the fault of the mortgage companies and banks. And the real bad part is the banks didn't sell most of these loans. What the banks were guilty of was buying these sub-prime loans from the mortgage companies. But it's OK cause the news media is never wrong and they said it was the evil banks. But it was the mortgage companies that wrote the vast bulk of these loans under the guidelines and rules established by.....THE GOVERNMENT! And both parties had their fingers in the pie!

Rick
 
(quoted from post at 09:49:17 06/10/18)
(quoted from post at 03:56:44 06/10/18) > Mark the pre 07 levels were artificial.

I didn't say they weren't. I only made a point of comparison to indicate that housing starts are still low, historically speaking, despite high demand. You have to go back to the mid-nineties to find similar numbers.

As for who started the financial crisis that led to the Great Recession, there's plenty of blame to go around. Both parties supported making it easier to get a mortgage. But it was widespread corruption in the mortgage banking industry that ultimately doomed the economy, and federal regulators were largely missing in action in the years leading up to the crash. We all know who was at the wheel when the economy went in the ditch. On the other hand, not a single banker, underwriter or broker has gone to jail for their misdeeds, and they should all thank Barry for letting them off the hook. As long as there's a revolving door between the finance industry and the agencies tasked with regulating it, the cycle is going to repeat itself.
Click to expand...

Thing is had the government not deregulated the banking/mortgage industries they never would have done what they did. I know everyone thinks that those running the mortgage companies and banks should have gone to jail but most had done nothing illegal. Most had operated inside the laws and regulations set up by the government.

Now here is the bad news. The government, and that's any government is most often pretty poor at stimulating the economy. The great depression lasted until England started placing massive orders for war materials. Roosevelt's job programs were a mere drop in the bucket. According to the government unemployment was around 30%. According to historians it was closer to 80%. The jobs program only put 1-3% back to work at a given time. When people got jobs they took care of family. It was until a lot of folks got called back to work that we stated pulling out of the depression. Orders for factory good for the war in Europe is what created jobs. It wasn't declared over until 1941. But that was a world wide depression. England had a similar jobs program but mostly it worked on government housing projects. It too failed to put enough people back to work. Germany was hit harder than us or England. But they recovered from the depression in a short 3 years. Once Hitler started rearming Germany the German government place massive orders for military equipment. Factories not only had to call back workers, they had to expand to meet demand. Then add in the massive building projects. Roosevelt would have gladly expanded the military but with the US isolationist policies of the day couldn't get the funding trough congress. England too was in the mindset that there would never be another major European war.

So back to the housing bubble. Most folks that got caught up in that were their own worst enemy. They could afford a 150K house. But because of government deregulation creative loans could be written up and they could buy a 250K home. First 5-7 years payments were in reach. Then someone popped that balloon and the new payment was 3 times what what the original was. All of a sudden these people could no longer afford the payments. That also meant they could no longer afford to buy things. Factory orders went down. The domino effect kicked in. Yea there were some poor people who lost their homes too. And the news media keyed on those people. Lot of folks were ignoring the plight of the middle to upper income folks who were losing their homes. Most thought that these people had been stupid. Wasn't selling news. So they, the news, keyed on the low income people who never should have qualified for a home loan. And then instead of pointing a finger at the one man who made that possible it was now the fault of the mortgage companies and banks. And the real bad part is the banks didn't sell most of these loans. What the banks were guilty of was buying these sub-prime loans from the mortgage companies. But it's OK cause the news media is never wrong and they said it was the evil banks. But it was the mortgage companies that wrote the vast bulk of these loans under the guidelines and rules established by.....THE GOVERNMENT! And both parties had their fingers in the pie!

Rick
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Outstanding post Rick! Truth is that a lot of high ranking pols took advice (and cash!) from people with an agenda. That agenda was to artificially create a value to something that was of of little value (low income). This lead to a lot of people buying a lot more house than they could possibly afford. (Classic example I recall was a McDonalds manager buying a $450K home with outrageous property taxes!) Any time the gov't meddles like this it ends badly, some times very badly. It seems we never learn that trying to make a silk purse out of a sows ear always leaves you with a sows ear.

As far the OP, luxury goods (and colelrtor cars
 


Ah, screwed up!

