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March 27, 2008 at 09:16:50

Headlined on 3/27/08:
Can You Help Draft a Plan to Fix the Sub-prime Bubble?

by siriusss     Page 1 of 3 page(s)

http://www.opednews.com

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I need your help to draft a plan to stop the recession.

Yeah you read that right.

Maybe we here can do what Wall Street cannot and WILL NOT Maybe together, we can hatch a plan to help people pull themselves out of mortgage hell, save the banks and hold up the economy. But I need information.

Here is the story in a nutshell.

After WW1, vets tried to pay off their mortgages with war bonds to stop foreclosure of their homes and farms. The banks did not want to take the bonds. The Supreme Court ruled against the banks on the basis that printed money was a BOND backed by the US government.

Further, no bank could discriminate against the different types of bonds provided those bonds became due within 5 years of the mortgage.

Moreover there was no difference between banks buying bonds to collateralize debt and a person buying a bond to collateralize her debt. The times were extraordinary and called for extraordinary measures that extended finanacial respnsiblity to the individual from the Federal Government to hold up the banking system,

To my understanding,, the court in the Jimmy Carter years upheld this ruling.

What this means is that a homeowner with a $200,000 mortgage could buy long term bonds -due within 5 years of the mortgage. They could buy them at theoretically $.10 on the dollar or $20,000. These bond could be used to pay off the full face value of the loan, The bank that holds the bonds clears the loans off the books immediately at FULL FACE VALUE!

Further the banks could lend the home owner the $20,000 to buy the bonds. Now their house payment is in line with a car payment.

And that long term government bonds are bought to back those loans holds up the community (municipals bonds), county and state and federal government.

I would also imagine that people who have already lost their homes and are in financial hell can use this plan to pay off crippling debt

This is a win/win situaton all arround.

This is all theoretical. I need information to know if this is true. Can any of you give me feed back?

Can anyone tell me if this can work as I was told it could work ?

Can anyone sight the laws that can back it up?

 1  |  2  |  3

 

I am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.

My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.

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15 comments

A proud gay man
fouA proud gay man

Ask Hillary

She has an excellent plan. Many economists say so.

by fou (0 articles, 0 quicklinks, 0 diaries, 80 comments) on Thursday, March 27, 2008 at 1:52:08 PM
 


A proud gay man
fouA proud gay man

Go to her site and the plan is there

Contrary to what many would have you believe, she actually has outlined and published her plans on various issues. She has vision, not just nice words.

by fou (0 articles, 0 quicklinks, 0 diaries, 80 comments) on Thursday, March 27, 2008 at 4:48:02 PM
 


Mike Folkerth is the author of "The Biggest Lie Ever Believed" and is not your run-of-the-mill author of finance and economics.

The former real estate broker, developer, private real estate fund manager, auctioneer, Alaskan bush pilot, restaurateur, U.S. Navy veteran, heavy equipment operator, taxi cab driver, fishing guide, horse packer and few jobs too embarrassing to mention, writes from experience and plain common sense.

Mike’s humorous systems of “Mikeronomics” ...

to see more of bio, click on member name

Mike FolkerthMike Folkerth is the author of "The Biggest Lie Ever Believed" and is not your run-of-the-mill author of finance and economics.

The former real estate broker, developer, private real estate fund manager, auctioneer, Alaskan bush pilot, restaurateur, U.S. Navy veteran, heavy equipment operator, taxi cab driver, fishing guide, horse packer and few jobs too embarrassing to mention, writes from experience and plain common sense.

Mike’s humorous systems of “Mikeronomics” ...

to see more of bio, click on member name

Wow,

I think you may a have future with the federal reserve.

Your suggestion would be to borrow 100% of the money to purchase a bond that would yield 1000% at maturity with no backing what so ever.

This is similar to loaning a 100% of the purchase price on a home, plus the closing costs and paying interest only with a written guarantee that default will never be your fault. Great.

