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Significantly more important than the miasma of "financial reform" that recently passed.

http://online.wsj.com/article/SB10001424052748703897204575487661996436070.html?mod=WSJ_hpp_LEFTTopStories

Hmm I wonder if anyone has tried hitting the economy with a hammer, it seems to work with everything else.

And they are covering the entire economy in sytrofoam just to make sure that nothing "bad" ever happens again.

Heh.

Oh dear oh dear... all the complicated rules put us in a mess... how do we fix it? oh yeah... make rules about the complicated rules!

I have a quick fix! NO LOANS! BUY WHAT YOU CAN AFFORD. THE END.

Banks are parasites and society encourages buying more than we can afford and banks just love to loan people money and make a buck off of it. Call me old fashioned but I like my money in cash, and when I buy something I pay for it there, not in interest rates and payment plans and all that stuff that gets people in debt.

From another perspective, I don't think some swiss neutral pusswads should be telling the international community how they are allowed to bank. I don't think there should be any regulations on how people use their money, but then again, I don't trust that people are smart enough to show restraint in their spending either. The financial crisis here is all to do with lending and borrowing and interest and, if I was unscrupulous enough... I would love to just rack up $50,000 in debt only to declare bankruptcy and wipe the slate clean. It's actions like that that got us messed up... Nobody is paying banks back, they just foreclose, so the banks can't pay back their debts and it trickles up the ladder until... wait a minute! where did that $50,000 go? All the money either comes or goes from somewhere... except for bank bailouts, national debts, and bankruptcy, where does MORE rules and commitees (all of whom cost money) do this any good. Redundant unnecessary rules to regulate an already unnecessary system if people would just KEEP THEIR CASH IN THEIR POCKET AND BUY ONLY WHAT THEY CAN AFFORD. As a culture, I guess it serves our irresponsible greedy asses right when we go down in flames economically.

Banks are parasites and society encourages buying more than we can afford and banks just love to loan people money and make a buck off of it.

Just call me the Tick. Spoon!!!!!

Call me old fashioned but I like my money in cash, and when I buy something I pay for it there, not in interest rates and payment plans and all that stuff that gets people i debt.

Yep

From another perspective, I don't think some swiss neutral pusswads should be telling the international community how they are allowed to bank. I don't think there should be any regulations on how people use their money, but then again, I don't trust that people are smart enough to show restraint in their spending either. The financial crisis here is all to do with lending and borrowing and interest and, if I was unscrupulous enough... I would love to just rack up $50,000 in debt only to declare bankruptcy and wipe the slate clean. It's actions like that that got us messed up... Nobody is paying banks back, they just foreclose, so the banks can't pay back their debts and it trickles up the ladder until... wait a minute! where did that $50,000 go? All the money either comes or goes from somewhere... except for bank bailouts, national debts, and bankruptcy, where does MORE rules and commitees (all of whom cost money) do this any good. Redundant unnecessary rules to regulate an already unnecessary system if people would just KEEP THEIR CASH IN THEIR POCKET AND BUY ONLY WHAT THEY CAN AFFORD. As a culture, I guess it serves our irresponsible greedy asses right when we go down in flames economically.

Thats actually just where its meeting. Its an international group of banks and GOs.

My misunderstanding.

Don't you think the entire concept of an 'international banking community' is sort of messed up? We all follow the laws of the United States of America, not France's laws, not England's laws, not (thank allah) Iran's laws, but OUR laws. Why are banks; corporations intended for their own profit, subject to different treatment?

Guitardian wrote:

I have a quick fix! NO LOANS! BUY WHAT YOU CAN AFFORD. THE END. .

Take that housing market !

Guitardian wrote:My misunderstanding.

Don't you think the entire concept of an 'international banking community' is sort of messed up? We all follow the laws of the United States of America, not France's laws, not England's laws, not (thank allah) Iran's laws, but OUR laws. Why are banks; corporations intended for their own profit, subject to different treatment?

I'm sorry Guidy, what are you asking here? Maybe this helps though to note that the US is generally part of Basell and the Fed works in conjunction with it.

on the positive, most of these steps are in line with Canadian banks . Didn't know the world now bows to the awesome might of Canada! MUAHAHA!

reds8n wrote:

Guitardian wrote:

I have a quick fix! NO LOANS! BUY WHAT YOU CAN AFFORD. THE END. .

