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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#1
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OK, just saw on the news that congress has
passed a bill to help out the mortgage "crisis". Numbers were "300 billion dollars to help 400,000 families avoid foreclosure". My long division is a little rusty, but I come up with $750,000 per family. WTF????? |
#2
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On Sun, 27 Jul 2008 01:22:01 GMT, "BillM"
wrote: OK, just saw on the news that congress has passed a bill to help out the mortgage "crisis". Numbers were "300 billion dollars to help 400,000 families avoid foreclosure". My long division is a little rusty, but I come up with $750,000 per family. WTF????? ================ Just calling something a homeowner rescue does not make it one. The entire bill was 694 pages long, and contained huge amounts of authorizations, enabling clauses, etc. that were never mentioned in the press, and it is doubtful if anyone understands the entire bill, or has even read it. To see what was in this abortion click on http://www.americanbanker.com/media/...SenateBill.pdf Google on "Coconut Road" or "Farm Bill" to see how huge bills that no one reads [or was alloed to read] has been abused. Be reminded that there are at least three "official" groups that need rescuing, in addition to the management of Freddie and Fannie, there a (1) The GSE [government sponsored enterprise] stockholders (2) The GSE bondholders and derivative counter parties (3) The people that bought those big houses with option ARMS that are in the process of resetting. There is a fourth "shadow" group, the banks and other mortgage lenders [e.g. GMAC/Diatech/ResCap] that have enormous mortgage exposure without any government guarantees. While separate, this group is critical in that their financial structure is both a "house of cards" and has been allowed, even encouraged, to become so enmeshed with the overall economy that these are too big to fail in the aggregate, and so interconnected that independence is simply a book keeping dodge, and its all aggregate. For example, a GMAC default would bring down both GMC and Cerrebus, and Cerrebus is the owner of Chrysler. The automotive industry is highly dependent on consumer credit, and major default would cut off almost all consumer credit, bringing the entire US automotive industry, domestic and foreign owned to a standstill. Also be reminded that the wise guys in finance, after unloading their GSE shares on the pension funds, mutual funds, and individual investors, have been shorting Freddie and Fannie, driving the stocks down to single digits. Your arithmetic appears to be correct in that the house/senate compromise, which would go into effect when a temporary increase in the conforming loan limit expires at year end, would put the loan limits at $625,500 or 115% of the median house cost, whichever was lower. Traditionally, it has been considered "safe" for a couple to service a mortgage equal to about 2-1/2 times their annual combined incomes. In round numbers the median family income in the United States is 50,000 per year, thus a 625,000 $ mortgage is equal to 12.5 times annual median income. Ignoring the insurance and property tax escrow payments, this is a sure receipt for disaster, and is simply digging the hole deeper for all of us. Additionally it was assumed that the borrowers had put some money down, indicating they could manage money, because they had accumulated the down payment [traditionally 20%]. Working the other way, a median family income of 50,000$ per year indicates that the safe mortgage load with escrow payments would be a maximum of 2.5 X 50,000 or 125,000$. The median asking price for, or existing mortgages on, houses in almost all metro/urban markets is far above this. The scam will work like this. (1) Treasury and the Fed will inject enough hot air, and the SEC will impose short sale restrictions to stabilize the GSE stock prices, and to a degree cause a "dead cat bounce" at least until after the elections. FWIW there never was any type of government guarantee on the stock prices. (2) Government has made it official that the CDOs are fully backed by the taxpayer. The much larger problem IMNSHO is the huge derivative exposure, which is unknown at this time. (3) If a homeowner is upside down with a option ARM that is about to reset, the GSE will issue a new guaranteed mortgage, with the condition that the loan holder accept a "short sale" or write down to current real estate values, and issue a fixed rate mortgage. The interest rate and other conditions are still unclear, and it may well be that we are simply providing more rope to people that should have never bought a house [or such an expensive house] and who in many cases have lost their jobs because of the economic downturn. If the owner sells [much] later at a profit, they are supposed to split the profit with the government, but it is unknown if this will be adjusted for inflation. The lenders get guaranteed mortgages, and transform bad debt into assets. Most of the money involved was conjured up by fractional banking, so even with the paper loss, in real terms, the lenders still make out like a bandit, and can deduct the "bad debts" and "write downs" from later taxable income. As even these adjusted values will far exceed the 125,000$ median safe mortgage, little has been accomplished for the homeowner except to buy them a little time. FWIW -- an analysis of many of the Sub-primes, alt-As, and Option ARMs indicate that the majority of borrowers in trouble [c.70%] were not naïve, first time, minority home buyers, but people who assumed that they would be able to refinance with fixed rate mortgages before the ARMs reset, or who were planning on relocating. The