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Can We Survive the Next Financial Crisis?

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Re: Can We Survive the Next Financial Crisis?

#211

Post by smidgeoncoup »

dc_gregory wrote: post #197
yardie wrote: post #193

Earlier quoted context omitted.

> It is legal threats against you, your family, your friends, your employer, etc... If any debt collector is brave enough to do any of this I'm documenting all of it and suing the everloving pants off of them. Because that is harassment.

With what money?

any consumer rights attorney will take debt collector abuse cases on contingency - 40% cut. Abuse is so rampant (at least it was after the last financial crisis) it literally is like playing whack-a-mole for $1k/pop for every violation. A collector that repeatedly called my place of employment after being told I couldn't accept calls there, and threatened jail time, was forced to pay me $10k to me for their violations (and 8k to my attorney) on my counterclaim in addition to having their suit against me thrown out -- this was a law office that purchased debts and blanket sued and strongarmed/scared people into paying via violations of the FDCPA.. it's worth it for them because 90% of people give in and don't know their rights. It's even more worth it for those individuals that do understand the law and their rights.

Just document all calls, save all letters, and get a good grasp of the Fair Debt Collection Practices Act and any state-level equivalent (Rosenthal in CA) -- in CA you get to shoot the violators with a double barrel for federal AND state violations.

Having the major credit card companies increase my APR to 30% in 2009 having never missed a payment on anything in my life, while being backstopped via TARP and having literal 0% Fed/interbank lending rates blew my top off and I decided giving them the finger was my individual right of protest and damn the consequences. Little did I know I was entering an exciting world of learning how to beat the bottom feeders at their own game. Never paid a dime, made about $20k suing for violations, and my credit score was above 700 within 4 years and after everything fell off (7 years) it's like it never happened. But I'll never forget it - was pretty damn exciting to be honest.

Re: Can We Survive the Next Financial Crisis?

#212

Post by 01100011 »

ajross wrote: post #209
crazynick4 wrote: post #104

Earlier quoted context omitted.

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

> people who had no health insurance but still got health care This is a harmful myth. It's possible to get emergency care under pretty much any conditions. Everything else isn't available. You can use this trick if you got hit by a truck or had a big infection. It doesn't work to get a hip replacement, or chemo, or post-stroke occupational therapy, or a prosthetic, or a pacemaker, or... That stuff requires insurance…

My ex mother in law was a lazy, morbidly obese dependent of the state who received well over a million USD in care during the last 10 years of her life. Even when her moron of a husband cancelled their insurance policy she still managed to spend months in the critical ICU section of UC Irvine while they cut out a bread loaf-sized section of necrotic flesh and rebuilt her intestinal tract. They didn't, and couldn't, pay anything.

She received care, without insurance, for heart failure(including oxygen concentrator and tanks), a pulmonary embolism, and back pains(among other things which I can't fully recall and am actively trying to forget).

I'm not saying it happens to everyone, but it does happen.

Re: Can We Survive the Next Financial Crisis?

#213

Post by vkou »

beaconstudios wrote: post #201
sigfubar wrote: post #182

Earlier quoted context omitted.

What does it mean to be "hounded" by collection agencies? I've allowed some of my debts to go unpaid because I considered repayment to be a poor deal. Yes, I've received phone calls, which I answered and calmly informed the caller that (a) the conversation was being recorded; and (b) this was the last time they called me because I was invoking the FDCPA. I've never had to repeat this more than twice. Yes, I've receiv…

> I've allowed some of my debts to go unpaid because I considered repayment to be a poor deal. Could you elaborate on this? I don't know if it's what you intended but it just comes off like you defrauded a company.

If defaulting on a debt is fraud, then why do lenders charge a premium for credit risk?

They do it because, in most cases, it is not fraud - defaults are just a fact of business. Being a lender is not a ticket to free, zero-risk money.

Both parties in a lender/borrower transaction understand that there is a risk of default, as well as consequences for a default. In a secured loan, the borrower loses the secured item. In an unsecured loan, more of the risk falls to the lender (which is why unsecured loans have much higher interest rates.)

Re: Can We Survive the Next Financial Crisis?

#214

Post by toss1 »

darawk wrote: post #204
toss1 wrote: post #165

Earlier quoted context omitted.

around the time they add/remove Amazon (or company X) to the index, they do enhance or detract from it's performance. Of course, when't it's there for years, it merely adds a relatively steady-state chunk to their price, affecting the level of their price curve, but not so much the slope.

Yep, true. My point is just that indexing has nothing to do with Amazon's meteoric rise. Nor does it make the market less efficient or any other such nonsense.

Yes, I'd guess the effect in the single-digit percentages, and being in the index didn't help GE not get dumped.

Interesting question about market inefficiencies. Again, while they're not zero, I'd guesstimate them to be in the minor percentages...

