Subprimes: From Bad to Worse

The mortgage mess isn't causing our worsening economic condition; it's a symptom of a far more serious problem.

By Daniel Gross | Newsweek Web Exclusive

Dec 6, 2007 | Updated: 6:51 p.m. ET Dec 6, 2007

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Posted By: Johndavidprince @ 03/17/2008 9:35:49 AM

Comment: While we are arguing over political issues that are not true issues the dollar has sunk to levels not seen in years. The level of debt is astounding. Corporate oversight is at an all time low not seen since the 1920???s unregulated stock market or the days of the robber barons and monopolies that crippled the economy stifling competition. We have a housing market that is more like a funeral than a market with upside down mortgages, foreclosures, and evaporating value. Then add in the geopolitical issues that destabilize the energy supply, like the Middle East and South America. Plus there is the Individual debt, abusive business practices, unsustainable business strategies, corporate scandals, and general greed. Then top it all off with trade imbalances, national debt, war spending, poor ignorant management of the institutions of power in the nation, and we are still talking about issues in politics that have no real barring on how to fix a broken system. We are shocked by republican or democratic sex scandals. We are fighting over, race, gender, or religion while the real issues remain on the sidelines. We are failing the future generations if we continue the madness. We will fail the world if we do not leave behind our puritanical culture war and unify to correct the real problems facing the nation. More morality will not fix the economy. More religion will not fix the economy. The free market will not fix the issue of oversight, product safety, or ethics in business on their own. We have had 25 years of Milton Freidman economics and Leo Strauss or Irving Kristol political ideological results. We have a divided nation that is bankrupt both morally and financially, led by those proclaiming the influence of religion fused with government, a free market with an absence of oversight, and a government that under conservative republican control wishes noting but the elimination of government except for the military. We are seeing the fruit of their tree rooted in outdated, ignorant misconceptions of ideology, theology, ecology, and sociology. The failure of their political agenda has been the disenfranchisement and general distrust of government and the other higher institutions of the nation. They have betrayed the public trust not by sleeping with a call girl, rather they have violated it with absolution water-boarded by blind ignorance and a romanticism for an ideological concept that flawed with a focus on the ???ME??? instead of the ???WE.???
Posted By: Johndavidprince @ 03/17/2008 9:35:16 AM

Comment: Personal responsibility is often mentioned especially by the right wing of the Republican Party. The all to familiar phrases used are ???pull yourself up by the bootstraps??? or ???man up??? and various other lexicons. Why then should corporations ever be bailed out for their poor judgment or mismanagement of business? Why should government ever assist the ???free market??? with tax breaks, tax shelters, subsidies, and vast grant programs? Should the ???free market??? be allowed the freedom to suffer from their own mistakes? Every time we the tax payer jump in and bail the market out we are allowing business to skate from personal responsibility, the very antithesis of conservative ???free market??? dogma. The goose must not care about the gander, only the goose. We have been bailing out scandals, fraud and massive debt for a long time. Lately we have been bailing out debt with debt and we wonder why the market has collapsed like we have never seen since the Great Depression. The last straw that will break the back of the flailing market is unemployment and further erosion of the dollar. Can the neo-conservatives follow their own advice? I doubt it. The problem goes deeper than just economic hypocrisy. There is a systemic cancer within the modern capitalistic establishment. Corporations have since 1890 or so have been granted the equal application of the law under the 14th Amendment. Many have complained before me, so this should be nothing new. I feel that is the hart of the issue is a free market stampeding toward the cliff like buffalo hunted by the injustice of the abuse of the legal system of the US. The favoritism or unequal weight of law is leaning drastically toward market benefit. The legal argument of corporations is that they are equal to humans. Really? There is more law on the side of the protection of the Market and Corporations than there is for the individual living breathing citizen. It does not require legal council to come to that conclusion. The end result in my opinion is that we now have a separate and unequal class of citizen in the US by weight of law alone. If we also consider the true definition of a citizen as a human or person the corporate legal grounds for their argument fall on their face due to the merits of further in-depth thought.
Posted By: michelsonB @ 02/25/2008 12:42:55 AM

Comment: Los Angeles 02/2008 DATELINE --- It's amazing how many homeowners will not fight the foreclsoure process. According to borrowerhotline .com, more than 70% of american homeowners accept their fate and eat the pain of a forclosure. This information is offered by Maher Soliman, the web site publisher and managing director for NLS.

