Will Someone, Anyone, Tell Sarah Palin to Shut Up
About her, cough, foreign policy experience. Craps sake she's the governor of Alaska....670,000 people in the whole state. Yes its geographically close to Russia but I must have missed the news flash where she single-handily averted a Russian invasion. I suppose if she were governor of Hawaii (BTW Honolulu's population runs around 900,000 people), we'd have to hear that she had experience because she was governor of the Island in the Pacific, and had experience dealing with Japanese tourists.
I Know I Know
The big news should be about the house not passing the big bill, and yes, as you can imagine I'm about as happy about this as I was about hearing the debate of how the debate went and who won. Both sides (Republican and Democrat) said they had reached an agreement and vote was just going to be a formality. The republicans claim that they were set to vote for it, but decided not to when they heard Nancy Pelosi talk. The Democrats are saying that it's the Republicans playing partisian politics.
Get this people they're both playing a game, and we're the ones that are going to lose. When your FICO score goes down because the bank that holds your credit cards decreases your limit, which means you'll pay more for car insurance, more points on loans, your personal buying power diminishes. You think this is just about a wall street bailout....think again...this is bigger than main street and wall street. Your FICO score is based on your available credit and your ability to pay bills, so if you have a credit card, with a 10K limit, and you owe 1000...your FICO score if you pay your bills on time will be higher than a person who makes more money, has a 30K limit and owes 20K.
Both sides are talking about the "fat cat" CEO's and this is just to protect their salaries...another wake-up call...they've already been FIRED! That doesn't mean the bill wasn't without problems, it was but those were very small, compared to the implication of doing nothing--which is what they're doing. My 401K is gone, but that's okay because I'm not retiring soon but what about the people that are? I think everyone needs to wake up, shake the sleep from their eyes and demand that our government do what they need to do.
© 2008 Whimsical Ranter
All Rights Reserved
Monday, September 29, 2008
Friday, September 26, 2008
Question of the Day (Maybe the Month or Year even!)
Are We Capitalists or Socialists?
That is a question that perplexes me and I'm not sure what the answer is anymore, ten years ago I probably could answer that question much quicker. Today, I don't know the answer. Should banks fail (including my bank which I love)? Should the government be bailing out AIG, under the idea that its failure would adversely affect the world economy? As someone that does believe in capitalism I'm finding it difficult to wrap my head around an all out bailout with or without restrictions. Businesses that make poor choices close all the time for example, a restaurant won't thrive even in the best of neighborhoods if the food isn't good or is highly overpriced to what the average person will pay.
If a bank, in the business of lending money, lends money to people they have a good idea won't be able to pay it back (as was the case with most of sub prime mortgages) isn't that a bad business decision? Now I understand that this is a bitter pill to swallow, especially for the thousands of people facing foreclosure and I'm very sorry for them that they might lose their homes. That said, I feel the government's idea of buying those mortgages is a horrible idea for any price.
Breakdown Go Ahead Give it to Me
Lets say someone makes 60K a year or roughly $4600 per month before taxes wants to buy a house, under the old rules they would have to save 20% of the price for a down payment, and pay no more than 1/3 of their monthly income. That means simply put you can afford a house priced around $240,000. Instead with the sub-prime these people were qualifying for a loan for a house double that price, or $480,000. So now that these people have figured out that they can't afford these loans and they don't want to lose their houses the government is trying to work out a deal to buy those bad mortgages from the lenders that issued them. They will work to let the people refinance into a "traditional" loan so they may keep their houses.
So, lets go back to our hypothetical, and lets say that these people can refinance that $480,000 loan. First lets all recognize they put very little or no money down, and have not been paying any principle for the past 4 years so they don't owe $480K. It's more like $520K. Now remember they only make $4600 a month, so where are they going to get the money to pay the new mortgage bill of $3117.66 (that's 30y fixed rate of 6% interest)? A 40 year mortgage wouldn't save them that much about $256 dollars.
So how is this going to help them? Unless they forgive the past four years and offer them a loan at the original $480 at a 40-year rate that is lower than I would pay with excellent credit...they might make it at a little less than half of what they make. However the real question is still unanswered. How is the so-called bailout going to help these people? Short answer is that it won't.
