Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (86580)	9/25/2008 1:52:58 AM
From: Sr K	Read Replies (1) \| Respond to of 116555

Let's say 3 houses were appraised in 2005 at $300,000 each. One buyer put up 5% and got a first mortgage for $285,000 and the seller put up the other $15,000 (or he got a HELOC for 15k), The 2nd buyer put up 20% and got a mortgage for $240,000 and the 3rd buyer put up 50% and got a mortgage for $150,000. Now the houses are worth $200,000 and it is projected that they will bottom at $180,000. The first buyer has reduced principal by 4%, the second one by 6% and the third one by 10%. If the government "funded" the first two mortgages so they are down to 80% of $180,000 or $144,000, the one who leveraged the most gets the most subsidy. The third buyer doesn't need any help because his mortgage is down to $135,000, so he gets nothing. A gift is taxable income, so a mortgage reduction has tax consequences. It may be a "Stunningly obvious question" but the answer is not obvious. - a partial solution could include lowering rates. A 3% "government" mortgage could let the payment on the original value mortgage be about the same as a 7% mortgage on $180,000, except that the lower value is needed to get property taxes in line.

To: NOW who wrote (86580)	9/25/2008 2:21:26 AM
From: benwood	8 Recommendations Read Replies (2) \| Respond to of 116555

tooearly, it's simple: There's a huge segment of society that believes it is just plain wrong to help others in need, and that's what paying the mortgages amounts to. I've seen it in my kids school, where fundraising is avoided if it will benefit too many kids in need. I couldn't figure this out for the longest time, but it is a very deep animosity towards people of lesser means. And here we have the grandest example of all. While it may be completely unacceptable to do something with hard earned tax dollars to benefit somebody in real need, it is OK to hand over hundreds of billions or trillions the very thug class that has nearly brought down our country. To see Bush stand there and say the same stuff in the exact same way as he promoted the invasion of a sovereign nation, Iraq, and not have our collective guts clench from realizing that, by god, we are being bamboozled again, and to be so pathetically weak and unimaginative that we roll over and say, please be gentle, I must say we are getting what we deserve. Or if not, we are getting what Congress and the Administration believe we deserve. The millionaires and billionaires at Goldman Sachs are certainly getting what they feel they deserve. A trillion dollar mulligan off the backs of what can perhaps best be described as slaves of the new American Century.