The Conservative Cave
Current Events => The DUmpster => Topic started by: USA4ME on September 17, 2008, 09:54:24 AM
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debbierlus
I have a serious question for the financially astute on this board; Where is this money coming from?
70 billion 'infused' into the banking system....
80 billion dollar bailout for AG
110 billion for Fannie & Freddie
Wachovia, Washington Mutual, and others stand on the line....
I know they don't release the figures of how much money they print - so is this just the reserve printing up gobs of worthless money that will drive our economy into quick ruin?
We don't have any money. Are we borrowing this money? I don't understand.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4020005
New fire wanting to know where the Fed gets the money as the lender of last resort. Let's see if any of them accidently stumble into the answer.
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debbierlus
I have a serious question for the financially astute on this board; Where is this money coming from?
70 billion 'infused' into the banking system....
80 billion dollar bailout for AG
110 billion for Fannie & Freddie
Wachovia, Washington Mutual, and others stand on the line....
I know they don't release the figures of how much money they print - so is this just the reserve printing up gobs of worthless money that will drive our economy into quick ruin?
We don't have any money. Are we borrowing this money? I don't understand.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4020005
New fire wanting to know where the Fed gets the money as the lender of last resort. Let's see if any of them accidently stumble into the answer.
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Was just reading that thread and wondering the same thing, USA4ME.
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Pretty soon we'll be like the Scandinavian countries, paying 50% or more of our earnings into the lovely fed tax system. :whatever:
I guess we'll all have to start getting 2 or 3 jobs and working weekends to cover the fumbles of the Washington elite.
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Was just reading that thread and wondering the same thing, USA4ME.
Someone posted this:
yibbehobba
5. Start here:
http://en.wikipedia.org/wiki/Federal_reserve#Purpose
http://en.wikipedia.org/wiki/Lender_of_last_resort
They aren't going to understand it.
EV_Ares
8. Taxes, confiscation of the public's money thru raising of taxes, yours and mine to give to whomever, i.e. bailouts.
The Fed printing money out of thin air which also causes inflation of goods and services that we each have to pay for to live, i.e., gas, food, utilities, our health insurance, etc.
The Fed prints money out of thin air in order to cover for Social Security payments since there's more going out than coming in. Wonder why I never see any threads at the DUmp complaining that SS is creating inflation through this process?
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Pretty soon we'll be like the Scandinavian countries, paying 50% or more of our earnings into the lovely fed tax system. :whatever:
I guess we'll all have to start getting 2 or 3 jobs and working weekends to cover the fumbles of the Washington elite.
Once this mess settles down once and for all, I will be furious if there is even one more mortgage loan made to a sub-600 FICO without less than 65% LTV, and you can forget about cash-out unless you can prove you don't need it. I am sick and tired of those New York ****sticks making bets they couldn't understand based on loans that shouldn't have been made.
And, parenthetically, Fannie and Freddie gave HOW much to Obama over the years?
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And, parenthetically, Fannie and Freddie gave HOW much to Obama over the years?
Approximately $130,000 in campaign contributions so far, making the messiah their #2 recipient.......
doc
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question for the financially astute on this board
Barking. Tree. Wrong.
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And, parenthetically, Fannie and Freddie gave HOW much to Obama over the years?
Approximately $130,000 in campaign contributions so far, making the messiah their #2 recipient.......
doc
Pelosi better not beat the hive too hard...some unpleasant facts are likely to come out. I wonder how many gigolos the banks sent Barney Frank over the years to gain his favor.
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Once this mess settles down once and for all, I will be furious if there is even one more mortgage loan made to a sub-600 FICO without less than 65% LTV,...
What's typically misunderstood is that the loans that were being closed that were sub-prime were to applicants who had great credit. So the problem wasn't their past payment history, their credit worthiness was never the issue, it was doing 100% financing on non-income verification and/or stated income loans. Yeah, it got a lot of people into new homes. Problem is they had nothing of their own money in it so walking away didn't cost them anything except a foreclosure on their credit, and Fannie and Freddie policy said that after 2 years that foreclosure wasn't even going to be considered anymore. So screw up, wait 2 years, you can get another Fannie/Freddie loan.
Personally I've got no problem if someone wants to do 100% financing on someone who has a credit score of 400 provided that once they go broke they don't want to get bailed for being stupid. Fannie and Freddie both liked the yield the "B" and "C" paper market had created and wanted in on the action, but that was never their purpose. Had Fannie and Freddie kept doing the "A" paper they had always done in the manner in which they had always done it, and let the sub-prime lenders do their thing, this likely would have never happened, because the sub-prime lenders were all selling their own securities with the buyers taking the risk.
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Once this mess settles down once and for all, I will be furious if there is even one more mortgage loan made to a sub-600 FICO without less than 65% LTV,...
What's typically misunderstood is that the loans that were being closed that were sub-prime were to applicants who had great credit. So the problem wasn't their past payment history, their credit worthiness was never the issue, it was doing 100% financing on non-income verification and/or stated income loans. Yeah, it got a lot of people into new homes. Problem is they had nothing of their own money in it so walking away didn't cost them anything except a foreclosure on their credit, and Fannie and Freddie policy said that after 2 years that foreclosure wasn't even going to be considered anymore. So screw up, wait 2 years, you can get another Fannie/Freddie loan.
