Do you think there could be a second Great Depression?

[1961MJS]

It never really was theirs for a good amount of the defaults. They lied about their incomes and a host of other things. Some of these frauds were aided by their loan brokers and they need to be held accountable---but you can't cheat an honest man.

Hi

it was mainly the banks (under pressure from the gov). A friend of mine with an ex-wife who after 10 years is still ruining his credit, told me this. He and his new wife both had small homes, both sold them at a profit. She was out looking for a new home, making $55,000 a year. She found a $260,000 home she liked (1.5x annual salary??) and asked dear hubby if she should put in a offer, he said sure go for it. They let her have the loan with a $55,000 income. She shouldn't have gotten the loan, but they gave it to her. This was less than 10 years ago, and the house is paid off, but the bank was STUPID. His salary wasn't on the loan at all, he has a near zero credit score.

Later

 

[PrettySquareGal]

Here's my story on credit. I had an AMEX (Au or Pt, don't remember). I had it for ~13 years and it had a really high max on it. My wife and I were both making the best money we had ever made (at the same time). A few years ago, I get this call from AMEX, they wanted to re-verify my finances. I asked why - we pay the bill off every month, right? "Yes sir, you do. But we've determined that the amount you spend is more than you should have". I said "Really? So are you accusing me of being a drug dealer or something?" She said "No, but we just need to verify your income and your wife's income again". *Note that we paid all of our bills using the AMEX, and then made one payment every month - it was very handy, and cost us nothing. I told her that there was no way in h3ll I was going to do that - my account is on-time and I have a perfect record. She said "I'm sorry Mr. XXXX, but if you don't do this, we'll have to cancel your account". I said to go right ahead, which seemed to stun her. "OK, you have ten days before it shuts off". Good I said, so be it. And sure enough, they did.
For me, that was my wakeup call in regards to credit. We have paid off all but one card, and a couple store cards we use for clothes for the kids/grandkids, etc. I was really good with money as a kid - that is, I saved and bought things cash. I wasn't stingy, but I was a lot smarter with it. I'm trying now to get back to that way of life, and they don't make it easy. It's a government sponsored evil IMHO. And people really should stop using it. I don't see it happening though...

It's safer than debit cards, though, because credit cards are virtual money whereas your debit card is access to your bank account balance. While generally both checking and credit accounts have fraud protection, it can take a long time to get your "real" money back into your account (from experience long ago). Also, many CCs offer buyer protection if an item is not as described- you can do a chargeback if needed. Finally, the one I use earns me cash back.

But I do pay it in full every month.

 

[Atticus Finch]

When I bought my current house in 1998, I qualified for a much higher loan than I had asked for. I told the loan officer there was no way I would borrow the amount his bank was offering because I also wanted to eat once in a while and maybe have electricity, too. Without even the slightest hesitation, Mr. Loan Officer told me that most people borrowed the extra amount and either bought new furniture or bought a new car. He said to do so was a good financial move because the interest on the house loan was tax deductable.

Dang…why didn’t I think of that!

AF

 

[ButteMT61]

The same thing here AF. We planned that if we both lost our jobs - which could happen - we wanted to pay our mortgage with the crappiest of jobs. In retrospect, we were smart to do so. Still working am I, but I get more fearful as each day goes by...and I don't have a car payment either.

 

[LizzieMaine]

People *trust* bankers, loan officers, financial professionals because the system tells them they should. "I'm a specialist, it's my job, it's what I'm trained to do. I advise you on the best course to take based on my training and expertise."

The system trains people to accept that authority. "Look at him. He's got a nice suit, a nice haircut, a nice office, he's so friendly and helpful and cares so much about my getting the best deal. He's nothing at all like some sleazy fly-by-night grifter. Maybe I should listen to what he has to say, after all, he's an Expert. It's not like, oh, he's getting a commission or anything...."

Now, if you're wised up enough you know you can't trust a finance specialist any more than you can trust a sideshow carny. But most people just know what the nice man in the nice suit tells them. Because if you don't trust the financiers, you must be a Commie or something.

 

[jamespowers]

Hi

it was mainly the banks (under pressure from the gov). A friend of mine with an ex-wife who after 10 years is still ruining his credit, told me this. He and his new wife both had small homes, both sold them at a profit. She was out looking for a new home, making $55,000 a year. She found a $260,000 home she liked (1.5x annual salary??) and asked dear hubby if she should put in a offer, he said sure go for it. They let her have the loan with a $55,000 income. She shouldn't have gotten the loan, but they gave it to her. This was less than 10 years ago, and the house is paid off, but the bank was STUPID. His salary wasn't on the loan at all, he has a near zero credit score.

