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To: Oblomov who wrote (163540)	5/3/2002 8:25:40 AM
From: orkrious	Respond to of 436258

Ho Ho Ho, time is running out on the buck. quotes.ino.com

To: Oblomov who wrote (163540)	5/3/2002 9:35:30 AM
From: reaper	Read Replies (2) \| Respond to of 436258

<<Then these loans will never get made. >> That is perfectly fine with me. I am not uncomfortable legislating against prostitution, or against drug use. I am not uncomfortable with the FDA turning down a drug that helps 25% of disease sufferers but has bad side effects for others. I am not uncomfortable having a rule in my little league that kids can't slide head first, and can't run over the catcher at home plate. There are times when people have to be protected from themselves, and this is one of them. Loaning money to people at 20% interest rates when nominal wage growth is under 5% is morally reprehensible as you have completely eliminated the opportunity for these people (on average) to build any WEALTH. <<Or, if the government forces a bank to lend (effectively nationalizing the banking system), then good credit borrowers would be forced to pay a much higher rate of interest to effectively fund bad credit and low income borrowers. >> I am NOT advocating that the gov't force a bank to lend to bad credits. I am saying bad credits should not be lent to. Yes, there are those handful of "bad" credits that can use that credit to build a better life, but the vast majority simply dig themselves a bigger hole. Think of the bogey you have to get over to cover 15% interest rate payments. And don't tell me "well, people did fine when rates were that high in the early '80s"; nominal wage growth was over 10% at that time. With nominal wage growth at sub 5% you can't get out from under 15%+ loans. <<These type of lenders have ALWAYS existed - but previously only as pawn shops or loan sharks. >> Totally different. With a pawn shop you have to actually turn over your asset, and with a loan shark you knew you'd get your head beat in with a baseball bat if you didn't pay. The risks were very well known, and obvious, and some people chose to take them anyway (though "loan sharking" to my knowledge is illegal). With the sub-prime lenders, the risks are totally obfuscated and most people truly don't understand what they're getting into. Cheers