The All Things Political Topic - We hang the petty thieves and appoint the great ones to public office

[Gfted1]

2 hours ago, Hurlshort said:

If I borrow a million dollars at 4% for a home loan, which is pretty normal in the Bay Area, I will pay the bank $700,000 in interest over the life of the loan. That is considered a good rate. It's not a great system for the homebuyer. It is massively profitable for the banks.

AND those sonsabitches expect people to repay the loan within 30 years! Thats completely unreasonable and should be at least doubled. Until we get some sweet UFH, my proposal would HALVE the monthly mortgage costs allowing more Americans to become homebuyers.

[Gromnir]

3 hours ago, Hurlshort said:

Are salaries increasing 12%-18% every year? 

How does the average homebuyer keep up with those profit margins that the banks are expected to get off their home loans?

If I borrow a million dollars at 4% for a home loan, which is pretty normal in the Bay Area, I will pay the bank $700,000 in interest over the life of the loan. That is considered a good rate. It's not a great system for the homebuyer. It is massively profitable for the banks.

but it ain't massively profitable for the bank if we accept your description. assume you got one million dollars to invest. chances are you can do better than 4% return. so what is the motivation for a bank to lend to hurl and other homeowners if they may invest that money elsewhere for better return? 

bruce may be a less than ideal representative o' the western capitalist pov, but am thinking some folks ain't being complete fair. US banks is in the business o' making money. *shock* sure, more than a few lenders indulge in predatory schemes and banks such as wells fargo were active indulging the worst used car salesman approach to many o' their accounts. here in the US we had more bank regulation, right up until bill clinton. george bush (43) tried to claw back some o' the regulatory oversight power o' the fed which clinton surrendered and his own party turned on him... which no doubt would feed into @Guard Dogand his they are all bad narrative. regardless, for all the terrible stuff banks do, your example is so not a great illustration o' such evils. for the most part banks ain't hiding their lending scheme for home owners and is not as if they is forcing other credit products on you when you take out a mortgage. thanks in part to minimal bank regulations (damned socialists) you may get a home loan on your personal residence at a noticeable better rate than you would for investment property or business, so in and of itself, the banks ain't making massive profits on the loans... which is exact what is the reason banks did all kinda stoopid in the early and mid 2000s to turn minimal profitable loans into larger profits... same kinda stoopid banks is doing yet again in 2022 btw. 

if hurl can do better with a $1 million dollar investment, why should the bank be prevented from doing so?

am agreeing there is many systemic obstacles to home ownership which ain't fair, obstacles which is predictable resulting in increasing income disparity and decreases in home ownership for each new generation. it isn't fair. however, what hurl describes ain't the problem.

HA! Good Fun!

Edited August 30, 2022 by Gromnir

[Chilloutman]

17 minutes ago, Gromnir said:

if hurl can do better with a $1 million dollar investment, why should the bank be prevented from doing so?

because if hurl fail his investment tax payer will not have to pay him out

[Gromnir]

26 minutes ago, Chilloutman said:

because if hurl fail his investment tax payer will not have to pay him out

won't happen for the bank either. a single bad loan by a mega bank does not result in auto government forgiveness. however, you are correct that big banks and auto makers and any number o' too big to fail enterprises exist. sorry, but that is the stark reality o' the situation and is indeed not fair. if OMNI bank and a similar half dozen banks were to go t!ts up, near all americans would suffer. hurl goes under and is only hurl and his family which suffers. regardless, the single loan scenario is not doing you or hurl favours.

HA! Good Fun! 

[alanschu]

9 hours ago, Hurlshort said:

Are salaries increasing 12%-18% every year? 

How does the average homebuyer keep up with those profit margins that the banks are expected to get off their home loans?

If I borrow a million dollars at 4% for a home loan, which is pretty normal in the Bay Area, I will pay the bank $700,000 in interest over the life of the loan. That is considered a good rate. It's not a great system for the homebuyer. It is massively profitable for the banks.

Housing is particularly complicated because it includes a lot of challenges about the reality of "housing is an investment that you use to secure your retirement" as well. Meaning that governments contain an incentive to ensure homeowners (skewing older and a more consisting voting demographic) do not lose value in their homes because it will end up being very catastrophic towards the equity of that group.