This is the type of plan that landed us here to begin with. There is no free lunch and life doesn't come with a guarantee.

The mortgage crisis is the tip of the iceberg, Americas entire economy is melting down.

by Mike Folkerth (82 articles, 0 quicklinks, 2 diaries, 410 comments) on Thursday, March 27, 2008 at 2:01:15 PM
 


A grouchy but well-informed know-all with much experience of the low-down low-life infesting and animating 'high-finance', and what to do about it, Keith P. occasionally emerges from the obscure depths of the Youreapeon forests to eye the current world, growl a few obscenities and lurch back into the darkness whence he came.
amazinA grouchy but well-informed know-all with much experience of the low-down low-life infesting and animating 'high-finance', and what to do about it, Keith P. occasionally emerges from the obscure depths of the Youreapeon forests to eye the current world, growl a few obscenities and lurch back into the darkness whence he came.

Sure

The very existence and traditional use of finance to produce just more of itself has never been anything else but a monumental swindle, and the present devious use of it to leverage power against the whole planet and all its inhabitants is a damnable crime.

How or why you folks won't face up to this and consider getting rid of the whole accursed system is beyond my comprehension.  Do that, and you solve almost all the world's problems at a stroke.

by amazin (26 articles, 0 quicklinks, 7 diaries, 340 comments) on Thursday, March 27, 2008 at 2:53:18 PM
 


I am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.
siriusssI am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.

How?

specifics please. If we immediately do what you suggest how will it affect the people with the mortgage in forcloseure?

How will it affect the person with a job going over seas?

Can this plan (Garner's plan) be used until we can get more things done? Like creating hard currency?

Did Obama Address this?

Clinton?

McCain?

I am open to anything. I am trying tto get a workable plan going on paper that we can talk to each person running for office, each governor each state rep. I want to get a workable plan on the INTERNET that people can go to and make a proposal to their bank.

I do not see any of the big 3 doing anything but talking promises. Their promises will not help the rank and file until it trickles down to them

John Nance Garner served as Vice President under Franklin Delano Roosevelt. Garner was minority leader and Sopeaker of the House. He was known for Integrity.

This pLan I understand is being used to bail Bear Stearns out. It was written in the Hoover Admin for the common people to pay off loans in a Depression.

If you know how to fix this for the people of this nation, not the Bear Stearns or the JP Morgans please telll me.

I want specifics please

 

siriusss

by siriusss (4 articles, 3 quicklinks, 1 diaries, 68 comments) on Thursday, March 27, 2008 at 5:10:29 PM
 


Mike Folkerth is the author of "The Biggest Lie Ever Believed" and is not your run-of-the-mill author of finance and economics.

The former real estate broker, developer, private real estate fund manager, auctioneer, Alaskan bush pilot, restaurateur, U.S. Navy veteran, heavy equipment operator, taxi cab driver, fishing guide, horse packer and few jobs too embarrassing to mention, writes from experience and plain common sense.

Mike’s humorous systems of “Mikeronomics” ...

to see more of bio, click on member name

Mike FolkerthMike Folkerth is the author of "The Biggest Lie Ever Believed" and is not your run-of-the-mill author of finance and economics.

The former real estate broker, developer, private real estate fund manager, auctioneer, Alaskan bush pilot, restaurateur, U.S. Navy veteran, heavy equipment operator, taxi cab driver, fishing guide, horse packer and few jobs too embarrassing to mention, writes from experience and plain common sense.

Mike’s humorous systems of “Mikeronomics” ...

to see more of bio, click on member name

The law that the Fed

is using to bail out Bear Stearns is in fact a law drafted during the depression which allows the Fed to loan money to other than the member commerical banks in a situation of “unusual and exigent circumstances.” 

Look for the Fed to purchase the bad loans of the giant quasi government lenders, Fannie Mae and Fredding Mac  and replace them with good funds to make new loans.