As to the OP, luxury goods, (and collector cars ARE luxury goods) follow an economy in sales. They don't lead it. We're coming out of a tough period and people are not yet ready to throw gobs of cash at every luxury. If things go well for a few years, prices will rise. If it falls apart, and it could, prices will drop even more. Plus, as with the antique tractor market, the market is fairly well flooded already.
 
Government mandated no money down mortgages to people who could not afford a mortgage of any kind is what sunk the economy.
 
Youtube videos don't lie....pull up the videos of "W" introducing home ownership plan and the heads of Freddie and
Fannie to make it happen and telling how everyone they could now buy a house....new housing construction kept the
economy rolling along for his years....then boom....lack of regs enforcement (during his terms) put us underwater. And
I voted for him...twice.
 
> I know everyone thinks that those running the mortgage companies and banks should have gone to jail but most had done nothing illegal. Most had operated inside the laws and regulations set up by the government.

Just because nobody was prosecuted doesn't mean nobody broke the law. If someone markets a product as something it is not, most folks would agree that would constitute fraud, even if the seller isn't charged and convicted of a crime. In the case of the financial meltdown, there was widespread corruption throughout the industry. Brokers were marketing mortgages to people who didn't understand them and had no chance to repay them. Underwriters were rubber-stamping those same mortgages, and investment bankers were packaging them up and selling them to overseas investors as safe products backed by the US government. They DID NOT do this because the gubmint told them to do it. They did it because they were making money hand over fist and they wanted to rake in as much dough as they could before the whole thing inevitably blew up.

Yes, much has been made of the folks who took out mortgages they didn't understand to buy houses they couldn't afford. But the mortgage industry only turned to these unsophisticated and unqualified borrowers after they ran out of borrowers who were even marginally qualified. In the end they even ran out of UNqualified borrowers, but that didn't stop them: they cooked up esoteric derivative investments that were even riskier than the garbage on which they were based. Sorry, but you can't blame the mortgage crisis on the folks who were told they could buy a house if they just signed their names on a bunch of papers they didn't understand. There's such a thing as "fiduciary responsibility", and if you believe in it, it follows that it is wrong to issue a loan to someone who is incapable of repaying it. To do so is harmful to the borrower, and fraudulent to the person whose money is backing the loan.
 
(quoted from post at 03:25:14 06/11/18) > I know everyone thinks that those running the mortgage companies and banks should have gone to jail but most had done nothing illegal. Most had operated inside the laws and regulations set up by the government.

Just because nobody was prosecuted doesn't mean nobody broke the law. If someone markets a product as something it is not, most folks would agree that would constitute fraud, even if the seller isn't charged and convicted of a crime. In the case of the financial meltdown, there was widespread corruption throughout the industry. Brokers were marketing mortgages to people who didn't understand them and had no chance to repay them. Underwriters were rubber-stamping those same mortgages, and investment bankers were packaging them up and selling them to overseas investors as safe products backed by the US government. They DID NOT do this because the gubmint told them to do it. They did it because they were making money hand over fist and they wanted to rake in as much dough as they could before the whole thing inevitably blew up.

Yes, much has been made of the folks who took out mortgages they didn't understand to buy houses they couldn't afford. But the mortgage industry only turned to these unsophisticated and unqualified borrowers after they ran out of borrowers who were even marginally qualified. In the end they even ran out of UNqualified borrowers, but that didn't stop them: they cooked up esoteric derivative investments that were even riskier than the garbage on which they were based. Sorry, but you can't blame the mortgage crisis on the folks who were told they could buy a house if they just signed their names on a bunch of papers they didn't understand. There's such a thing as "fiduciary responsibility", and if you believe in it, it follows that it is wrong to issue a loan to someone who is incapable of repaying it. To do so is harmful to the borrower, and fraudulent to the person whose money is backing the loan.
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Well unless you are going to pass laws protecting people who borrow too much because they are ignorant from foreclosure then yes they too have to accept the responsibility for their actions. If you really look deep it was not the vast bulk of the mortgage companies that went after the sub prime market. It was just a few. And those were ones like Freddie Mac/Fannie Mae. And guess what, Freddie Mac/Fannie Mae are OWNED BY THE US GOVERNMENT! Instituted by the liberals with the specific idea of allowing poor people the opportunity to buy homes. And there was a big push clear up to the POTUS to prosecute if they could. And even external_link's justice department couldn't get enough evidence of wrong doing. Sure IMO they were morally wrong but according to the laws and regulations? We don't allow prosecutions based on morals. You actually have to break a law. Just because some reported claims a law has been broken doesn't mean it has been. Should some people have gone to jail over this? Yea but in my opinion you would have needed to start with the politicians who created the monster.