According to the website, in June this year the secretary of Housing and Economic Development of the Patrick administration Dan O???Connell took the initiative along with government officials and top mortgage firms??? executives from Massachusetts to develop means through which foreclosure can be avoided and the foreclosure victims can be aided.

Delinquent Sub-prime loans were accentuated to be the main reason responsible for the soaring rise of foreclosure victims. Borrowers with bad credit history were allowed with high risk loans as they were tempted seeing the initial rates were low. The ravaging effect started when the rates of interest shot up unexpectedly high. Enactment of laws checking the foreclosure rates were suggested by Governor Deval L. Patrick.

In April in meeting called by the Patrick administration it was suggested that the State should financially help to refinance loans to reduce foreclosure rates.

Reforms aiming to help the debtors to catch up were planned and corresponding schemes were passed in 2006. The plan targeted to provide defaulting hose owners to catch up by extending the grace time from 60 to 125 days. Unfortunately the plan failed to go very far.

NLS and borrowerhotline are consumer homeowner advocates pushing to stop foreclosure due to predatory lending practices. Call Direct at telephone 310-435-2628

www.borrowerhotline.com ....and spread the word to friends and workers. This has to be stopped! Find out what you are entilted to receive!
Posted By: Ahavah @ 12/19/2007 5:48:05 PM

Comment: I don't believe for one minute that the people who took out these loans are entirely to blame. A few years ago we engaged a realtor. I, being the paranoid anal-retentive control-freak type, had put our income and budget on a spreadsheet down to the last penny, and decided what we could afford to pay each month on a mortgage, and then figured out the maximum price a house could be to achieve that at the then-interest rates. However, our "mortgage broker" the realtor engaged "pre-approved" us for a mortgage that was over 50% again what I had decided to allow. I told the realtor I wanted a house in the price range I had calculated, and she spent the next 6 months showing us things at or above what the broker "pre-approved" us for, in spite of my repeated complaints. She had no intention of doing what was in our best interests, she and the "broker" her company used intended to fleece us and put us in a mortgage we could not afford. Needless to say, I did not buy anything from her or renew the contract with her company. I told the next realtor we hired exactly what had happened and told her that I absolutely would not buy anything from her if she didn't show us houses in the price range I indicated.

I doubt very seriously that most people have any idea that they cannot trust their realtor and mortgage brokers to do the right thing. They presume the people they hire are representing their best interests, and have no idea that they have no intention of doing so. They trust the professionals, who then screw them royally.
Posted By: yellowkinghill @ 12/08/2007 12:03:20 AM

Comment: Doesn't anyone realise that Globalization is about big hunters with big guns for $$$ and bankrupting America has only just begun. When cash is cash and equal everywhere we will have arrived. At that point there will be no donut flavor choices. I am all for it except that human nature has always been our worst enemy.
Posted By: marketwatcher16 @ 12/07/2007 3:39:24 PM

Comment: Daniel, sorry, your report is not quite accurate. 16% of all mortgage deliquencies are "sub-prime"- that means that about 84% of delinquencies are in "prime" mortgages. Of all of the sub-prime mortgages issued in the past three years, just over 20% are delinquent. So wake up folks- the problem is NOT only in sub-prime loans. Also, the problem with current funding is not that banks and mortgage lenders are hoarding cash. They typically package and then sell their mortgages. Since no one is currently buying these things, mortgage lenders have no funding pipeline or capital to hold additional assets on their books. Finally, regarding the "BIG BAILOUT PLAN" - It is much ado about nothing. It will only cover a small portion of loans. The "1.2 million homeowners", read a little deeper- that is really "potentially up to 1.2 million..." First, it covers only ARMS and only those that have been made in the last two years and have re-sets starting in 2008. From there, rule out anyone with late payments or low credit scores (hmmm, if they didn't have a low credit score, why get a sub-prime loan anyway?). Also, we have to rule out anyone that has a good enough credit situation that they "can afford" they increased payments after the reset. Oh yeah, by the way, these are "voluntary" guidelines, that is, the lenders and MBS holders can just say "no" and that's that. Finally, while this can potentially help up to 1.2 million borrowers, it does nothing for the 2.5 million homeowners that are currently delinquent or the mortgages currently in default.
Posted By: marketwatcher16 @ 12/07/2007 3:37:52 PM