Later

Well that is true too. A house I sold many years ago was a government (FHA) loan deal. They defaulted a few years ago. Go figure.

 

[sheeplady]

I think there's enough blame in the crisis to go around and lay some on every party involved.

I do feel sorry for people who bought homes they could afford and have lost them or have risk of losing them because of the crash (losing their job, not being able to sell, etc.).

I don't feel sorry for anyone who was greedy and had their greed rewarded with loss- and that happened everywhere in the system. Sadly, very few people seem to be learning their lesson. And for many of the greedy people, they basically lost nothing. So much for life lessons.

 

[LizzieMaine]

Basically the whole finance industry over the last thirty years or so has adopted the policy and the level of moral responsibility of the Kingfish: "You bought a stucco house -- an' under the law, that makes you the stuck-ee!" And we're an entire nation of Andy Browns.

 

[jamespowers]

Basically the whole finance industry over the last thirty years or so has adopted the policy and the level of moral responsibility of the Kingfish: "You bought a stucco house -- an' under the law, that makes you the stuck-ee!" And we're an entire nation of Andy Browns.

As with everything else, the lowering of standards is responsible.

 

[ButteMT61]

As with everything else, the lowering of standards is responsible.

We don't need no stinkin' standards!

 

[Atticus Finch]

Basically the whole finance industry over the last thirty years or so has adopted the policy and the level of moral responsibility of the Kingfish: "You bought a stucco house -- an' under the law, that makes you the stuck-ee!" And we're an entire nation of Andy Browns.

Until I got to the end of your post I thought you were quoting Huey Long!

AF

 

[LizzieMaine]

Even *that* Kingfish would have been much preferable to what we got now. At least he wanted to *share* the wealth, not steal it.

And yes, Bro. Powers is exactly right -- it really is a question of an entire system that's thrown away standards in favor of the fast, filthy buck. As Malcolm X once said, it's like hiring Jesse James as your bank president and then wondering where all the money went.

 

[Atticus Finch]

He's always been one of my heros...but he might have been willing to steal a little wealth, too. But just a little.

AF

 

[LizzieMaine]

Oh they say he was a crook...
But he give us free school book.
Tell us, why is it that they kilt Huey Long?

Now he dead an' in his grave,
But we ridin' on his pave',
Tell us, why is it that they kilt Huey Long?

 

[Paul Roerich]

Oh they say he was a crook...
But he give us free school book.
Tell us, why is it that they kilt Huey Long?

Now he dead an' in his grave,
But we ridin' on his pave',
Tell us, why is it that they kilt Huey Long?

Cesar Chavez reminds me of Huey Long -- in the good and the bad sense.

 

[jamespowers]

"One of the most dangerous men in America."
Well, not now anyway.

 

[jamespowers]

Cesar Chavez reminds me of Huey Long -- in the good and the bad sense.

You mean he created a secret police force and consolidated state employees under his control, typically taking a portion of their earnings as "contributions" to his war chest as well?

 

[Paul Roerich]

You mean he created a secret police force and consolidated state employees under his control, typically taking a portion of their earnings as "contributions" to his war chest as well?

He probably would have, if given a big enough opportunity. To me, the two men seem to have been cut from the same fishy cloth. Didn't Huey Long receive kickbacks too? In any case, Chavez's predecessor already had a secret police force in place, so it wasn't a stretch for Chavez to create his own.

 

[LizzieMaine]

As far as Huey goes, I have mixed feelings about him. He was a demagogue and a potential dictator, but he also brought Louisiana into the twentieth century, and did his damndest to run the KKK out of the state: "You tell that Imperial ba***rd not to set foot in Louisana, and when I call him a ba***rd I'm not calling him a name but referring to the circumstances of his birth." You've got to admire that aspect of his personality, which did little to endear him to the rest of the good ole boys from the Hookworm Caucus.

 

[jamespowers]

He probably would have, if given a big enough opportunity. To me, the two men seem to have been cut from the same fishy cloth. Didn't Huey Long receive kickbacks too? In any case, Chavez's predecessor already had a secret police force in place, so it wasn't a stretch for Chavez to create his own.

Yes, Long received kickbacks from the very secret police force that I mentioned. lol lol These were taxpayer funded by the way.
From the Democratic Underground:
"He came across as a populist, but his maneuvering behind the scene was despicable. Huey Long was in Louisiana politics for one reason and one reason alone: Huey Long.

Read some more recent historical works that expose the empire Long built to benefit himself. The working class bought into it, meantime Long swilled Dom Perinon in the mansion that the working class unknowingly built for him. "
Well, at least when he said elect "The Crook" he was being honest.