Rick
 
(quoted from post at 23:16:40 06/10/18) Youtube videos don't lie....pull up the videos of "W" introducing home ownership plan and the heads of Freddie and
Fannie to make it happen and telling how everyone they could now buy a house....new housing construction kept the
economy rolling along for his years....then boom....lack of regs enforcement (during his terms) put us underwater. And
I voted for him...twice.
Click to expand...

And you can also go to You Tube and find videos of Bush warning about the coming collapse and talking to Congress about fixing it. It started way back under Carter and just kept growing. It wasn't all one guy.
 
you guys are missing a lot of what happened in 2007-2008

yeah the housing problems were a result of other issues. THe economy wasn't doing too bad. then oil started to climb and gas was $4.00/gallon. aluminum and steel and iron went thru the roof. I recall lots of discussions on this forum about scrapping farm equipment at $600/ton (give or take).

The high commodity prices slowed things down in a hurry. I know we were paying more for the iron in our parts than what we were getting for the finished product (machined and painted). that made us upside down. so layoffs, no bonuses, no new equipment ect ect. at home $4 gas slowed our spending way down.

with the slow down mortgages became hard to pay especially those that had the shady deals (more house than they could really afford) and it went sour reel fast.

key things you guys have missed beating the mortgage crisis horse.
 
(quoted from post at 09:19:06 06/11/18) you guys are missing a lot of what happened in 2007-2008

yeah the housing problems were a result of other issues. THe economy wasn't doing too bad. then oil started to climb and gas was $4.00/gallon. aluminum and steel and iron went thru the roof. I recall lots of discussions on this forum about scrapping farm equipment at $600/ton (give or take).

The high commodity prices slowed things down in a hurry. I know we were paying more for the iron in our parts than what we were getting for the finished product (machined and painted). that made us upside down. so layoffs, no bonuses, no new equipment ect ect. at home $4 gas slowed our spending way down.

with the slow down mortgages became hard to pay especially those that had the shady deals (more house than they could really afford) and it went sour reel fast.

key things you guys have missed beating the mortgage crisis horse.
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No one is missing it. Mark and I have been discussing the housing bubble bursting. Yes there were other factors in the recession. The big triggers though was the housing market meltdown and the near 5 dollar a gallon gas. Yea the steel market did play into the recession but the triggers were the 2 items I mentioned.

Mark, just which laws were broken? Most people who were foreclosed on had mortgages with a balloon clause in them. Most poor did not have that type of mortgage. Most of the folks who signed the balloon mortgages knew what they were signing. Neither the news media nor the politicians told the truth about it.
The news media pushed the poor people angle because it riled people up and raised ratings/sold papers. And the politicians were going to play to the public. Our newly elected president used it as a "them against the little guy" talking point. Others as a platform to force through banking regulation to make themselves look good for the next election cycle. But when you have take it to a judge proof of law breaking behavior, hard evidence that can lead to a conviction, I'll side with you. I know that a certain politician who controlled the White House and the Justice Department would have loved to have hauled rich fat cat bankers and CEO's in front of a judge. So why didn't it happen? Would have really given a boost to the take back Wall Street movement that fizzled. What you had was a bunch of soon to be former home owners claiming that they were told this or that without any evidence to support that claim. Remember, innocent until proven guilty!

Rick
 
> yeah the housing problems were a result of other issues. THe economy wasn't doing too bad. then oil started to climb and gas was $4.00/gallon. aluminum and steel and iron went thru the roof. I recall lots of discussions on this forum about scrapping farm equipment at $600/ton (give or take).

Hmm. That's a novel theory: The financial meltdown was the result of of rising commodity prices.

It's more likely rising oil, aluminum and steel prices were the result of the booming economy of the mid-aughts, rather than the initiator of the crash. Prices rise with increased demand; that's the way it works. And when the economy crashed, guess what happened? Fuel and metal prices came back down. You may also have noticed that fuel and metal prices have been rising as the economy recovers.

Plenty of research has been done regarding the causes and effects of the financial crisis. Certainly there were a number of factors, but pretty much everyone agrees that issuing questionable mortgages to unqualified borrowers was a major contributor to the crisis. As was the sale of even more questionable mortgage-backed derivative investments.
 