Of Mice and Men
We can't consider ourselves capitalists until the economy goes into the toilet and is being flushed, then say wait a minute, we can't let that happen. We also can afford to bail out everyone, some will fall like WaMu who just late yesterday had their 300 billion dollars in assets seized by the FDIC and sold for 1.9 billion to JP Morgan Chase. Surprisingly I have no problem with this because it was sold, all the depositors money is still there (even those over 100K) and they handed out flyers to customers entering the bank this morning and put a notification on their (Washington Mutual's) website. It won't cost taxpayers anything and the FDIC can return to their jobs of watching other failing banks.
Maybe those people are just lucky they were banking with a bank that the FDIC felt was too big to fail completely and the amount it could have costed taxpayers would have been atronomical.
The bailout is more about global markets so that money can keep moving. If someone owns a business and needs to make an important improvement, they normally need to borrow money to do it. If they can't borrow, the business could fail, employees will lose their jobs. Think of George Bailey and the Building and Loan in holiday classic It's a Wonderful LIfe, when there was a run on the bank, George exclaimed that their money was in 'Sam's house or Dave's house..." you, I'm sure get the idea.
Money has become a virtual thing, no one really sees it anymore but I think that's going to change. Will there be a depression? If there is a bailout probably not but we still can't avoid a deep recession, if there isn't a bailout, then it does become likely.
This all said though, we always want people to be accountable for their actions, right or wrong, and that's not what is going on now. Lenders were irresponsible, the goverment was irresponsible, the brokers and everyone else that lined their pockets instead of doing what was right. If that means things fail, change and hit rock bottom then nothing will change it.
We call a huge downslide on Wallstreet today a Market Correction (meaning stock prices went too high too fast and must come down) maybe what we need is an Economic Correction?
In any event the debates are about to start and I for one am relieved that McCain changed his mind and decided to attend and very interested to see what both have to say.
© 2008 Whimsical Ranter
All Rights Reserved
That is a question that perplexes me and I'm not sure what the answer is anymore, ten years ago I probably could answer that question much quicker. Today, I don't know the answer. Should banks fail (including my bank which I love)? Should the government be bailing out AIG, under the idea that its failure would adversely affect the world economy? As someone that does believe in capitalism I'm finding it difficult to wrap my head around an all out bailout with or without restrictions. Businesses that make poor choices close all the time for example, a restaurant won't thrive even in the best of neighborhoods if the food isn't good or is highly overpriced to what the average person will pay.
If a bank, in the business of lending money, lends money to people they have a good idea won't be able to pay it back (as was the case with most of sub prime mortgages) isn't that a bad business decision? Now I understand that this is a bitter pill to swallow, especially for the thousands of people facing foreclosure and I'm very sorry for them that they might lose their homes. That said, I feel the government's idea of buying those mortgages is a horrible idea for any price.
Breakdown Go Ahead Give it to Me
Lets say someone makes 60K a year or roughly $4600 per month before taxes wants to buy a house, under the old rules they would have to save 20% of the price for a down payment, and pay no more than 1/3 of their monthly income. That means simply put you can afford a house priced around $240,000. Instead with the sub-prime these people were qualifying for a loan for a house double that price, or $480,000. So now that these people have figured out that they can't afford these loans and they don't want to lose their houses the government is trying to work out a deal to buy those bad mortgages from the lenders that issued them. They will work to let the people refinance into a "traditional" loan so they may keep their houses.
So, lets go back to our hypothetical, and lets say that these people can refinance that $480,000 loan. First lets all recognize they put very little or no money down, and have not been paying any principle for the past 4 years so they don't owe $480K. It's more like $520K. Now remember they only make $4600 a month, so where are they going to get the money to pay the new mortgage bill of $3117.66 (that's 30y fixed rate of 6% interest)? A 40 year mortgage wouldn't save them that much about $256 dollars.
So how is this going to help them? Unless they forgive the past four years and offer them a loan at the original $480 at a 40-year rate that is lower than I would pay with excellent credit...they might make it at a little less than half of what they make. However the real question is still unanswered. How is the so-called bailout going to help these people? Short answer is that it won't.
Of Mice and Men
We can't consider ourselves capitalists until the economy goes into the toilet and is being flushed, then say wait a minute, we can't let that happen. We also can afford to bail out everyone, some will fall like WaMu who just late yesterday had their 300 billion dollars in assets seized by the FDIC and sold for 1.9 billion to JP Morgan Chase. Surprisingly I have no problem with this because it was sold, all the depositors money is still there (even those over 100K) and they handed out flyers to customers entering the bank this morning and put a notification on their (Washington Mutual's) website. It won't cost taxpayers anything and the FDIC can return to their jobs of watching other failing banks.
