mortgage bailouts- maybe I am just stupid or something

[bluebayou]

I just don't understand what the big deal is.  Maybe I am just dumber than a box of rocks.  Maybe I don't understand the question.

But here are my questions:

1.  As a lower, middle-class, $40000/year white male with $80000 mortgage why should I care if some bank some where is going to fail due to overextending their credit and having high debt to net worth ratios?

2.  If said bank goes bankrupt then.............so what?  Someone comes in and buys their debts and assets at pennies on the dollar.  All of their lendees are still going to be paying their mortgages to the new owners. 

3.  If these greedy corporate flacks were to busy overextending themselves and their companies fail then........I am sorry for the little guy who works for them, but SO WHAT?  Their companies fail.

Why does anyone have a responsiblity to bailout some mortgage banks?  What about all of the other businesses that fail every year?  So if I am a dumbass and run my <hypothetical> electrician business to bankruptcy then the government is obligated to save me?

I don't buy the arguement that the world will end. 

[Graybeard]

Beats me. I see it about the same as you. I've had so many different folks own the mortgage on my house I have to look on the coupon to see who the check goes to each month. It seems that buying and selling mortgages is a favorite pass time of banks. Sooner or later it'll go around and the folks who originally loaned me the money will buy it back. BTW They only kept it about two months before the first sale of it.

I just can't see how this whole thing is a big deal. It's less than $450 per capita which really is no big deal period. We've wasted that much money in Iraq already and at the rate we're spending it there it will likely double that by the end of next year.

The politicians are owned lock, stock and barrel by big money and those big money folks want this bail out so they can get richer and that's the only thing I see of it. Since they do own those politicians they will get the bail out too and what "we the people" want will play no part in it.

[gdolby]

Good day to all. I am with Blue and GB on this one. I don't understand the wheretofores of why this will effect the "common" man. I remember when the stock market reached its highpoint and then seems like not too long ago it made a record falling. I never knew the difference. My freezer was still full of beef, pork, wild game that I had put there. My bank account didn't rise or fall. I am aware of my ignorance on these matters. but I just don't see how it can effect someone that doesn't have millions invested in these firms that have gotten theirselves in trouble. I have seen many businesses fail and then when they were bought and reopened, did well. This Fannie and Freddy and AIG are a lot bigger but does this exclude them from that happening ? or if they do go completely under cant someone reopen a smaller one to take their place and hopefully manage it to where it will survive?

[Mikey]

"Someone comes in and buys their debts and assets at pennies on the dollar".  Nope, that isn't going to happen this time.  Large numbers of banks did this: bought up debt and mortgages and even sold 'mortgage backed securities' to larger overseas money lenders because it was all financed by the hard-working American home-owner and mortgage payer-offer - a blank check so to speak and all based on the ability of the average American to pay off his or her mortgage debt, but not this time because...

"All of their lendees are still going to be paying their mortgages to the new owners".  No they won't.  So many people who mortgaged themselves in over their heads have defaulted on their mortgages that the property they mortgaged is now worthless and nobody wants to buy it, not even the Chinese or Saudis or other middle easterners - it is just too expensive. 

So, mortgages just sit.  Homeowners are not paying their mortgages; some have given up, moved out and are back living with the folks - others have just gone back to something they can afford - like an apartment - and have declared bankruptsy.  Some even have the brazen gall to continue to live in their 'hundreds of thousands of dollar' homes without paying the mortgages because the banks that held the mortgage have failed and their isn't anyone to toss them out.  And even if there was, do you really think the liberals would tolerate banks throwing people out onto the street for not paying their mortgages without trying to get the rest of us to pay for it.

The mortgage debt in this country is so huge it was considered a worthwhile investment overseas, but no longer.  So many American homeowners defaulted on their mortgages that both the debt and their property hold no value.

This wasn't Bush or the republicans, it was an unregulated market that allowed people to over-extend their buying power and go into debt way beyond their ability to pay off that debt.  It was their own stupidity (read the fine print) as well as the typical lack of scruples of the average real estate agent and mortgage broker.

The democraps want to blame the reublicans for not allowing people to do what they either wanted to do or were too dumb to understand.  They want the government to control the market, and that is straightforward communism and the stupid dems do not understand it. 

I don't believe we should bail out those banks and wall street but unfortuantely, the debt is so massive as to be nearly incomprehendable. 

However, I believe the debt should be secured but that wall street, not the taxpayer, should pay it off.  JMTCW.  Mikey.

[Brett]

A friend sent me this economic bail out program.
This idea sounds just crazy enough to possibly work, so
> naturally it won't be given serious consideration. How
> great is our bureaucracy!!
>
> I'm against the $85,000,000,000.00 bailout of AIG.
>
> Instead, I'm in favor of giving $85,000,000,000 to
> America in a We Deserve It Dividend.
>
> To make the math simple, let's assume there are
> 200,000,000 bonafide U.S. Citizens 18+.
>
> Our population is about 301,000,000 +/- counting every
> man, woman and child. So 200,000,000 might be a fair stab at
> adults 18 and up..
>
> So divide 200 million adults 18+ into $85 billion that
> equals $425,000.00.
>
> My plan is to give $425,000 to every person 18+ as a We Deserve
> It Dividend.
>
> Of course, it would NOT be tax free.
>
> So let's assume a tax rate of 30%.
>
> Every individual 18+ has to pay $127,500.00 in taxes.
>
> Tha t sends $25,500,000,000 right back to Uncle Sam.
>
> But it means that every adult 18+ has $297,500.00 in their
> pocket.
>
> A husband and wife has $595,000.00.
>
> What would you do with $297,500.00 to $595,000.00 in your
> family?
>
> Pay off your mortgage - housing crisis solved.
>
> Repay college loans - what a great boost to new grads
>
> Put away money for college - it'll be there
>
> Save in a bank - create money to loan to entrepreneurs.
>
> Buy a new car - create jobs
>
> Invest in the market - capital drives growth
>
> Pay for your parent's medical insurance - health care improves
>
> Enable Deadbeat Dads to come clean - or else
>
> Remember this is for every adult U S Citizen 18+
> including the folks who lost their jobs at Lehman Brothers
> and every other company that is cutting back. And of course,
> for those serving in our Armed Forces.
>
> If we're going to re-distribute wealth let's
> really do it...instead of trickling out a puny $1000.00
> ( 'vote buy' ) economic incentive that is being
> proposed by one of our candidates for President.
>
> If we're going to do an $85 billion bailout,
> let's bail out every adult U S Citizen 18+!
>
> As for AIG - liquidate it.
>
> Sell off its parts.
>
> Let American General go back to being American General.
>
> Sell off the real estate.
>
> Let the private sector bargain hunters cut it up and
> clean it up.
>
> Here's my rationale. We deserve it and AIG doesn't.
>
> Sure it's a crazy idea that can 'never work.'
>
> But can you imagine the Coast-To-Coast Block Party!
>
> How do you spell Economic Boom?
>
> I trust my fellow adult Americans to know how to use the
> $85 Billion We Deserve It Dividend more than I do the geniuses
> at AIG or in Washington DC
>
> And remember, The Birk plan only really costs $59.5
> Billion because $25.5 Billion is returned instantly in taxes
> to Uncle Sam.
>
> Ahhh...I feel so much better getting that off my chest.
>
> Kindest personal regards,
>
> PS: Feel free to pass this along to your pals as it's
> either good for a laugh or a tear or a very sobering thought
> on how to best use $85 Billion!!

[magooch]

Just one problem; the math is wrong.