> It was just a few. And those were ones like Freddie Mac/Fannie Mae. And guess what, Freddie Mac/Fannie Mae are OWNED BY THE US GOVERNMENT!

I think the term is "quasi-government corporation". They are publicly-traded corporations, chartered by Congress. And it was that association with the federal government that led foreign investors to believe Uncle Sam would bail them out if they got into trouble. Which is pretty much what happened.
 
> Mark, just which laws were broken?

Well, starting at the bottom, I'm pretty sure it's a <a href="http://homeguides.sfgate.com/penalty-lying-mortgage-100867.html">crime to falsify a mortgage application</a>. Anyone signing an application they knew to be factually incorrect committed a crime, and the mortgage brokers who in most cases cooked up the bogus applications were accomplices.

Likewise, the underwriters who approved the mortgages while at least suspecting them to be fraudulent would be breaking the law.

Moving on up the food chain, I'd say it's a bit more difficult to pin down those who profited most: the investment bankers who cooked up fancy derivatives and sold them to overseas investors. Certainly they misrepresented their products, although it's hard to prove fraud when the misrepresentation was obvious to those few buyers who took the time to do their research. But shouldn't we expect the highest level of integrity from those at the top of the food chain, rather than the other way around?

> Most people who were foreclosed on had mortgages with a balloon clause in them. Most poor did not have that type of mortgage.

The balloon mortgages were very popular among the poorest and least sophisticated borrowers, because they had very low teaser rates. And I suspect they were the most profitable mortgages for brokers to sell.
 
(quoted from post at 17:46:01 06/11/18) &gt; Mark, just which laws were broken?

Well, starting at the bottom, I'm pretty sure it's a &lt;a href="http://homeguides.sfgate.com/penalty-lying-mortgage-100867.html"&gt;crime to falsify a mortgage application&lt;/a&gt;. Anyone signing an application they knew to be factually incorrect committed a crime, and the mortgage brokers who in most cases cooked up the bogus applications were accomplices.

Likewise, the underwriters who approved the mortgages while at least suspecting them to be fraudulent would be breaking the law.

Moving on up the food chain, I'd say it's a bit more difficult to pin down those who profited most: the investment bankers who cooked up fancy derivatives and sold them to overseas investors. Certainly they misrepresented their products, although it's hard to prove fraud when the misrepresentation was obvious to those few buyers who took the time to do their research. But shouldn't we expect the highest level of integrity from those at the top of the food chain, rather than the other way around?

&gt; Most people who were foreclosed on had mortgages with a balloon clause in them. Most poor did not have that type of mortgage.

The balloon mortgages were very popular among the poorest and least sophisticated borrowers, because they had very low teaser rates. And I suspect they were the most profitable mortgages for brokers to sell.
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Mark I'll bet dollar to donuts that these alleged crimes were never put on paper. Sure some low life may have told someone they could afford it but they never wrote down or put that language in a contract.

And most of the balloon mortgages were on homes that sold for 250,000 or more. The poor were not buying homes that ran 250,000. Most of those who were foreclosed on started out with monthly payments around 750 to 1500 or more on homes that started at 250,000 and went up from there to some over a million. When the balloon came due those payments jumped to 2500 or more. Most of the working poor who were suckered in were on the hook for 60-100K on fixed rates. Just cause the news media claimed that it was the poor doesn't make that the truth. And just because someone is poor doesn't make them stupid. Most of the poorer people I know are anything but dumb, most just made poor life choices. I know more than one couple that had a kid when they were still kids, got married and blew any opportunity to get an education. Doesn't make em dumb. Heck my wife and I started out that way. Then we started making better life choices. Doesn't make me any better than those who never recovered from bad decisions, just luckier. Many of those poor people who were public assistance jumped at the chance to own a home never thinking that their income may be reduced because of government cuts. A poor choice. And seeing that many of those people are not stupid they should not have been sucked in. But then a terrible thing jumped in there.......GREED! Yes, even poor people are effected by the green monster!

Rick
 
> And most of the balloon mortgages were on homes that sold for 250,000 or more. The poor were not buying homes that ran 250,000.

