12 replies to this topic

[bullshort]

http://www.federalre...904/default.htm

Fed is now extending it's encouragement of Moral Hazard from instituitions to Joe6Pack.


Appropriate loss mitigation strategies may include, for example, loan modifications, deferral of payments, or a reduction of principal.

Geez, i should have bought a few more houses. Prudent financial management - screw it !!. That's too old fashioned. This ain't capitalism by any means.

P.S - All this has got nothing to do with my view of stock markets. I remain a LT bull.

Is your point that the only pupose this press release serves is to notify J6P that he has plenty of room to negotiate? Unless I am really dense, I see no other useful purpose since of course the institutions are going to explore whatever means they have to mitigate losses. What am I missing?

[OEXCHAOS]

http://www.federalre...904/default.htm

Fed is now extending it's encouragement of Moral Hazard from instituitions to Joe6Pack.


Appropriate loss mitigation strategies may include, for example, loan modifications, deferral of payments, or a reduction of principal.

Geez, i should have bought a few more houses. Prudent financial management - screw it !!. That's too old fashioned. This ain't capitalism by any means.

P.S - All this has got nothing to do with my view of stock markets. I remain a LT bull.

Is your point that the only pupose this press release serves is to notify J6P that he has plenty of room to negotiate? Unless I am really dense, I see no other useful purpose since of course the institutions are going to explore whatever means they have to mitigate losses. What am I missing?

Indeed. Who should pay the price of these lending practices and deceiptful agreements? Those who borrowed or those who lent? We KNOW borrowers are getting bagged, but I think that it makes sense to make sure that borrowers get a bit of relief and that lenders suffer a bit of pain--especially if it makes sure that the "unwind" doesn't bag the rest of us.

M


And I don't want to see any more politics in this thread. Naughty-naughty!

[outsider]

"What's the worst that can happen to me if things go wrong?" In the long term I'll be dead, anyway. Seems to be philosophy of lenders and borrowers alike to a much greater extent lately. Keating scandal, Mexico default and Chrysler bailout were all covered by the taxpayer as I recall. Chrysler paid back taxpayers if I remember. Others were absorbed by the taxpayer because the government had no choice; defaults that are big enough bring down the whole system and the powerful squirrels that control most of the wealth KNOW it, even PROFIT from it. Sad to say. Penalties were laughable for the powerful even for those that were punished.... Boesky, Enron, Worldcom execs in country club prisons for short periods get to keep their hidden wealth and receive maybe a slap on the wrist like being denied the luxury of being the fox in the henhouse again..... IMHO. Out