Comment: Daniel, sorry, your report is not quite accurate. 16% of all mortgage deliquencies are "sub-prime"- that means that about 84% of delinquencies are in "prime" mortgages. Of all of the sub-prime mortgages issued in the past three years, just over 20% are delinquent. So wake up folks- the problem is NOT only in sub-prime loans. Also, the problem with current funding is not that banks and mortgage lenders are hoarding cash. They typically package and then sell their mortgages. Since no one is currently buying these things, mortgage lenders have no funding pipeline or capital to hold additional assets on their books. Finally, regarding the "BIG BAILOUT PLAN" - It is much ado about nothing. It will only cover a small portion of loans. The "1.2 million homeowners", read a little deeper- that is really "potentially up to 1.2 million..." First, it covers only ARMS and only those that have been made in the last two years and have re-sets starting in 2008. From there, rule out anyone with late payments or low credit scores (hmmm, if they didn't have a low credit score, why get a sub-prime loan anyway?). Also, we have to rule out anyone that has a good enough credit situation that they "can afford" they increased payments after the reset. Oh yeah, by the way, these are "voluntary" guidelines, that is, the lenders and MBS holders can just say "no" and that's that. Finally, while this can potentially help up to 1.2 million borrowers, it does nothing for the 2.5 million homeowners that are currently delinquent or the mortgages currently in default.
- Posted By: Winter360 @ 12/08/2007 4:30:48 PM
  
  Comment: He's conveying the report accurately, where the deliquency rate among all subprime is given as 16.31 percent. When you begin talking about the proportion of all loans in delinquency that are suprime, that's a different number I didn't see relected in the report, although I suppose you might do the math to deduce it from there. The report does note that 43% of all foreclosured started were with subprime ARM loans that are only 6.8% of loans outstanding - which clearly points to subprime ARM loans as being a special problem. All that said, I don't particularly disagreed with you, in that I don't see this bailout as being effective either.
Posted By: nljs @ 12/07/2007 3:37:42 PM

Comment: To: rightrepublican

As per your personal claims of living a life demonstrating sound money management and a disciplined lifestyle... Great job! Congratulations! Your view, however, is that of tunnel vision. You've failed to address the MILLIONS of individuals in this nation who too, followed a life style-choice similar to yours,completed college, worked their way-up the corporate ladder (60+ hour weeks) who after 20+ years of service find themselves being told that there job is "moving overseas." Unfortunately, there ARE circumstanances beyond on'es control that occur in this life of ours. This includes thee short-sighted decisions of this country's leaders (i.e. NAFTA, international outsourcing of solid-paying jobs, etc,.....), These decisions are ELIMINATING America's middle and upper-middle class. Face it - even good solid money management isn't solving a BIGGER issue of conditions that are positioning individual's to make decisions, that under more BALANCED conditions, they would not even entertain. Please step-down off your high-horse and soap box. You're contributing to the propaganda of those who are raping and pillaging our societies /way-of-life. Instead, spend your time, energy and words to support and save America's MIDDLE and UPPER-MIDDLE CLASS!
- Posted By: angelus1967 @ 12/13/2007 1:26:32 PM
  
  Comment: People like him do not care about the middle and upper middle class nljs. They only care about themselves and if the outsourcing puts another buck or two into thier pockets they are happy. Money is thier god and people should just suck it up and shut up.
Posted By: eames555 @ 12/07/2007 3:08:18 PM

Comment: There are a few factors no one seems to be discussing. For those of us in a paycheck to paycheck world. At most we will see and have been seing pay raises of 3.5 to 5%. Yet, Gas has gone from $1 per gal to $3+. Groceries like wise has increased. The cost to heat your home, Auto Insurance, Home Owners insurance all have gone up. Now the kicker. Healthcare cost. mine went from this year aat $395 a month to $738 a month. Now one does not need a business degree from Harvard to figure out there will be a lot of defaulting going on.
Posted By: rightrepublican @ 12/07/2007 3:00:35 PM