Combine that with "housing as an investment" means that there is also capital that goes into it with limited (and sometimes no) intention of it ever being used to actually house people. Combine this with government policy that is protective of home values and you get both an increase in demand (a safe, good investment) and the commensurate reduction in supply since houses get snatched up. This pushes the costs up. Additionally complicated that often house construction efforts and other attempts to redress the situation is resisted by varying degrees of NIMBYs as well as those that recognize that it will make the investments less appealing.

We can point to 2008 housing crisis which saw a lot of people make a lot of money flipping junk investments and banks themselves saw that they were largely bailed out in the response to them having big dollar signs in their eyes.

 

EDIT: This doesn't include the various ways things like AirBnB have also warped both the supply/demand for housing to the detriment of anyone that doesn't benefit from appreciating value of property.

Edited August 31, 2022 by alanschu

[BruceVC]

20 hours ago, Elerond said:

Or maybe go with Swedish model where home loan is not mean to be paid back ever as people pay them back for 50+ years. 

I call it system where banks rent properties to people but don't need to suffer from any obligations of landlord

Elerond I was about to say " Elerond please dont try to fool people with Swedish socialist doublespeak " but then I thought about this loan payment scheme and it may make sense 

So the idea is you have low monthly payments because the loan is over 50 years but I assume you cant make renovations to the house easily because the bank still owns the house? And I imagine people dont go around selling property easily because you wont make much money unless you have paid off  most of the 50 years loan?

But it means most people can get a house because the monthly  payments are low, that must be why they do this?

[BruceVC]

5 hours ago, Chilloutman said:

because if hurl fail his investment tax payer will not have to pay him out

There is a misunderstanding  about " tax payers having to bail out banks in the US " 

Firstly dozens of banks weren't bailed out and they collapsed or were acquired. I would encourage everyone to read this link to understand just how the financial system also suffered and people lost there jobs 

https://en.wikipedia.org/wiki/List_of_banks_acquired_or_bankrupted_in_the_United_States_during_the_financial_crisis_of_2007–2008

And then  the majority of large banks that received bailouts paid back the " bailouts " within 3-4 years and made necessary structural changes that was expected of them so that 2008 could never happen again. 

People that are anti-banks ignore this, we should always recognize when any private sector company acknowledges its mistakes and addresses them

It surprises me how in the US people like Bernie Saunders still go on about 2008 as if nothing has changed or how banks " got off easy and yet US citizens lost there houses "....thats not accurate

[Gorth]

1 hour ago, BruceVC said:

People that are anti-banks ignore this, we should always recognize when any private sector company acknowledges its mistakes and addresses them

As far as I know, none of the responsible bank CEO's or board members got executed. Not even the 20+ years jail time they deserve. Nothing has been learned and nothing addressed. A repeat of 2008 just got kicked 10-15 years down the road.

[Gromnir]

54 minutes ago, Gorth said:

As far as I know, none of the responsible bank CEO's or board members got executed. Not even the 20+ years jail time they deserve. Nothing has been learned and nothing addressed. A repeat of 2008 just got kicked 10-15 years down the road.

the dastardly 4% fixed rate home loan may not be a good argument for bank villainy, but am indeed shocked at how little many lenders appear to have learned from 2008. 

HA! Good Fun!

[BruceVC]

1 hour ago, Gorth said:

As far as I know, none of the responsible bank CEO's or board members got executed. Not even the 20+ years jail time they deserve. Nothing has been learned and nothing addressed. A repeat of 2008 just got kicked 10-15 years down the road.

Executed.....holy smoke Gothfuscious, I thought you Scandinavian liberals  didnt support the death penalty? I support the death penalty so its good how alike we are but you more hardcore than me because I only support death penalty for capital crimes like murder and high treason...I dont support it for white collar crime 

But I support your sentiment about the death penalty 

[Gorth]

5 minutes ago, BruceVC said:

Executed.....holy smoke Gothfuscious, I thought you Scandinavian liberals  didnt support the death penalty? I support the death penalty so its good how alike we are but you more hardcore than me because I only support death penalty for capital crimes like murder and high treason...I dont support it for white collar crime 

But I support your sentiment about the death penalty 

Sentencing individuals to capital punishment for crimes against humanity is not unheard of. Such individuals rarely get their own hands dirty. But, instead of punishment and consequences for ruining million of peoples lives, they got rewarded with performance bonuses, stock options or in a few very worst cases, millions of dollars worth golden handshakes (to save face in the public). All of it because of personal greed, gambling other peoples money away. Not sure they really classify as humans or are entitled to the same legal and ethical protections that most people are...