Take that housing market !

Who needs a car anyway!

It's not like the construction industry really does anything anyway. Damn moochers.

We should just simply let those who are already rich keep the money, they're clearly just better than us.

Education is overrated anyway.

reds8n wrote:

Guitardian wrote:

I have a quick fix! NO LOANS! BUY WHAT YOU CAN AFFORD. THE END. .

Take that housing market !

@frazz... ugh. Canada? ugh.

@red...

Housing market is flawed. Very, very flawed. I have personally known three people in the last year who would have lost their homes but for the fact that the bank doesn't want them back until the market stabilizes. When was the real estate business ever stable though? As far as I can see, an economy works by people producing something, other people wanting it, who pay for it by what they were paid for something else that they in turn produced. When you don't produce anything, just step in as a middle-man in two other people's transaction for your own profit, you aren't constructive, you are parasitic.

When I was living in NYC, I had a landlord I paid $1000 a month rent, who offered me $2000 to break my lease because the property value of the neighborhood went up and he wanted to cash in on it by selling his property there while the market was good for it. How does this make any sense economically? Of course I took the deal, moved out to a rent-controlled apartment that was much nicer and just cost $700 a month (nice to know a rent-controled roommate), I'm sure the landlord took his chunk of change and re-invested it on another property (this was pre-financial-meltdown 2005), rent it out at hiked rates since it is NY after all, and kept turning it over and over with his greedy 'I own stuff for a living' mentality.

I wonder which dumpster he is sleeping in now when the get-rich-quick scheme fell out from under him.

Who is to blame? people buying things they can't afford. Who is to blame for that? well... cultural expectations to have 'nice' things and luxury, but also, the banks that make this sort of thing possible just thinking $$$ now you are in our pocket. Throw in bankruptcy and now you have things that people created, other people can't afford, own anyway, and don't pay their debt. Where does the money go? oh yeah... bailouts. Where does that money come from? Oh yeah... my paycheck.

Frazzled wrote:
on the positive, most of these steps are in line with Canadian banks . Didn't know the world now bows to the awesome might of Canada! MUAHAHA

It helps with your banks maintain solvency in the face of adversity.

I agree that the housing market is flawed... that's one of the reasons, they're bringing in banking reforms and new regulations to try and curtail to try and curtail the worst excesses that got us here in the first place.

But there's a vast difference between that and ""NO LOANS!BUY WHAT YOU CAN AFFORD!". If people -- and banks-- are sensible then a mortgage IS affordable, as are ro should be any loan. Sure we all read about those poor sods who are/were missold policies and schemes -- the whole commission based salary for the sort of work is immensely flawed in thsi regard and one of the reasons why ( in the Uk anyway) they're rapidly moving away from commission based loan deals/similar. Most people cannot afford to drop ££££££s/$$$$$s on a car, or a house. Or medical treatment or for a holiday,a nd it's really only the availability of manageable credit that allows..what ...? 90% + of the population to make these sort of purchases, which, astonishingly enough, is what keeps the economy moving.

I was also especially tickled at the dig against Iranian/Islamic law whilst preaching against loans.

Usury FTW. We'll make a Muslim out of you yet

Before the 1974 Consumer Credit Act (UK) people simply bought less stuff because they could not afford it.

By making credit more easily available, the Act led to increased consumer activity -- buying stuff on tick -- which stimulated the economy, grew jobs and salaries, and made everyone better off.

Then they were able to pay back their debts.

While I agree that people (sometimes) need cars, depending on the area they live, (The most I have ever spent on one was $2000).

Just because you need a car doesn't mean you have to jump up and buy a newer one for $20000 that you make payments on over the next two or three years. Then you get laid off... then you can't make a payment... then you lose the car to repo, and get nothing for your efforts and your investment. OR you could be more responsible and go to a junk lot and buy an older car because hey it works, and you can afford it. I had a '86 escourt I paid $700 for and drove for 3 years before the poor little engine finaly died of exhaustion.