popping of the bubble and credit crunch prevented this. The management of the GSEs also require "rescue" because any time a business failure of this magnitude occurs, it is SOP for the FBI/IRS/SEC to immediately begin preliminary forensic investigations into possible criminal activity. There appears to have been very significant accounting irregularities at both entities, with huge management bonuses being paid for illusionary accomplishment. Even more of a problem is the massive political contributions the GSEs and the management have made to all members of congress that have supported them, and the considerable organizational animus against any opponent of the status quo. Even a cursory investigation would uncover/document the many money ties between members of congress and the GSEs. It is highly unlikely that 300 billion $ will be enough for the current "rescue," and considerably more taxpayer money will be required to cover these debts/costs. No foundational changes have been made such as prohibiting any institutional or individual political contributions or campaign activity, derivative activity/speculation has not been prohibited, and jumbo mortgages, far beyond 2-1/2 times median family income, are still allowed. In short this is another bubble waiting to be inflated and popped. Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
#3
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Heard there was something added at the last minute to require all
credit card companies to report all CC transactions to the IRS as well- going after all the Ebay/PayPal transactions that are getting by tax free because there is no W2 or 1099 involved presently |
#4
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![]() "Gerry" wrote in message ... Heard there was something added at the last minute to require all credit card companies to report all CC transactions to the IRS as well- going after all the Ebay/PayPal transactions that are getting by tax free because there is no W2 or 1099 involved presently Simply open a off shore bank account on the internet and have paypal send the money there. Then use a debit card linked to that account to pay your bills. Best Regards Tom. |
#5
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On Sat, 26 Jul 2008 22:10:58 -0700 (PDT), Gerry
wrote: Heard there was something added at the last minute to require all credit card companies to report all CC transactions to the IRS as well- going after all the Ebay/PayPal transactions that are getting by tax free because there is no W2 or 1099 involved presently ========== This indeed seems to be the case. If you down load the pdf file at http://www.americanbanker.com/media/...SenateBill.pdf look at page 681 to the end. This was tacked on as a "revenue offset." I started to read the bill but my eyes glazed over, and who knows what was slipped in at the last minute or even after the passage of the bill.... Reality is starting to intrude on the Capitol, and they just can't believe there is no money left because they spent it all, therefore the taxpayers must be cheating. Welcome to the "brave new [third] world order" where all the growth industries are in the "underground economy." Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
#6
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On Sun, 27 Jul 2008 10:32:01 -0500, F. George McDuffee
wrote: Reality is starting to intrude on the Capitol, and they just can't believe there is no money left because they spent it all, therefore the taxpayers must be cheating. Unka' George [George McDuffee] Don't kid yourself. "Reality" won't intrude on the people in Washington even as the rope is being placed around their necks when we are hanging them. They will have no idea why we are angry and will view their hangings as a great injustice and a personal insult to their "integrity". They were, after all, merely engaged in exercising their "rights" to be an egregious overhead cost that sucked the vital economic competitiveness right out of the USA. I downloaded that 695 page bill too. How many of the idiots that will be voting to adopt or nix that thing will even have read it and be aware of its complete ramifications? None....that's how many. Dave |
#7
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On Sun, 27 Jul 2008 20:25:57 -0400, wrote:
snip that will be voting to adopt snip Its a done deal -- passed on Saturday, only needs the Prezes signature. http://www.washingtonpost.com/wp-dyn...072701167.html This issue just dropped off the radar screens in the major US media, however for details see http://english.vietnamnet.vn/interna...008/07/795741/ What a cramp to have to use oveseas sources for US news. http://www.startribune.com/local/259...ghtMod ules:1 http://www.foxnews.com/story/0,2933,391583,00.html http://search.live.com/news/results....the_senate_1x1 Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
#8
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On Sun, 27 Jul 2008 20:25:57 -0400, wrote:
snip that will be voting to adopt snip Some more info on the "home owner" rescue package. Its a done deal -- passed on Saturday, only needs the Prezes signature. This issue just dropped off the radar screens in the major US media, however for details see http://www.telegraph.co.uk/money/mai...nusecon128.xml What a cramp to have to rely on over seas sources for detailed US news. Note that the 300 billion$ estimate was *JUST* to [start] rewrite the option ARMs to fixed rates. The US debt limit was raised by 800 billion, and there is *NO* limit or cap on this entitlement program for the "tin cup" corporations. Q: Can I incorporate myself to get preferential treatments from Washington? Real people seem to count for nothing. Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
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