I don't ascribe 401k's to political parties. It was the means to get many Americans to believe that the interests of Wall Street coincided with their own. That's a fairly recent phenomenon, and a fallacy. I note that many Democrats are for "change" - as long as it doesn't affect their personal 401k. There is a hypocrisy there.
Sure. They always think they're safe. Part and parcel with "American Exceptionalism." Personally, I never felt I was better than a Chinaman. And here we are. Content?
Global economy and keeping one's own infrastructure and job market strong are not incompatible. Our politicians and policy makers couldn't manage that.
Perhaps you're right. I noticed it more in the '90's. On magazine covers mostly. First time pure pencil pushers became lionized. The history of hedge funds is a good guide to map the increasing fraud on Wall Street.
Hasn't that been the Republican party platform for the last 3 decades? (if it is good for big business, it is good for you)
I'm not sure why you apply that hypocricy to the Democrats. I think the 'change is only good if it benefits me' is a universal theme.
This week it is hedge funds...a few decades ago it was Savings &Loans. the late 1920s and the 1930s had their own issues. ebb and flow...and bubbles will always be unavoidable...but the government needs to be more vigilant about managing the size of the bubbles.
Perhaps but everything he has done since is added trillions to the counties debt, because he was to stupid to learn from history.
The way to grow an economy is to cut tax RATES, not spend trillion we do not have to try to buy votes. Cutting tax RATES worked to turn around the economy EVERY TIME it was done, by Kennedy, Reagan and Bush and even way back in the twenties!
You are correct, but one the reason was Ford was selling around 400,000 Explorers, per year for around five years, during the mid eighties and they had been in service for nearly 20 to 25 years. The average mileage on them was close to 400,000, no wonder the owners purchased another Ford!
So did the mortgage broker. The mortgage brokers told them that they could refi again in a few years. Sometimes the mortgage brokers told them that their ARM was a fixed-rate mortgage. They didn't give the people a chance to look at the paperwork before signing it, or the required time to back out of the contract.
The problem was that people were taking advantage of other people.
Perhaps in some cases. In other cases, the only thing said was "fixed rate mortgage."
To understand this, they have to be told this. They weren't.
So they were lied to or misled.
That's the bottom line. That not only applies to houses, but it also applies to cars, clothes, computers, big-screen TVs and vacations. The main reason that the amount of money consumers owe went down in the last year is because of all the right-offs.
Most of the Fords that people got rid of were older SUVs. Since during the 90's Ford Explorers were by far the selling SUV is it any surpirse that they were one of the leading vehicles that were traded in? Six of the top ten vehicles traded in were old 12 to 16 year old Explorers. Maybe that is a clue that Fords are pretty reliable. The most pruchased clunker replacement car was a Ford Focus.....
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If you are trying to claim that there was a set improvement that you had to achieve in order to qualify for the clash for clunkers program, then you are wrong. There wasn't a qualifying level of imporvement. You just had to trade in a vehicle on the list of qualifying clunkers and buy a vehicle on the list of qualifying replacements. The improvement in gas mileage between the two was irrelevant. So older Corollas wouldn't qulaify, but older 4Runners would. The same was true with regards to Focus' and Explorers. The only reason older Toyota trucks weren't on the list of most tradde clunkers is becasue they sold so few in the first place. If every 4Runner sold in 1996 had been traded in as a clunker, they still wouldn't have made the top ten. There jsut weren't enough of them left around to qualify. And of course, given the love some people have for Toyotas, they might have been considered to valuable to trade in as a clunker. A vehicle needed to be on the list AND be worth less than the rebate. I suspect that many owners of 1994 4Runners might believe their vehicles to be worth more than $4500. I doubt many 1994 Explorer owners were so foolish. (for the record, kbb lists a 1994 Explorer with a trade in value of around $700, a 1994 4Runner has a trade in value of a round $1200).
Very few of the Cash For Clunkers cars were 25 year old models, though many of the newer Toyota models were not eligible simply because they already got good gas mileage. In the end, 5 of the top 10 most junked cars were FORD, 3 Mopar and 2 Chevy.
Ford didn't start selling Explorer SUVs until 1990 (1991 Model year). There were no (or at least very very few) Explorer SUVs in service for
20 years when the cash for clunker program started. The most traded in vehicle was a 1996 Ford Explorer. Which still says a lot about how reliable Explorers were and how prolific they were.
Very few people go first to a lender to get advise on what they can afford. Most home buyers are looking for and finding the home first, then going to the lender and asking 'how do we make this happen'. In many cases, the only way the lender can get them into that 'home of their dreams' is with some backended mortgage with an ARM and/or balloon payment.
I haven't seen any stats on education level of people that are currently in foreclosure. Do you have a cite for that? I would advise everyone to stay away from believing anything a new home developer says, as they are about on par in honestly level as used car salesmen. I would advise everyone to stay away from taking financial advise from a real estate agent says, as they are not particularly knowledgeable about anything.