Regarding the construction industry. Yeah they get stuff done. I worked on a 1.5 MILLION dollar home once. It had 3 bedrooms, each with its own bathroom, a giant great hall of a living room. The bathroom off of the 'master' bedroom had separate 'his' and 'hers' closets, each as large as some rooms I rented in college, and the bathtub itself was the size of a walk-in closet. All of this for THREE bedrooms. I wonder how much their mortgage is after the fact? They probably didn't pay 1.5 million bucks up front, so somebody has to be middle-manning it. Meanwhile the scuzzy grunts like me build the thing for $15-$20 an hour, and can barely afford the two bedroom. My generation mostly rents, it doesn't own. Who do they rent from... people who live in houses like that luxury over-the-top unnecessary piece of gak home I built.

Unequal when you think of who did the work compared to who gets to live there. The people who ended up buying the place did not pay up front, and took a 30 year mortgage instead, but hey I was happy to make my $20 an hour for the ability to make this silly waste of money house. So even the rich still take loans for things they don't need. Buy what you can afford.

Why?

You're doing a great job explaining the process behind going into debt, but not doing a great job explaining why that should be avoided. For example, my education is not something I was able to finance on my own, and I certainly wouldn't have been able to earn what I did without it. Why should I have avoided going into debt in order to pay for my education?

Education is a necessity for society to progress, not a luxury like an overly huge house. For some it is a luxury to even be able to get an edumacation, and yes, they need a hand. I imagine you were able to pay back since you stated that you wouldn't make what you do without it. That's an investment, not just a frivolously spent loan. How many college students rack up student loans though who don't get great jobs out of it and end up paying back their student loans working as a dishwasher at Dennys or at a Jiffy Lube (just the two friends of mine that come to mind) or (like my GF, file bankruptcy and getting collection agents calling every other day)? It would be nice if having a degree guaranteed you a job right out of school, but sadly, a BA degree has about as much clout as a GED.

Why is an overly large house a luxury? You gave an example of your landlord earlier whereby he sold a house for profit. In many circumstances, bricks and mortar are much more of a worthwhile investment than sticking your savings into a bank.

That's one of the reasons people buy houses; as an investment, because they know that in most reasonable circumstances they can sell at a later date and make some money and trade up the ladder for a nicer home. Just because we have experienced a once in a lifetime economic depression does not impinge on the principles of capitalism any less.

You answered your own question. Because it is an OVERLY large house. I can respect taking a loan for things you need, and can pay back. But who needs his-and-her walk-in closets off of the master bathroom? That is not a good reason to borrow money. Sure if you can afford to, buy all the luxury you can afford. Keyword being "afford".

Guitardian wrote:You answered your own question. Because it is an OVERLY large house. I can respect taking a loan for things you need, and can pay back. But who needs his-and-her walk-in closets off of the master bathroom? That is not a good reason to borrow money. Sure if you can afford to, buy all the luxury you can afford. Keyword being "afford".

So your argument is not based on anything other than an arbitrary judgement of how big someone's house should or shouldn't be? In the example you gave, it was a 3 bedroom house; fine for a small family. Now, just because it has walk in closets then that somehow makes it 'wrong' to buy it? What if the guy that bought it could afford it no problems? Is it still wrong then because it is too large? What if the guy that bought it sold it a few months later? Is that not a wise decision? Just because he had to take a mortgage to buy it isn't a valid reason to disparage; as has been pointed out, very few people have hundreds of thousands of $s in one go. They have a deposit of say 10% which is enough to secure the property and then the borrowed amount is costed based on affordability criteria by the bank.

In my case, me and the wife bought a 4 bedroom detached house before we knew of the arrival of our first child. Is that somehow wrong because it was too large for us? I bought the house right at the nadir of the housing crash so I fully expect to make a fair amount of return on the purchase if and when we decide to move. This is pretty much what capitalism is founded on; speculate to accumulate. Your arguments don't really make much sense. To be perfectly frank, it sounds like you have a chip on your shoulder about the fact that people can and do get mortgages and loans to buy nice houses and cars and you can't/don't.

No I live just fine thank you. No chip, other than at one point I wasn't living quite as well.

