US Federal Agency to sue big banks over mortgage securities

USAF, the point is, instead of giving them a handout, you should have bought them. Dollar per dollar that was "donated" should have instead been a "purchase." You would then sell that purchase back to the private sector at a later date.

It's not just about the fraud.

That's all well and good, but nobody is going to buy them back.

GM isn't on its own yet, is it? Sure, it'll work, but I still don't like it...

Chrysler paid its bills well ahead of schedule, actually. So there's a history of stuff working.

Chevy is doing a good job of rebranding now.

I don't quite understand why banking isn't a government controlled area.

We're supposed to be a free market economy. Things aren't really supposed to be owned by the government. Things like healthcare and the basic utilities are immoral to leave in the hands of corporations by their nature, but other stuff is supposed to be private.

Regulation is infinitely better than nationalization, if possible...

Except that free market really means "free to get screwed with no way of protecting yourself".

Besides, healthcare and utilities should be nationalized, but why not the institutions that control the freaking flow of money in the country?

edited 2nd Sep '11 3:34:29 PM by DrunkGirlfriend

The theory is that regulation is better than nationalization.

It's an axiom. It doesn't really come from anything.

Because banks are benign when properly regulated. The '08 crash was a failure of government regulation policy. That means we need proper regulation, not nationalization.

The US is about freedom, Tomu. A government monopoly isn't freedom...

I'm firmly in the opinion that when basic needs are held by corporations, the common good will be discarded in the name of profit. That's what we saw the banks doing up until the crash.

Exactly. A failure of policy.

So fix the policy. Don't remove freedom of choice. That's just as bad for the common good.

The financial system benefits in a general sense from free market principles. The problem is when those principles run away to the point of creating a risk of systemic failure. Government best serves the financial system by acting as negative feedback; the housing market crash was a direct result of positive feedback into the subprime mortgage market.

Lolwut?

Do you have any proof? People aren't dieing in NHS hospitals just because its run by the government?

edited 2nd Sep '11 3:44:53 PM by whaleofyournightmare

@USAF: Except that banks that large are free to escape any and all regulation because they operate under multiple jurisdictions (like Bank of America being able to ignore divorce proceedings in our case), and if you do any sort of travelling at all, local banks don't work.

Healthcare is a very basic necessity. Because people can die if it's not provided well and for a fair cost—i.e. not operated for profit—it can not be allowed to run as a for-profit institution. At least, in my opinion.

Banking can very easily be done so, so long as it's properly regulated, which the banks are not. So damn well regulate them. Don't nationalize them.

I don't think that banks should be for-profit any more than healthcare. With private healthcare, people can die when their insurance neglects them for money. With private banking, people can become homeless or destitute when their bank neglects them for money.

...that means people should be living within their means.

Having a place to live is a fundamental part of human decency. Living in a place you cannot afford is not. This, plus regulation, means that this argument doesn't really work, for me...

"Living within their means..." when banks are offering them cheap credit left and right? The market sets up a situation when the people who are supposed to be responsible for our finances profit when we do stupid shit. They claim they're advocates of responsible credit use, but they make the most money off of people who run up large debt and incur late fees and penalties. You do the math.

edited 2nd Sep '11 3:52:48 PM by Fighteer

@USAF: The problem is that people are living within their means, and getting dicked by the banks anyways.

In our particular case, Drunkscriblerian was denied a loan modification because the bank ignored the fact that he was divorced and awarded the house in the settlement, and they're attempting to force him to either locate his ex-wife (who is now remarried and living in another state) or lose the house.

...yes. Stupid shit.

That's the point. We are—yet again—blaming them entirely for something that is at least partially our fault, both in being stupid and in not regulating them properly. They're more wrong, but we're not completely right either.

@USAF: I fail to see what he did wrong, aside from choosing to bank with them.

edited 2nd Sep '11 3:57:32 PM by DrunkGirlfriend

@USAF: Well, then you'll be happy to know that banks, via regulation, have been forced to stop handing out piles of credit cards with horrifying terms to new college students.

edited 2nd Sep '11 3:56:10 PM by Fighteer

That's because you ninja'd me.

Cases like that are where the regulation comes in. Cases like Fighteer's "stupid shit" defense are where "it's your own damn fault for taking the bait" come in...

I should probably also clarify that we were getting foreclosure threats even when we were making our payments ontime and in full, because the bank wasn't processing them properly. We recently gave them close to $3k in "late payments" because they mishandled his loan and the lawyers advised us that just paying them would be cheaper and easier than suing them.

Does "regulation" not compute here? Yes, the banks do unethical things. Yes, that needs to stop. That is why we have regulation in the first place.