At the peak of the real estate bubble, a starter home in Detroit Metro would have been well over 100K. That would be a 1000 square foot, two bedroom house built in the fifties. And in many cities, that house would have been much more. Yes, when variable-rate, balloon mortgages first came out they were more popular with upper-middle class buyers who understood what they were getting into. But by the early aughts, many lower-income buyers with marginal credit were opting for them, as they could more easily qualify. <a href="https://www.bls.gov/opub/btn/volume-5/what-the-consumer-expenditure-survey-tells-us-about-mortgage-instruments-before-and-after-the-housing-collapse.htm">In 2006, adjustable-rate mortgages comprised 27 percent of mortgages.</a>

I personally know a number of folks who got into trouble with their mortgages during the crisis. They all had adjustable rate mortgages, although most had other problems that contributed to them losing or nearly losing their homes. One was a self-employed carpenter who was in the National Guard and was called to active duty. Another worked for Collins & Aikman, an automotive supplier run into bankruptcy by former Reagan OMB Director David Stockman. In both cases, those homeowners had no business taking out adjustable-rate mortgages. But they did.

To give an example a little closer to home, when my stepson returned from the Marines, he took out a mortgage to buy his house back from us. (We bought it from him when he enlisted after 9/11.) We initially steered him into a fixed-rate mortgage with a reasonably reputable lender. But he walked out on that when he found that they wouldn't let him take cash out of the home's equity. (He wanted to take cash out to start a business.) So he looked around and found a shady broker, who set him up with a mortgage where he could take out cash. The broker even fronted him the "down payment", which I'm told is illegal. I'm not going to describe the outcome of all this, which has been painful to everyone in our family, but I'll note that the mortgage he took out was adjustable-rate. And the loan was for less than 50K.
 
(quoted from post at 03:05:07 06/12/18) &gt; And most of the balloon mortgages were on homes that sold for 250,000 or more. The poor were not buying homes that ran 250,000.

At the peak of the real estate bubble, a starter home in Detroit Metro would have been well over 100K. That would be a 1000 square foot, two bedroom house built in the fifties. And in many cities, that house would have been much more. Yes, when variable-rate, balloon mortgages first came out they were more popular with upper-middle class buyers who understood what they were getting into. But by the early aughts, many lower-income buyers with marginal credit were opting for them, as they could more easily qualify. &lt;a href="https://www.bls.gov/opub/btn/volume-5/what-the-consumer-expenditure-survey-tells-us-about-mortgage-instruments-before-and-after-the-housing-collapse.htm"&gt;In 2006, adjustable-rate mortgages comprised 27 percent of mortgages.&lt;/a&gt;

I personally know a number of folks who got into trouble with their mortgages during the crisis. They all had adjustable rate mortgages, although most had other problems that contributed to them losing or nearly losing their homes. One was a self-employed carpenter who was in the National Guard and was called to active duty. Another worked for Collins &amp; Aikman, an automotive supplier run into bankruptcy by former Reagan OMB Director David Stockman. In both cases, those homeowners had no business taking out adjustable-rate mortgages. But they did.

To give an example a little closer to home, when my stepson returned from the Marines, he took out a mortgage to buy his house back from us. (We bought it from him when he enlisted after 9/11.) We initially steered him into a fixed-rate mortgage with a reasonably reputable lender. But he walked out on that when he found that they wouldn't let him take cash out of the home's equity. (He wanted to take cash out to start a business.) So he looked around and found a shady broker, who set him up with a mortgage where he could take out cash. The broker even fronted him the "down payment", which I'm told is illegal. I'm not going to describe the outcome of all this, which has been painful to everyone in our family, but I'll note that the mortgage he took out was adjustable-rate. And the loan was for less than 50K.
Click to expand...

Mark what I said was that most of the adjustable rate mortgages were on homes of higher value. Were there some lower income people who took em? Sure. But most of the housing meltdown was not cheap homes. Close to 75% were home worth 250K or more. I will point out that most people who could afford a 150K home back in 15 years or so ago had enough of an education that they should have known better. And I just looked, median price of a home in Detroit MI in 2008 was 34,500. Now maybe they were worth more in the burbs but in Detroit they were not worth much. In fact according the the US government the average value of a home foreclosed on during the housing meltdown in 2008/09 was 242,000 dollars. That's the average value. According to other research Detroit was in decline for 30 years prior to the meltdown, had much higher than average poverty rates and declining home values even back then. Funny how Detroit has had lib leadership for 53 years and has been in decline sense the 70's?

Rick
 
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