Personally I've got no problem if someone wants to do 100% financing on someone who has a credit score of 400 provided that once they go broke they don't want to get bailed for being stupid. Fannie and Freddie both liked the yield the "B" and "C" paper market had created and wanted in on the action, but that was never their purpose. Had Fannie and Freddie kept doing the "A" paper they had always done in the manner in which they had always done it, and let the sub-prime lenders do their thing, this likely would have never happened, because the sub-prime lenders were all selling their own securities with the buyers taking the risk.
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Hence the <=65% LTV bit. They can lend at any freaking rate they want so long as (a) people have skin in the game, and (b) there's equity for someone if it all needs to be unwound.
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Hence the <=65% LTV bit. They can lend at any freaking rate they want so long as (a) people have skin in the game, and (b) there's equity for someone if it all needs to be unwound.
Agreed. Currently the threshold in order to receivce 95% financing is a minimum credit score of 650. Of course that's just a standard for the underwriters to go by and they can still refuse the loan if other circumstances dictate. Someone with a sub-600 score doesn't even need to apply.
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Agreed. Currently the threshold in order to receivce 95% financing is a minimum credit score of 650. Of course that's just a standard for the underwriters to go by and they can still refuse the loan if other circumstances dictate. Someone with a sub-600 score doesn't even need to apply.
But thats....thats.... RACIST!!!!11!!!oneone!!!1 -- At least that is what you will be told if you hold people to credit standards.
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Hence the <=65% LTV bit. They can lend at any freaking rate they want so long as (a) people have skin in the game, and (b) there's equity for someone if it all needs to be unwound.
Agreed. Currently the threshold in order to receivce 95% financing is a minimum credit score of 650. Of course that's just a standard for the underwriters to go by and they can still refuse the loan if other circumstances dictate. Someone with a sub-600 score doesn't even need to apply.
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The only problem I have with that is that it could dictate that otherwise worthy people won't be able to buy a home because of their credit score. My score didn't go over 650 until I bought a home.
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The only problem I have with that is that it could dictate that otherwise worthy people won't be able to buy a home because of their credit score. My score didn't go over 650 until I bought a home.
I understand that sentiment, and before there was credit scoring an underwriter would make a determination based upon credit payment history and not necessarily in what entities you had obtained credit. The problem came when borrowers were fraudulant in providing their credit history, especially when it came to credit from what is called "non-traditional" sources. As with other things, the few crooks ruined it for the many honest people.
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OK, out of all the economic "experts" at the DUmp, did any answer the question?
A majority of the answers were along the lines of "out of thin air," "the Fed prints the money," and "it's like credit but nothing behind it to back it up." Cute, but wrong.
I take it all the financial wizards at the DUmp have answered. Goodness knows they aren't going to pass up the opportunity to show themselves to be geniuses at how the Fed Reserve works. And even if one of them had given the right answer, we know from experience that another DUmmie would have come along and written the correct answer, too, as though they didn't see the other DUmmie haven already provided the correct answer, so as to receive recognition and praise. It's the way of the primitives.
Of the 35 responses, these two were the closest:
HamdenRice
16. Generally by selling treasury bills. The Treasury has become a Hedge Fund
According to the Fannie Freddie bailout, as the Fed buys mortgage backed securities they sell treasuries to raise that money.
OurVotesCount-Ohio
24. They've just started a new program selling bonds for the federal reserve.
http://money.cnn.com/2008/09/17/news/economy/treasury_f...
From HamdenRice, the "Hedge Fund" thing is from left field, not sure where he dreamed that one up from, or the idea that the Fed sells treasury bonds. From OurVotesCount-Ohio, not sure where the "new program" belief came from either since this is how the Fed has raised the money for a long time now. But despite their not fully understanding it, which is obvious, they never really gave the correct answer.
Attn lurking DUmmies, the answer is this: The Treasury Dept, not the Fed Reserve, is the entity that sells treasury bonds. The Fed Reserve then borrows the money from those treasury bonds and in turn loans the money out to the various institutions they are trying to shore up.
Currently the Fed Reserve has access to around $450B in Treasury Bonds of which they have used around $200B in 2008 alone.
I guess my favorite was the "the Fed prints the money" answer. If you were to have an appraiser provide the total value of all assets in the USA and assign a dollar value to the whole, the amount of fiat money (paper currency) that has been printed as a percentage of the whole value is something in the neighborhood of less that 2%.
Once again, the DUmmies show they don't really have a clue how it all works. Anyone surprised?
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Anyone surprised?
Not I.
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Expecting anyone at the DUmp to be "financially astute" would be like expecting Oooobamalama to give a speech without a teleprompter or Bubba "blowjob" Clinton to understand marital fidelity.
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Expecting anyone at the DUmp to be "financially astute" would be like expecting Oooobamalama to give a speech without a teleprompter or Bubba "blowjob" Clinton to understand marital fidelity.
Need any advise from the "Financially Destitute"? Just trying to help out here.... :-)
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Expecting anyone at the DUmp to be "financially astute" would be like expecting Oooobamalama to give a speech without a teleprompter or Bubba "blowjob" Clinton to understand marital fidelity.
Need any advise from the "Financially Destitute"? Just trying to help out here.... :-)
I like to quote Roy Clark..."I make money pretty fast. It just don't slow down when it gets to me."
:-)