Maybe those people are just lucky they were banking with a bank that the FDIC felt was too big to fail completely and the amount it could have costed taxpayers would have been atronomical.
The bailout is more about global markets so that money can keep moving. If someone owns a business and needs to make an important improvement, they normally need to borrow money to do it. If they can't borrow, the business could fail, employees will lose their jobs. Think of George Bailey and the Building and Loan in holiday classic It's a Wonderful LIfe, when there was a run on the bank, George exclaimed that their money was in 'Sam's house or Dave's house..." you, I'm sure get the idea.
Money has become a virtual thing, no one really sees it anymore but I think that's going to change. Will there be a depression? If there is a bailout probably not but we still can't avoid a deep recession, if there isn't a bailout, then it does become likely.
This all said though, we always want people to be accountable for their actions, right or wrong, and that's not what is going on now. Lenders were irresponsible, the goverment was irresponsible, the brokers and everyone else that lined their pockets instead of doing what was right. If that means things fail, change and hit rock bottom then nothing will change it.
We call a huge downslide on Wallstreet today a Market Correction (meaning stock prices went too high too fast and must come down) maybe what we need is an Economic Correction?
In any event the debates are about to start and I for one am relieved that McCain changed his mind and decided to attend and very interested to see what both have to say.
© 2008 Whimsical Ranter
All Rights Reserved
Thursday, September 25, 2008
The Biggest Mistake
What is He Thinking
I heard on the news yesterday that McCain is canceling the debate Friday because of the economy being in, well the shitter. While the notion is admirable that he wants to return to the senate to do the work that needs doing; he also needs to remember that he's running for President not the senate. What a huge missed opportunity to debate Obama and explain why his plan is better or where the failings lie and what he would have done to change it, or stop it from happening all together.
On a very serious note do we want a President that won't discuss with the American people what he feels needs to be accomplished. I understand that speeches and debates are two different things however both provide a venue to speak ones mind. The latter provides an opportunity to ask follow-up questions and critique what they would do differently.
More to come on financial crisis from me maybe tomorrow about I feel this bailout isn't going to be all that helpful.
© 2008 Whimsical Ranter
All Rights Reserved
I heard on the news yesterday that McCain is canceling the debate Friday because of the economy being in, well the shitter. While the notion is admirable that he wants to return to the senate to do the work that needs doing; he also needs to remember that he's running for President not the senate. What a huge missed opportunity to debate Obama and explain why his plan is better or where the failings lie and what he would have done to change it, or stop it from happening all together.
On a very serious note do we want a President that won't discuss with the American people what he feels needs to be accomplished. I understand that speeches and debates are two different things however both provide a venue to speak ones mind. The latter provides an opportunity to ask follow-up questions and critique what they would do differently.
More to come on financial crisis from me maybe tomorrow about I feel this bailout isn't going to be all that helpful.
© 2008 Whimsical Ranter
All Rights Reserved
Friday, September 19, 2008
And I was Walking Down the Street One Day…
Wall Street Woes
The mortgage crisis is reaching its apex, or is it? Each day companies whose primary business was lending money or jumped upon the lending bandwagon, seem to be going belly up in today's hard economy but why? Because they put profits of today against the wellbeing of the economy for tomorrow, or rather they gambled and everyone lost. Now we have Obama blaming Bush and while he has a right to his opinion, just like everyone else, I'm sorry to say this but he is more to blame than Bush is (as is McCain), after all it's congress that regulates the industry not specifically the white house. They're calling for Alan Greenspan's head on a platter, saying it's all his fault. But who is really to blame?
Four years ago, I worried about the economic future but I was alone in those worries since time and again people told me it wasn't my problem or their problem if the mortgage industry went belly up. We had a huge influx of people getting mortgages for more than house than they could afford. They could put no money down, and pay only the interest for so many years gambling that their house value would continue to rise in value. So that 3000 sq ft, home they couldn't afford, suddenly seemed wonderful and with all the extra money they'd save they could afford to fill it full of furniture and buy that Labradoodle for the kids.