This is similar to the mafia laundering money. The bad loans then will be reduced to an-ability-to-pay status and the losses will be absorbed by the taxpayers. 

This will accomplish the results that you are seeking. The consequeces of those who made bad choices will be shifted to those who didn't make bad choices and we will be happily on our way to a depression.

The U.S. economy has hit zenith and no forgivness or new loan program will change that.  

by Mike Folkerth (82 articles, 0 quicklinks, 2 diaries, 410 comments) on Thursday, March 27, 2008 at 6:39:57 PM
 


I am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.
siriusssI am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.

Thanx for the feedbackbut plese be more specific

Unfortunately the FED is going to have to move in the direction of FDR. The taxpayers are going to pay for it no matter what. Nothing I have seen says the taxpayers are not going to pay for it.

I have flund out this is called the Homeowners Refinancing Act AND it was the most successful mortgage act ever enacted. I found out when it ceased operation if HAD PAID ITSELF OFF and returned a modest profit to the federal goverment. I am going to write on this as I do more research. 

The taxpayers were paid back and made a profit. 

Do you have a plan whereby the taxpayer does not have to pay for it?  Can you promise that the plan will pay the taxpayer back?

 We have to stop the bleeding in the private sector. I could give a fig for the investement banks.

Pouring 2.5 billion into Job training is pretty much the same thing only it does not address the mortgage crisis now.

 Most of the plans of Hoover were already beginnig to work when FDR came in.

Garner was Speaker of the House under  Hoover. He became VP under FDR and ran against FDR when he ran for his third term.  Garner was very much against much of the New Deal.

 From what I understand the plan was used in the Democratic Primary to give FDR the final vote to put him over the top. Wow just where we are now.

 And the plan paid for itself and made a profit.

I will go over your site. I am sure it is good but I don't see how it will help the people in crisis now

To assume that every one in the sub prime bubble is a spendthrift is pretty elitist. Let them eat cake right?

siriusss 

by siriusss (4 articles, 3 quicklinks, 1 diaries, 68 comments) on Thursday, March 27, 2008 at 7:11:38 PM
 


I am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.
siriusssI am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.

lol

I agree there is a sense of karma in all this isn't there? It is hard to feel bad about a nation  drowning in debt when that  nation brought the world shock and awe.

And it isn't like people weren't warned! All throughout the 90s this was foreshadowed . Certainly the fiscal irresponsiblity of the 80s make one wonder why it did not  happen long before.

 I think many people ran to get on the housing band wagon because they were afraid they would get shut out by the skyrocketing housing prices.

As many have pointed out the irresponsible policies of the FED and the Treasury and Congress have led us to this place.

I don't want to see the most vulnerable take  the brunt of this mess. As Hillary said "At the end of this we will be ok but what about YOU?"

 

siriusss 

by siriusss (4 articles, 3 quicklinks, 1 diaries, 68 comments) on Thursday, March 27, 2008 at 10:39:41 PM
 


Major Royal Australian Infantry (Inactive) RFD, Former Mayor City of Greater Dandenong, CPA, University Lecturer Risk Finance, Wife from Arabic speaking coutry, Former Lecturer Arabic & Islamic culture - Army Reserve Command & Staff College.
kwalshMajor Royal Australian Infantry (Inactive) RFD, Former Mayor City of Greater Dandenong, CPA, University Lecturer Risk Finance, Wife from Arabic speaking coutry, Former Lecturer Arabic & Islamic culture - Army Reserve Command & Staff College.

lol

Sorry for taking so long to reply. I'm not used to comments on my comments.  So I'm pleased I gave you a good laugh.

For the record I am serious on both points.  I,m quite angry at the Iraq situation because, my wife is Arabic and I regard Arabs in general as my relations by marriage and as a former professional army officer  and qualified tactics instructor (including low level OPs) the whole thing has been both morally wrong and unbelievebly mishandled.