Comment: Kattiedreamer still doen't get it. She can't marry right, she pays for a house she can't afford and she still thinks the solution is to get her credit up.
The solution is to lower your standard of living to that which you can afford. Stay out of debt. Get your husband to pay his share, get a better paying job, or work 2 jobs.. You put yourself in this situation. You didn't plan, you choices are wrong and you are ignorant of the way the system works. Get real, why should there be a second chance for you. I did not get one. I educated myself on how the system works. I know that credit and debt in todays market is just another way of keeping many in slavery. From my point of view, I lent you the money. You agreed to the terms, now I want you to pay me back. Why should I take a loss because you lived outside your means. I don't support a freeze and I will not change my contracts and investments to support fools like you. Regan was right in giving me the oppertunity to make it possible to help you. I took my increased income and lent it out to make it possible for you to have a home. I am not going to lower my life style because your past mistakes. It is obvious that you have not learned. YOu want to increase your credit score. Pay for things in cash. I do. You expected your home to be a source of unearned income, a source of capital gains, or you may even consider it a source of income that would keep on increaseing even though you did nothing to earn it. I, on the otherhand, picked the right investments to make my money on. And if you won't or can't pay, then I am still secured with your house. If I give you a break now, you will only fail again.
- Posted By: angelus1967 @ 12/13/2007 1:24:30 PM
  
  Comment: Typical Repub. It must be nice to plan so well and never make a mistake. It must be nice to never need a second chance. It must be nice to be able to look down on people the way so many of your ilk do.
  Can't marry right? She was supposed to know the man was abusive before she married him? Can you see the future that well? Probably not.
  I can understnd where you are coming from to a certain extent but unless you gave people the money out of your own pocket and followed better underwriting standards than the banks did you are stuck with this "solution". I don't like the freeze either but you do have to admit that the banks did kinda screw people over in some ways. We'll have to see if this works now that we are stuck with it but some people might use the break in a constructive way and NOT fail again.
Posted By: ploughman @ 12/07/2007 2:59:26 PM

Comment: The real underreported story here was touched on in mentioning that real household income has been flat since 1999. Whatever growth has occurred under Bush hasn't benefited most people, just the relative few at the top. And Bush continues the borrow-and-spend GOP tradition that is hammering the dollar now; 73 percent of the national debt was run up under Reagan and the two Bushes.

Instead of getting raises commensurate with productivity like in the old days, workers have just been told to work harder for less. The great postwar housing booms from the end of WWII to the mid-70s were built on fair and rising wages, modest houses and fixed-rate mortgages. Today we have builders oversupplying the high end and ignoring the low end (if the market was so great then we wouldn't need Habitat for Humanity). House prices are still way too high relative to average incomes in most places (not just California and Hawaii!). Instead of income people are having to plug the gap with debt. And of course that's unsustainable.
Posted By: Brilliant! @ 12/07/2007 2:55:43 PM

Comment: This is selective blindness. Sure the homeowner signed up for a bad deal. But the lenders deserve at least half the credit if not more. Who is the more sophisticated financial party in these deals? The lenders knowingly pursued borrowers that they knew couldn't repay these loans.
Posted By: khenson @ 12/07/2007 2:46:08 PM

Comment: Katti, your situation is unfortunate but misses the point. You can wrap any bad decision within the wrapper of bad circumstance and make it sound like it deserves ameliorated ramifications and still be completely wrong in the process.

"Domestic violence... Kids... loss of income... and so I robbed a bank because I needed the money"

"Domestic violence... Kids... loss of income... and so I gambled my paycheck at bingo"

"...and so I signed a bad mortgage hoping my credit would be better in a few years and my income would improve before it reset..."

The point is: it was your decision, your gamble and, sad to say, your loss. People across the world, every day, make bad decisions and pay the price, some with their lives.

It is not, however, the responsibility of anyone other than the decision maker to fix it or suffer the fallout of those decisions. That's called personal responsibility and sometimes taking responsibility for your actions isn't fair.