If Amazon suddenly adjusts their R&D spend to show the massive profit of which they're capable, or does a massive increase to go after a new market, I'd expect it to go up or down massively more than the index and drag the index along. In that respect, the index may play a dampening effect, as people invested in index funds just go along for the general index ride instead of jumping on/off the AMZN bandwagon.

Re: Can We Survive the Next Financial Crisis?

#215

Post by brianpgordon »

> The leveraged loans are now being packaged into collateralized loan obligations and sold to investors. Sound familiar? And the CLO market has grown to match the size of the CDO market at its pre-crisis peak. Yet one major difference makes the CLOs of today less scary: The loans that comprise them are backed by collateral, and if one of the companies in the mix defaults, an investor can find recourse through the sale of that collateral. Pre-crisis CDOs built on mortgage-backed securities had no such backstops.

Wait, what's the difference here? Mortgages had collateral- the homes. That's the C in CDO. The problem was that when home prices fell, the collateral wasn't enough to cover the loan defaults. It seems like the same thing could happen for a structured product based on other types of debt if the collateral turns out to not be as valuable as we thought.

Re: Can We Survive the Next Financial Crisis?

#216

Post by adiusmus »

Short answer: Yes.

Survival is a very low bar. Going bankrupt qualifies as surviving since being alive along with having faith in the future can be enough to rebound successfully. Plenty of millionaires exist now because they learnt from failure from bad luck or poor execution of a plan.

Whether we taxpayers will be able to bail out various institutions that should have failed dismally last time is another matter. According to the article, banks are better off now but that remains to be seen. Nothing like reality to expose a gap in planning or regulations. Multiple institutions have likely not learnt their lesson and are probably unbalanced or unstable right now.

The downturn is likely already happening in some sectors in some obscure way and what the flashpoint will be is anyone’s guess. Possibly student loans but that’s a slow burn safely covered by the government and people who can’t escape paying so it’s effectively already bailed out. Might be the unpaid pensions which are already hitting the budgets of multiple states. Petrodollar consequences may be a factor since it might cause moneyprinting to be less effective.

Interesting times ahead I’m sure.

Re: Can We Survive the Next Financial Crisis?

#217

Post by [deleted] »

roenxi wrote: post #187
crazynick4 wrote: post #104

Earlier quoted context omitted.

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

The issue with that is that it represents a breakdown of property rights. I'd like, but don't know how, to find a less judgmental way of putting that point because from what I've heard the US healthcare system is unfair and unpleasent. That said - what you are describing is in a strictly literal sense theft. This quickly comes back to grandparent's point that the terms 'we' and 'survive' need to be more established.…

[deleted]

Re: Can We Survive the Next Financial Crisis?

#218

Post by beaconstudios »

vkou wrote: post #213
beaconstudios wrote: post #201

Earlier quoted context omitted.

> I've allowed some of my debts to go unpaid because I considered repayment to be a poor deal. Could you elaborate on this? I don't know if it's what you intended but it just comes off like you defrauded a company.

If defaulting on a debt is fraud, then why do lenders charge a premium for credit risk? They do it because, in most cases, it is not fraud - defaults are just a fact of business. Being a lender is not a ticket to free, zero-risk money. Both parties in a lender/borrower transaction understand that there is a risk of default, as well as consequences for a default. In a secured loan, the borrower loses the secured item.…

of course, but my interpretation of OP's comment was that they went into a purchase with the intent of defaulting. To me, that's fraudulent - IANAL but that would seem to be legally fraud too. It's really no different from chargeback scams.

Re: Can We Survive the Next Financial Crisis?

#219

Post by cm2187 »

darawk wrote: post #203
cm2187 wrote: post #196

Earlier quoted context omitted.

But these strategies do have all sorts of side effects on the market. It pushes the correlation between stocks up. Investors might be more hot handed as their investment is more liquid, which may result in more selling in a dip. There are all sort of algorithmic strategies that are pro-cyclical. And also it reduces discrimination between stocks which results in weaker stocks benefiting from just being in the index an…

> It pushes the correlation between stocks up. Citation needed. I seriously doubt that this is true. > And also it reduces discrimination between stocks which results in weaker stocks benefiting from just being in the index and being overpriced. Not really. Retail investors allocating their money to index funds just leaves the price-setting power to the professionals, which, on net, ought to be better for price disco…

First result on google:

https://www.bloomberg.com/news/articles/2018-09-09/asia-stoc...

But it is kind of intuitive anyway. ETFs are becoming significant in volumes, so when net volumes buy or sell them, they force the sponsor to buy/sell the whole market reducing price discrimination. To have any price setting power you need large volumes.

Re: Can We Survive the Next Financial Crisis?

#220

Post by maxxxxx »

HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

"The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis."

They totally will again. The working class will again go against each other over irrelevant issues like guns, race and religion while the .1% will make sure to get ahead. I always like this story :

"An immigrant, a worker and a banker are sitting at the table with 10 cookies. The banker takes 9 and then tells the worker "watch out, the immigrant is going to steal your cookie"."

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