[BruceVC]

5 minutes ago, Gorth said:

Sentencing individuals to capital punishment for crimes against humanity is not unheard of. Such individuals rarely get their own hands dirty. But, instead of punishment and consequences for ruining million of peoples lives, they got rewarded with performance bonuses, stock options or in a few very worst cases, millions of dollars worth golden handshakes (to save face in the public). All of it because of personal greed, gambling other peoples money away. Not sure they really classify as humans or are entitled to the same legal and ethical protections that most people are...

Absolutely, there are various components to crimes against humanity and most of them would constitute the death penalty in any county that has the death penalty 

Here is a link that highlights the various acts that define crimes against humanity because I researched this because of a local debate about Apartheid which is crimes against humanity 

https://en.wikipedia.org/wiki/Crimes_against_humanity#Apartheid

But its going to be  almost impossible to justify legally  white collar crime as crimes against humanity ?

[majestic]

3 hours ago, Gorth said:

As far as I know, none of the responsible bank CEO's or board members got executed. Not even the 20+ years jail time they deserve. Nothing has been learned and nothing addressed. A repeat of 2008 just got kicked 10-15 years down the road.

Executions are too clean these days. Freeze all their assets and force their children to go to a public school in a minority neighborhood. Not 20 years of jail time. 20 years hard labour at minimum wage, preferably in a cobalt mine. Make them a deal, if they manage to work off their time without getting a poor performance review that would get a regular worker laid off, their assets are restored to them, if not, then they're confiscated and paid as bonus to their fellow laborers, but they can go free afterwards.

[BruceVC]

31 minutes ago, majestic said:

Executions are too clean these days. Freeze all their assets and force their children to go to a public school in a minority neighborhood. Not 20 years of jail time. 20 years hard labour at minimum wage, preferably in a cobalt mine. Make them a deal, if they manage to work off their time without getting a poor performance review that would get a regular worker laid off, their assets are restored to them, if not, then they're confiscated and paid as bonus to their fellow laborers, but they can go free afterwards.

Thats sounds very socialist and radical left, remember we generally  dont support  those types of ideological views because we dont want to end up like Zimbabwe, Cuba, NK or Venezuela 

[Elerond]

6 hours ago, BruceVC said:

Elerond I was about to say " Elerond please dont try to fool people with Swedish socialist doublespeak " but then I thought about this loan payment scheme and it may make sense 

So the idea is you have low monthly payments because the loan is over 50 years but I assume you cant make renovations to the house easily because the bank still owns the house? And I imagine people dont go around selling property easily because you wont make much money unless you have paid off  most of the 50 years loan?

But it means most people can get a house because the monthly  payments are low, that must be why they do this?

Yes in my understanding it is to make it possible to most people buy house. But I have not familiar with reasoning behind the scheme so it is just guess 

[BruceVC]

13 minutes ago, Elerond said:

Yes in my understanding it is to make it possible to most people buy house. But I have not familiar with reasoning behind the scheme so it is just guess 

It makes sense, it has advantages and some disadvantages but more advantages 

[Gfted1]

Brilliant! To piggyback on that idea maybe the US could make something like 100 year loans. When you die, the property and loan balance go to your heirs to finish paying off, thereby providing a generational uplift at a low monthly cost. And if you dont have any heirs, the property is reclaimed and sold to the next person on the list. Win/win/win (homeowner/heirs/banks).

[BruceVC]

36 minutes ago, Gfted1 said:

Brilliant! To piggyback on that idea maybe the US could make something like 100 year loans. When you die, the property and loan balance go to your heirs to finish paying off, thereby providing a generational uplift at a low monthly cost. And if you dont have any heirs, the property is reclaimed and sold to the next person on the list. Win/win/win (homeowner/heirs/banks).