You may not be at fault here, but you are responsble and yes, there is a difference.

That difference is to look at a situation like this and take some solace in what you were trying to do while accepting the ramifications that accompany the fact that your plan didn't work.
Posted By: Brilliant! @ 12/07/2007 2:42:14 PM

Comment: Let's see, the banks will only make 7% instead of 12%. No that's not right. They won't make anything if the loan defaults. And they may not get all their principle back! Sounds like a bailout for the banks and loan companies to me. Helping the homeowner is an unintended side effect. I think they only want to keep the home borrowers alive so they can continue to suck them dry.
Posted By: whatonearth? @ 12/07/2007 2:41:08 PM

Comment: kattidreamer--what does that have to do with the article? I appreciate the rant, and am sorro for your situation. But who exactly are you talking to? Nobody mentioned you.....
Posted By: whatonearth? @ 12/07/2007 2:39:31 PM

Comment: kattidreamer--What on earth are you ranting about?
Posted By: kattidreamer @ 12/07/2007 2:26:17 PM

Comment: Are all of you snobbish, perfect, 'Stepford' people or completely savy individuals who are so close minded to think that everyone who falls into the subprime category is a complete, ignorant, irresponsible idiot? I know everyone has a 'story' and you can choose to turn your nose up them or not. You're the one who has to live with yourself and your perfectionistic attitudes toward life and, of course, everyone else has to live by the same rules. There are those out there who have been through very unusual circumstances and who have no choice but to fall into that category. As just one example, the ones who have been through domestic violence and were forced to leave and usually to leave an income that was a lot nicer than the one you're left with after he's thrown in jail. Then there are child support issues. A lot of factors affect people in a lot of different ways. As smart and savy as some of us are, things just become lost and out of control when your finances are suddenly rocked and nobody will give you the time of day or a second chance to prove you are worthy of a decent interest rate. I am at least tired of this. We have children to raise and a roof to put over their heads. Most of us don't want to wind up in section 8. Do you? We do what we feel we have to do and sometimes we are in desperate situations. I myself, can afford my mortgage as it is before the two year adjustable takes effect; however, I intend to sell prior to that point because I simply cannot afford the increase that would take place. The freeze would be a blessing for me in order to get my credit up (which I have been continuously working on and improving) to a decent score, so that I could keep my home. I just didnt realize how much of a fight and how long it took to build the credit back up and maybe that is ignorance and I'm guilty as charged. However, I'm a good person. I pay my bills. Sometimes I get a little behind when one of my children has an emergency and I have to come up with extra cash. I am working over 60 hours a week in order to improve my life to get out of this subprime mess; however, time is flying and those two years will be up before I know it. It is a sad situation when you are a good person with good intentions who happened to be in a bad place and suffered consequences. The banks and lenders forced people like us into the subprime market if we wanted to own and not rent a place for our family to live in and ironically the interest rate is high for the people who need to get a second chance with a decent mortgage payment. Anyways, that's my two cents worth. You all have a great day and I hope life never turns a bad corner or at least you are savy enough to get through it with expertise and great knowledge.
- Posted By: responder10 @ 12/07/2007 2:55:45 PM
  
  Comment: Um, KatieDreamer, you who the snob is? you? What the hell is wrong with Section 8 housing? If that is what you can afford given your circumstances, then so be it. Stop whining. Quite frankly, the circumstances you describe would probably account for a small fractional percentage of the people out there who are getting foreclosed on. The reason why we have such a huge mess with houses is because people bought homes they simply could not afford - they never just sat down and looked at the hard, cold numbers. But if you are itching to have that "dream home" and that perfect litte life, then living on easy credit seems to be very alluring to too many people in this country. And that is a personal choice which comes with risk/reward analysis. You take the gamble and you might not win in the end. I personally chose to forgo buying my first home because I many years ago knew that the home values were highly inflated, speculative and unsustainable. My choice was the correct one and believe me, I didn't need a college degree to figure it out.
  Now stop whining.
Posted By: ed98123 @ 12/07/2007 1:17:15 PM

Comment: Sounds like Herbert Hoover during the stock market crash
Posted By: ed98123 @ 12/07/2007 1:16:45 PM

