Posted by Dinah on October 3, 2008, at 23:44:44
In reply to Re: Oops-- there goes the economy... » Dinah, posted by Bobby on October 3, 2008, at 23:16:59
I'm sorry, Bobby. I should be careful with the "reply to" button. My post wasn't directed at you. I certainly don't think you have a sick mind (certainly not moreso than me) or that you can't be reasoned with. I'm just frustrated in general. The local politicians on both sides of the aisle are posturing. The local republicans were against the bill, the local democrats were for it. The local radio station is trying to explain what's going on, but it's all in bits and pieces and hard to put together.
I wasn't kidding when I said I don't panic, in general. But this crisis was looming for a while, and I'm pretty upset about it. From what I can decipher, which isn't as much as I'd like, the reason it all came to a head so quickly has something to do with marked to market asset valuation. And trying to figure out whether it's a good or bad thing is beyond my current powers.
The best I can tell from what I'm hearing is that the bailout isn't so much to shore up the market (although that surely is a consideration), but because credit markets are out of money due to the housing crash. Everything from the State of California to people applying for college loans to people trying to get mortgages or credit are affected. So the bailout is to help just the situations you're talking about. Or so they say.
I'm not sure how mortgage companies can ask for more than the amount agreed upon. I suppose the fine print might contain some clause that kicks in when the value of a house drops below a certain percentage of the outstanding loan? I have heard of people having their mortgage line of credit accounts canceled because of the drop in home values.
My general understanding is that right now mortgage companies are being fairly understanding because the last thing they want are more homes. But that may be a local thing.
It *is* a bad situation, and one that everyone should be angry about. I just wish that the anger would be directed in such a way as to make sure this never happens again. The trouble is that politicians are up for reelection every few years, and they don't seem to take a long term stance. It wouldn't be popular to make some of the changes that need to be made. But they do need to be made. Bailing out while continuing the same poor policies is just going to create another problem down the line. I really am frustrated that regulations weren't put in place after the savings and loan crisis. I really am frustrated that something as simple as risk adjusted FDIC premiums isn't a given.
I'm sorry about your personal difficulties with tight credit, Bobby. I do know it's easier to talk about things in abstract than in the particulars. That's what makes all of this so hard.
poster:Dinah
thread:854180
URL: http://www.dr-bob.org/babble/poli/20081002/msgs/855668.html