Secondly I do have some valuable insights into this current crisis eg one of my previous commments

Capitalism and Risk

Much of our problem today is the poor accounting for risk.  The emphasis on performance devoid of measuring the risks taken to acheive it rewards gamblers at the expense of good risk management.  The true costs are not measured.  Risk management incorporates process.  Should we reward somebody who ran unaceptable risks such as sprinting across a busy road without looking just because he/she got to the finish first?  The economic costs of increased risk of social disruption and climate change must be incorporated into our economic model.

For the record I teach at the post graduate level.

by kwalsh (1 articles, 0 quicklinks, 1 diaries, 71 comments) on Tuesday, April 8, 2008 at 10:04:00 PM
 


American Expat in Asia
pftAmerican Expat in Asia

HOLC

This might be of use. 

http://www.answers.com/topic/home-owners-loan-corporation?cat=biz-fin

"In June 1933, the Home Owners' Loan Act, following the president's lead, sailed through Congress. The law authorized $200 million to set up the Home Owners' Loan Corporation (HOLC) with authority to issue $2 billion in tax-exempt bonds. The money raised would enable the HOLC to rescue imperiled mortgages by offering financing up to 80 percent of assessed value, to a maximum of $14,000. There followed a rush to file applications in 1934 by those holding 40 percent of all mortgaged properties, of which half with lowest risk were accepted. As intended, the main beneficiaries were homeowners at the lower end of the middle class with incomes in the $50 to $150 monthly range, persons who in the private market would have lost their homes.

The HOLC permanently changed the prevailing mortgage system. It offered money at 5 percent, provided insurance for its loans through the Federal Housing Authority and the Federal Savings and Loan Insurance Corporation, and allowed up to twenty-five years for repayment. To reach far-flung clients the HOLC dispersed into regional centers. Every loan situation was handled individually, including personal visits to prevent default. Given wide discretion to act, agents improved the chances clients would meet their obligations by helping them find work, collect insurance claims and pensions, attract tenants for rental space, qualify for public assistance, and even locate foster children to take in for a fee. The success of this sympathetic outreach was best demonstrated by the fact that the foreclosure rate for HOLC's risky mortgages was no greater than that for much safer mortgages accepted by banks and insurance companies."

Of course, this is after people lost their homes. 

 FDR tried to work within the Fed system.  Today, given the Feds failure, Congress should set up a government bank,  and provide loans directly to homeowners with money issued debt free, before they lose their home.  Government isssued money.  If a government can issue a bond, it can issue it's own currency.   Banks within the Fed would be required to accept the new currency as legal tender.

 

 

 

by pft (0 articles, 0 quicklinks, 0 diaries, 46 comments) on Friday, March 28, 2008 at 3:57:17 AM
 


I am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.
siriusssI am recently widowed. I am a writer, actress/director. I am addicted to Irish dance and belly dance. In practicing the latter I have been likened to Ethel Mertz dressed in Xmas tree lights.My passion is Human rights especially in the US and China where I inadvertantly became the " Jesus is back and she is a woman" prophetess. That is me. It is a long story and not without a certain dark humour.

Did you know the Home Loan Bank paid it self off

and returned a small profit.

Notice the roughly 10% of the loan value.200 million is mortgages and 2.5 billion in bounds. It was roughtly 10 cents on the dollar.

I was wondering BY BACKING THE BONDS with land in essence aren't you creating a land bank? Isn't that exxentially a hard currency?

If Bear Stearns was propped up using the law is the law still on the books? Since it was written for home owners can it still be used for homeowner if we find a way to write a blue print boiler plate?

Bear Strearns is NOT going to repay this loan. Historically we know homeowners DID repay the loan.

That is our barganing chip.

siriusss

by siriusss (4 articles, 3 quicklinks, 1 diaries, 68 comments) on Friday, March 28, 2008 at 9:49:13 AM
 

 

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