I just think that borrowed money and debt (which is what a mortgage is, just with a different name) should be spent wisely. Luxury items like fancy cars, expensive jewelry, huge mansions, etc are all good and well if someone wants to and CAN pay for them, but shouldn't be a reason to get into debt. A house large enough for your potential future family is an investment, not a luxury. Nobody really needs a mansion for a small family, yet they took out a mortgage on it. They went into debt for the sake of luxury. That's just dumb.

ITT banking reforms with no palpable effects to be seen for at least five years and Guitardian doesn't know how market economics work and thinks that debt is an inherently bad thing.

Guitardian wrote:No I live just fine thank you. No chip, other than at one point I wasn't living quite as well.

I just think that borrowed money and debt (which is what a mortgage is, just with a different name) should be spent wisely. Luxury items like fancy cars, expensive jewelry, huge mansions, etc are all good and well if someone wants to and CAN pay for them, but shouldn't be a reason to get into debt. A house large enough for your potential future family is an investment, not a luxury. Nobody really needs a mansion for a small family, yet they took out a mortgage on it. They went into debt for the sake of luxury. That's just dumb.

Guiti has the way of it. In celebration I bring you...WEINIER PUPPY SLEEPING!!!




Automatically Appended Next Post:

ShumaGorath wrote:ITT banking reforms with no palpable effects to be seen for at least five years and Guitardian doesn't know how market economics work and thinks that debt is an inherently bad thing.

...and?

reds8n wrote:

Guitardian wrote:

I have a quick fix! NO LOANS! BUY WHAT YOU CAN AFFORD. THE END. .

Take that housing market !

Shantytowns, here we come!!!

No, debt is not an inherently bad thing.
Unnecessary luxury debt is a bad thing. Debt moves an economy, loans make it possible for money to move. The thing that caused the current financial headache is debt for living beyond means, not paid back, trickling up the ladder.

It's always been a longheld ambition of mine to be a slum landlord.

Carpe diem ? Pff... Carpe Jugulum FTW !

Frazzled wrote:

Guitardian wrote:No I live just fine thank you. No chip, other than at one point I wasn't living quite as well.

I just think that borrowed money and debt (which is what a mortgage is, just with a different name) should be spent wisely. Luxury items like fancy cars, expensive jewelry, huge mansions, etc are all good and well if someone wants to and CAN pay for them, but shouldn't be a reason to get into debt. A house large enough for your potential future family is an investment, not a luxury. Nobody really needs a mansion for a small family, yet they took out a mortgage on it. They went into debt for the sake of luxury. That's just dumb.

Guiti has the way of it. In celebration I bring you...WEINIER PUPPY SLEEPING!!!




Automatically Appended Next Post:

ShumaGorath wrote:ITT banking reforms with no palpable effects to be seen for at least five years and Guitardian doesn't know how market economics work and thinks that debt is an inherently bad thing.

...and?

Wiener puppy has the right idea. I just want to tickle him awake so he'll bark his opinions now. Awwwwwww so cuute! (yeah I'm like a 5 year old when it comes to puppies and kittenz and so on) He is right for sleeping through this financial BS without a care in the world. One day he'll be having to pay for your medicare though.

Guitardian wrote:No, debt is not an inherently bad thing.
Unnecessary luxury debt is a bad thing. Debt moves an economy, loans make it possible for money to move. The thing that caused the current financial headache is debt for living beyond means, not paid back, trickling up the ladder.

Exactly.

reds8n wrote: It's always been a longheld ambition of mine to be a slum landlord.

Carpe diem ? Pff... Carpe Jugulum FTW !

No quote Terry Prattchet FTW. Carpe Sub Ube.

I know you were being sarcastic (at least I hope so) but actually most of my landlords over the years have been rather lax about fixing places up when something goes wrong. It seems like most landlords just buy several properties and rent them out for profit and don't really get around to doing any maintenance until suddenly your rent check isn't in their mailbox on time. (one time we went 20 days with no hot water! at least that guy had the decency to return our deposit, a rare thing) so you aren't far from the truth about real estate investment.

Some confusing article wrote:Even though the agreement deals with complex mathematical formulas and exotic financial products, its details will have implications for consumers and businesses all over the world.

I sort of stopped at this point. Sort of on topic, did you know banks have to ask if you want them to approve your purchases on debit cards that would put your account negative? Fewer over drafts for the masses!