Its theoretically possible a 100 year loan but I guarantee you most banks wont create a 100 year loan because its not financially worth there while. The banks need to see some return on the loan in less time but maybe a 50 year loan?

Remember the banks would need to have the money available  to provide either a 50 or 100 year loan  and the US has  too many people in its population, Sweden has 10 million people and  the US has 330 million 

[Pidesco]

The party of small government strikes again.

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/texas-bans-10-banks-348-investment-funds-over-fossil-fuel-policies-71842914

 

[PK htiw klaw eriF]

3 hours ago, majestic said:

Executions are too clean these days. Freeze all their assets and force their children to go to a public school in a minority neighborhood. Not 20 years of jail time. 20 years hard labour at minimum wage, preferably in a cobalt mine. Make them a deal, if they manage to work off their time without getting a poor performance review that would get a regular worker laid off, their assets are restored to them, if not, then they're confiscated and paid as bonus to their fellow laborers, but they can go free afterwards.

They wouldn't last a week in fast food.

36 minutes ago, Pidesco said:

The party of small government strikes again.

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/texas-bans-10-banks-348-investment-funds-over-fossil-fuel-policies-71842914

 

"The market is speaking, and there are some states that want to put their thumb on the market," Rothstein said in an interview. "Texas taxpayers, unfortunately, will have a burden of hundreds of billions of dollars based on this decision."

I will be surprised if Texas does not implode from these dumb decisions within a decade or two.

[Elerond]

2 hours ago, BruceVC said:

Its theoretically possible a 100 year loan but I guarantee you most banks wont create a 100 year loan because its not financially worth there while. The banks need to see some return on the loan in less time but maybe a 50 year loan?

Remember the banks would need to have the money available  to provide either a 50 or 100 year loan  and the US has  too many people in its population, Sweden has 10 million people and  the US has 330 million 

In house loans there is the nice factor that money comes back to circulation in most case pretty much as soon as the loan is approved.

[Elerond]

2 hours ago, Pidesco said:

The party of small government strikes again.

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/texas-bans-10-banks-348-investment-funds-over-fossil-fuel-policies-71842914

 

It has been know for long time that republicans are actually communists 

[BruceVC]

7 minutes ago, Elerond said:

In house loans there is the nice factor that money comes back to circulation in most case pretty much as soon as the loan is approved.

Im not sure I understand you, if I buy a house from someone or a  property developer and I get a loan from the bank the money goes to them. The bank doesnt have that money anymore and you pay the bank back

The money I give to the person who owned the property doesnt necessarily end up in the same bank? What do  you mean by " comes back to circulation  " ? Because the risk to the bank is where people dont pay back  the loan and they have to absorb the debt or auction the house which is never ideal 

 

[Malcador]

Why would auctioning the house never be ideal ? Pretty sure in Toronto, for example, they'd net back more than the mortgage's value.

[Gromnir]

54 minutes ago, Malcador said:

Why would auctioning the house never be ideal ? Pretty sure in Toronto, for example, they'd net back more than the mortgage's value.

literal during the last recession, we could buy foreclosures on the steps o' the court house for ten cents on the dollar. the foreclosures tend to come in waves. sure, some times it works in the bank's favour, but as often as not it don't... particular as displaced homeowners are notorious for taking their frustrations out on the property before they disappear into the wind.

HA! Good Fun!

ps am knowing we stated banks had learned little from the great recession, but am gonna observe how recent we has seen at least one aspect o' bank behaviour change. yeah, banks have once again been offering loans to woeful unqualified prospective homeowners, and they is engaging in variations o' the sub-prime stoopid which were a large part o' the 2008 collapse, but am having observed how banks is far more willing to be reasonable and work to unload properties NOW than they were in 2007.

last recession, banks were holding out for every nickel and they were willing to sit on a property as 'posed to do a short sale or something similar.

the past few months has had baks doing different with more than a few lenders being extreme reasonable... which sadly helps convince us those banks is convinced another significant recession is forthcoming. 

Edited August 31, 2022 by Gromnir