Comment: All of this sounds like Herbert Hoover during the stock market crash.
Posted By: cstoney04 @ 12/07/2007 12:27:09 PM

Comment: I can't believe the gvt is bailing these idiots out. Let them fry or spend a few nights out on the street. Freezing rates for 5 years is only prolonging the inevitable. I have no sympahty for people who can't control their spending or think they should be in a house 10 times there salary just because they can. If you're not smart enough to understand the product or how it works, don't sign the dotted line. As a real estate investor though I've been waiting for this time for the past few years. Nothing better than seeing what foreclosure does to home prices. Only problem is you can't get your hand on any money right now.
Posted By: pinkpanther87413 @ 12/07/2007 11:45:07 AM

Comment: 94000 hired for the Christmas season that's about 1500 per STATE real big deal, temp jobs don't pay unemployment so in Jan 95000 unemployed WITHOUT unemployment! Just another load of Jack Sheite like the houseing problem, protect the lender,shaft the lendee! Like we should exspect different from G.Wawa. Bush and company. Not even a Band-Aid bandaid, he's now using generic bandaids, that don't stick! In the 60s we said "make love, not war" today we say "buy what you can't afford, not make war" and still so arrogent to do both!
Posted By: fishwrap @ 12/07/2007 11:35:23 AM

Comment: Packaging loans and selling them to investors "hides the weenie". As the ratings on those investments remains substantially disconnected from the true nature of the beast - investors will continue to buy. The real-estate and assessment "team" has an interest to see values increase without a basis in reality. Too many people enroll in the fantasy of everybody gets paid... as long as you can find new suckers to buy your story the money will changes hands. Few in control of this enterprise will challenge it because it is a "free market" solution that pays everyone very nicely - for now. Reality sinks in slowly while fortunes are mined from the process. Anybody interested in some tulip bulbs?
Posted By: fishwrap @ 12/07/2007 11:33:11 AM

Comment: Packaging loans and selling them to investors "hides the weenie". As the ratings on those investments remains substantially disconnected from the true nature of the beast - investors will continue to buy. The real-estate and assessment "team" has an interest to see values increase without a basis in reality. Too many people enroll in the fantasy of everybody gets paid... as long as you can find new suckers to buy your story the money will changes hands. Few in control of this enterprise will challenge it because it is a "free market" solution that pays everyone very nicely - for now. Reality sinks in slowly while fortunes are mined from the process. Anybody interested in some tulip bulbs?
Posted By: Dollsong @ 12/07/2007 11:00:31 AM

Comment: I agree that both greedy mortgage lenders and magically thinking consumers are both to blame for some of our current credit woes, but our government is also partly to blame. Deregulation and no oversight gave the credit industry a much wider girth to make money as much as they cared to along with changing bankruptcy laws that made it even more difficult for borrowers in crisis. Everything from appraisors who will say whatever a mortgage company needs to hear to interest only mortgages which were never intended for most consumers became synonymous with home buying and selling. Now that things are falling apart, the government is attempting to put a band-aid on what amounts to an amputated limb. That's all right, though. the middle class never minds picking up the bill for these things.
Posted By: Dollsong @ 12/07/2007 10:55:16 AM

Comment: I agree that both greedy mortgage lenders and magically thinking consumers who rely on the stability of teaser rates is to blame here, but so is the government. Deregulation gave lenders a much wider girth to do whatever they wanted while at the same time changing bankruptcy laws that added insult to injury. Now the government is putting a band-aid on what amounts to an amputated limb to cover for the free reign they gave to the lending industry. That's all right, though. The middle class never minds paying for these things.
Posted By: gvedraft @ 12/07/2007 10:38:26 AM

Comment: The mortgage lenders are directly responsible for the this mess by lending to people whose credit is marginal. Also to blame here is the consumers who are borrowing a lot more than they can afford and not researching and planning for the raise in their mortgage. People should realize that markets dont continually go up. The markets go up and down and America has been riding a wave of increase for years, a correction was bound to happen eventually. Lets be realistic here, people need to be responsible for their actions and if the government comes in and bails them out it teaches us all its ok to be irresponsible. All the government is doing is prolonging the problem down the road for some, and bailing out the irresponsible.
Posted By: walt4gch @ 12/07/2007 10:11:36 AM