Yep...such is the cycle of an economy. It will rise and fall no matter what amount of regulation is in place. The only thing regulation can do is nip off the extent of the peaks and valleys. I do think that government regulation should step in and make it less advantageous to buy a home that the buyer is not intending to live in...and to crack down on all the liars that claim that they will live in the home when they are really buying it for flipping/renting/investment opportunity.
Banks are perfectly willing to lend right now. What they don't want to do is lend to people with no/little downpayment when the current mental state of the populace is that a person should not have to make payments on a home if the home has no equity. I'm not sure why people have that mindset, especially in a world where people routinely buy new cars that lose 25%+ of their value the moment they drive off the lot.
Agreed. Also insane is the ever increasing length of mortgages...10 year...then 15 years...then 20 years///then 30 years...and now 40 year loans are making their way towards becoming the new norm.
Look at the most traded-in versus the most-purchased lists. This program was a boon for Toyota and Honda. At least most of the vehicles purchased were made in the U.S..
People used the program to get rid of their Ford, GM, and Chrysler vehicles, with five of the top ten vehicles traded in being Fords, three being Chrysler's, and two being GMs.
...and at the time, that was correct. In fact, the banks were counting on people refinancing every few years. Every refinancing cycle generates numbers/income for the bank. that refinance also allows the borrower to pay off all the unsecured debt they ammassed on their credit cards. The problem is, eventually the whole industry reaches a point where home values no longer go up every year. That point is reached when people aren't buying anymore...a point where home values peak at the same time (and largely because) unemployment also starts increasing significantly.
I don't really believe that to be the case, but if you do believe it then the solution is to make people take a class and pass a test before being allowed to own a home; just as is required for the license to drive a car.
I don't believe that, either. People are given the time to read. people choose not to take that time of their own accord.
Yep. Consumers were lying to the banks about their income and their debt in order to get loans that they knew they could not afford. They did this because they saw everyone else that was buying 'over their heads' was getting 'free money' through rising home values.
Another regulation that should be put in place for home buying is for people to be required to submit several years of tax returns. The ability to buy should be directly tied to the income that gets reported to the government. If you are a small businessman that lies on your tax return so as to avoid having to pay your fair share of taxes, then one of the penalties will be that you cannot get the home that you can afford, much less the one beyond what you can afford.
It is absolutely ridiculous that people can go in to get a loan and declare themselves to have tice the income (or more) than what they claim on tax returns...and then the government works to bail them out when they cannot afford to make their mortgage payment.
I don't buy that...but then I also don't buy into the idea that people are signing a piece of paper with the interest rate and the words 'ARM Adjustabe Rate Mortgage' and the reset terms/timing written right on the page, but they sign without reading any of it...and you still want to blame the bank and claim that the people are not given the time to read it? Is there no place for personal responsibility?
Insurance costs and tax rates are tied to the value of the thing being insured/taxed. If the value of the thing rises, the costs to insure it and pay taxes on it will also rise. I agree that there are likely people that do not know this...one more reason to force people to take classes and pass tests before being allowed to own land/home.
If by 'lied to' you mean that they lied to themselves. When people tell themselves that their income is going to keep going up every year and they will eventually be more comfortable they need to more honestly look at that claim. If they plan to have kids or retire soon, for example, then they need to realize that their 'income' will be going down, not up. ...and anyone buying a home with the feeling that they can refinance in a couple of years to try and catch up on their debt....well, those people are gambling and they know it.
Unfortunately, yes, people have not actually become any more responsible. The even bigger problem is that IF people became more responsible with their spending, the economy will have even more trouble recovering...so there isn't much incentive for the government, the banks, or the merchants to try and encourage responsibility.
Yes...12 to 16 year old cars is a far cry from the claim that they were 25 year old cars. Really, isn't it a bit sad that 12 year old cars are headed for the junk yard already becasu ethey owners are ready to chuck them on the scrap heap? The vehicles being junked most (Ford Explorers) had lost almost all resale value in just over a decade.
Why? All cars should last a decade...most do it without being in such piss poor shape that they have no resale value and their owners want to dump them in the trash for a few bucks discount on a newer car.
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Out of date data covering only thr first week or so of the program. Only a couple of Ford even made the Top10 for purchased vehicles while half of the top 10 for junked vehicles came from Ford.
If you car got over 18MPG, then it wasn't eligible as a clunker. That limit alone took many of the Toyota/Honda/Nissan/etc... models out of contention for this financial welfare. Ford Explorwers, on the other hand, moved to the top of the list because of their lousy gas mileage.
That is not true. The amount of the rebate was tied to the amount of gas mileage improvement.
We agree: If a vehicle still runs well, owners are less likely to deem it a clunker worthy of the scrap heap.
Yep. Vehicles with any significant resale value coulnd't be cashed in as clunkers.
What makes you think a 1984 Explorer, that actually came to market in July of 1983, is not a 25 year old model? Even if one only drove 15,000 mileage it would have nearly 400,000 miles on the odometer. Even a 1989 would have almost 325,000 miles.
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