The Blame Game
Fast-forward 4 years and they're in foreclosure blaming the banks; other banks are closing or may close, stock reduced to junk status. So who is to blame in this debacle? I think it's just greed plain and simple. The government (meaning Freddie and Fannie) had NO business getting involved with the sub prime mortgages but people were screaming that they couldn’t get a house despite the low interest rates. Freddie and Fannie took the bait and dove head first into the shallow pool, and after that other lenders thought the same, why not. It was a gamble, a bad gamble, and we all ended up the losers.
The Fallout
So, where do we go from here or will there be a recession, depression, inflation, deflation, or total economic collapse? If you watch any of the cable news organizations that seem to thrive on conflict, not to mention doom and gloom you might believe that you should pull your money out of your bank and put it into your mattress. The argument for that is fairly persuasive.
I don't however think it's very practical but that being said if your bank is in trouble you can do things to minimize the headaches.
- Stop direct deposits
- Research your banking options online.
- Remove funds in order of potential problems, accounts with over 100K and familiarize yourself with the FDIC rules. For example if you have a joint (two account owners) account, you are actually covered up to 200K.
- Market Rate (Money Market) accounts are NOT FDIC insured. Investments are not FDIC insured.
- Certificate of Deposit (CD) accounts are FDIC insured but tend to have hefty penalties for early withdraw. Understand your options.
Most of the larger "safer" banks have "free" checking, so research what their restrictions are, and you can open an account with as little as a hundred dollars. Other questions might include ATM fees, charges for bill pay, and online banking charges.
© 2008 Whimsical Ranter
All Rights Reserved
Wednesday, September 10, 2008
This Post Has No Title
Wacky Wednesday
I'm not sure what to call this post because it's going to seem like a hodge-podge. The kids are officially back in school now, and life seems to truck along until I turned on the TV and see the images of planes crashing into the world trade center and realize it's almost September 11.
Of course this means not only am I stuck with all matters political because of the election, but on all my other channel haunts (History, Discovery Channels, etc), because of the endless shows about 9-11 conspiracy and day. I still can't bring myself to watch movies made about that day, which were on all through the weekend.
So, I Watched
Both the Democratic convention and Republican convention and it needs to be said that anyone undecided shouldn't bother watching ANY convention because they're all just preaching to their choirs. That said I found much more bashing with little substance from the republicans and that really surprised me. They must have mentioned throughout the week Obama's name a MILLION times, always too the appropriate "USA" or Boo's or Cheers…But what they didn't say was more important. Aside from drilling here and now, they offered NO real plan for the future. They were too busy discussing what is wrong with other side.I also don't understand why his running mate is such a "superstar" I mean she's been governor since '06 and was a mayor of a small Alaskan town before that. The whole Alaskan population is only 670,000! Compare that to Los Angeles, where you have 9 MILLION people living. I'm not that impressed. She hasn't held a public office long enough to know if her "changes" are good or bad for the state. But the republicans are insistent that she is more qualified for office because she's run a state Government as opposed to Obama who has not. Let's not forget that McCain is the man actually running for president and he's been a senator for a 25 years, and has NEVER been a governor, mayor or anything else. Well, except a POW, and military guy and that isn't exactly the same as running a state.
I did watch Senator Edward Kennedy speak, and I have to say first off it was nice seeing him considering the news media have him on his deathbed. Aside from that, I really enjoyed what he had to say. He didn't bash McCain but spoke about the future and what all Americans should do. I loved the idea of young people in public service, and enjoyed someone else asking what has happened to the American "can do" attitude using the space program as example.
Obama's speech was very good, and I'm glad he did say more about what we need to do to fix our economy, though I don't agree with everything he said.
The republican convention was rather overshadowed by the hurricane, but still interesting. I caught a snippet of the first lady talking but it seemed to be more Obama bashing than substance, as did Palin later in the week. McCain's speech was dry, and frankly too long and to me lacked substance. It also made my skin crawl when he added an R to the word Washington…which was roughly half the time.
As I said when I started this segment, the conventions shouldn't be a platform for anyone undecided to make the choice of who to vote for. It's nothing but a giant pep rally that the media pays way too much attention to.
© 2008 Whimsical Ranter
All Rights Reserved
Tuesday, September 02, 2008
Hi Again
Whimsical Ranter not available right now because she's busy watching the Republican Convention. At the tone please leave her a message and she'll get back to you.
Beeeeeeeeeeep!
Beeeeeeeeeeep!