Comment: Great comment jhoffman. The Thomas Jefferson quote on the private banking system is so real today. Alexander Hamilton would be proud of the Corporate elite. There are solutions and the American people saying no to Corporate like Corporate is saying no to Customers,consumers,workers, and the American people is the key to ecomomic freedom for all. The willingness of the American people to let corporate have complete control must stop.
Posted By: mrmaps @ 12/07/2007 10:08:11 AM

Comment: We have been hearing about the collapse of the consumer credit market for years and years now. This is the zillionth 'sky if falling'. The collapse is just not going to happen. People are smarter than all these journalists think. There will be always be a few who get caught, but the majority of people seem to be able to manage. I would really like to see different statistics than averages. They are pretty meaningless when most people are more or less ok and only a few are really screwed.
Posted By: jhoffman @ 12/07/2007 9:50:39 AM

Comment: Greed is rampant, both in the unchecked, short term profit mentality of corporate Americe and in the willingness of the American people to allow themselves and their government to go ever deeper into an indebted condition from which there can be no recovery.

Corporate America should be seen as a "Giant Steam Roller" which has crushed our Government Regulatory Agencies and is slowly and steadily squeezing every drop of liquidity out of every consumer. This is why, for many years, I have not considered the soaring stock prices the increase of profits or the growth of consumer spending to be a good sign or a sign of a healthy economy.

Consumers are in fact "Crushed Grapes" with no more ability to consume. Todays "Crushed Grapes" are tomorrows "Grapes of Wrath."
Posted By: walt4gch @ 12/07/2007 9:48:40 AM

Comment: Agree. this is one of many symtoms that is sending Americans into poverty while a few have rooms of cash.
No time now to comment on why i think all this happened, but one can start with 1999 gramm/leach/billey modernization law and a series of other modernization laws in early 2000's.
The solutions to this mess can be found, but corporate will not agree to these solutions. The American people must take our OWN action if Conress will not
Posted By: ColetteDD@ @ 12/07/2007 8:50:40 AM

Comment: Funny thing, no income increases plus much higher debt ration leads to higher defaults! Well duh! All the companies who were so proud of thier consistent stock dividends because of "tight" internal cost control aka - no significant raises for employees are getting the back end result. Employees are more like customers than shareholders and if they're hurting to where they need two jobs just to say afloat/current this is a particularly bad omen. If you're an employer and this scares you, good, about time you felt the effects of those internal cost controls.
Posted By: ColetteDD@ @ 12/07/2007 8:50:18 AM

Comment: Funny thing, no income increases plus much higher debt ration leads to higher defaults! Well duh! All the companies who were so proud of thier consistent stock dividends because of "tight" internal cost control aka - no significant raises for employees are getting the back end result. Employees are more like customers than shareholders and if they're hurting to where they need two jobs just to say afloat/current this is a particularly bad omen. If you're an employer and this scares you, good, about time you felt the effects of those internal cost controls.
- Posted By: angelus1967 @ 12/13/2007 1:07:49 PM
  
  Comment: We in America seem to be moving back towards the days of the robber barons, the days when the haves had most everything and the have-nots worked as hard as they could and got nowhere. It's only a matter of time before the middle class is squeezed out of existence and all we'll have are the rich and poor. Companies are very proud of those dividends but what are they going to do when their workers won't sit for it anymore and you see unions back on the rise? I think that is a day that most companies dread and it may not be so far off.

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Subprimes: From Bad to Worse

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Posted By: Johndavidprince @ 03/17/2008 9:35:49 AM

Posted By: Johndavidprince @ 03/17/2008 9:35:16 AM

Posted By: michelsonB @ 02/25/2008 12:42:55 AM

Posted By: Ahavah @ 12/19/2007 5:48:05 PM

Posted By: yellowkinghill @ 12/08/2007 12:03:20 AM

Posted By: marketwatcher16 @ 12/07/2007 3:39:24 PM

Posted By: marketwatcher16 @ 12/07/2007 3:37:52 PM

Posted By: Winter360 @ 12/08/2007 4:30:48 PM

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