Direct "Fed to Consumer" Consolidation Loans at 0.5%

Today's news shows the Dow up as the Fed cuts interest rates to banks to 0.5% and even going further to a floating 0% to 0.25%

www.msnbc.msn.com...

Want to end this meltdown.... Direct Fed to Consumer Consolidation Loans at 0.5%

Why the hell not! Let us consolidate our Mortgages, School Loans, Car Loans, and other "Existing" debt that we are ALREADY paying every month into a "single" Fed loan at 0.5%.

The Banks get a HUGE influx of capital as we all immediately pay off our Houses, Cars, Credit Card Debt, Etc. No more bailout needed..for them, they will be rolling in capital.

We get immediate relief with a ton of income now available to save, invest, and spend with One single Fed bill a month...... If a crappy rebate check can keep the economy afloat for a couple of months, think of the recovery we would have with all of that money now freed up to spend!

The local & State Governments tax coffers would start to fill up as all that extra sales tax revenue hits as we all have additional money freed up to spend.


I know, we would repeat the cycle unless we coupled this with "responsible regulation" of our financial, credit, and banking industries to "prevent" what we just had happen (predatory lenders, lax standards, cooking the books, over leveraging "real capital assets" etc.)

This is just for existing debt only... any new debt can be negotiated by "regulated standards" in the banking industry.

Thoughts?

sounds great
where do we sign up?

Someone go get Obama!

We have a solution! (At least I think so)... LOL

Sounds good to me!

What I suspect 'though is that the Fed and the banks like controlling the people by having them mired in debt. We're slaves to our low paying jobs and life long struggle to become financially independent and that's how they like it.

There is an evil psychology of elitism that is strangling the world. Elite people do not want anyone not of their ilk to become financially independent like they are. They really like for the average person to live with a work and financial ball and chain. They're not going to help the middle class.

But that would eliminate banks and their profits....

Hmmm....

I like it.

That would be as close to eliminating notes and replacing them with silver certificates at 0% interest.

It is definitely as close to the later than any other suggestion or plan I've seen or heard.

And so simple. To bad that idea is not patentable like pig genes that will be patented and owned.

S&F on the best Idea I've heard. It could be done online as well just as shopping. Let the default banks die and deal FED direct. Toss insurance in the mix, and the FED will still get their money without any subordinates. Only competition would be credit unions and a thrift or such, but they could never match that rate and survive.

I wanted to add:
When an average 2500 or so foot home and maybe a double attached garage were going for the 130-150K range, and Bush took office, soon interest rates plumetted exposing risks of sub-prime, in part.

Suddenly, like a school of sharks attracted using chum and blood, intoxicated on a feeding frenzy, realtors, lenders, escrow, etc..began to feast and soon, property values double, then trippled, some areas even more so, and as this part of the economy thrived, many who never before qualified for a mortgage loan, found that with easy finacing and low interest, they were able to tweak the numbers and afford to get in, even if it required ARM, MBS and CDO types ultimately tranched and sold in pieces through Hedge Funds, where investors could purchase a CDS as insurance on the risky lean pieces, and Ninja (NINA) loans topped of the sub-prime frenzy as no income no asset loans. Sound risky?
As this was happening, many investors tried to parlay mortgage investments by turning houses as the values were skyrocketing.

The result of these loans and refinancing due to low interest loans now available, kept the say 130K (now230-260K) house affordable due to the low interest rate. As the ARMs finally started to rise, many "newbies" did not realize that a .5% rise on a $260K loan meant the monthly payment say if it was at $1050 to round it off, would increase the monthly payment by an additional $400 dollars. Now at $1450 a month, the income was sucked out of the home buyer just as the oil companies suched $4-5 dollars a gallon at the pumps earlier this year.

It forced the start of forclosures along with the ninja's, while those brought onboard with teaser rates were hit even harder.

All the while, one thing that did happen was the assessed values a few years prior at 150K were now at 250K if not higher and guess what. The new sub primer loans AS WELL AS the veteran pre-buble owners who refinanced were now expected to pay the county 2 or 3 times the prior values. So, during the bubble explosion, everyone was buying, the Gov't was raking in taxes and as the rates were manipulated up by degrees, the common folks were being sucked dry with larger payments and higher taxes. Most ARMS and such had no escrow to add tax percentages to the monthly, so, they were also paying these higher taxes out of pocket above the higher monthly payments. As these mortgages were pieced out and sold as hedges, as well as CDS monies coming in, many prospecting gold diggers were stuck with multiple homes that now were stagnant on the market, and defaulted. Many of the other tranche and Ninjas were suddenly unbearable as monthly payments swelled, causing mor defaults. As these piled up, the Hedge values dimminished causing retirement funds to be hit hard and losing huge percentages of value. This effected even those who had not engauged in the sub-prime, for their invesments were now holding hedges purchased by their investing firms.

So, we have Gov't sucking huge funds through ultrahigh property taxes, Lenders offing huge high risk loans chopped into packages, and sucking now unaffordable monthly payments from unknowing victims of the evil adjustable rate seduction, and insurers accepting monies for insurance on these packaged securities.

And to top it off, doctoring or undisclosed derivatives were hiding the true state of the institutions, as off shore dummy corps, were liquidating investors funds out of the country. Finally, the banks were beginning to repo homes as never before in history, and auctions were dumping what they could while most buyers were now broke and facing eviction and credit destruction.

While the worst reared a wee part of it's head, the oil commodities were speculating on record oil prices as China was aggressively purchasing futures in oil which contributed to drive the price further. Now these broke home owners in foreclosure were double whammied by gas prices hitting such absurd levels, that most are now scrounging change to get to work so that these lenders, assessors and oil companies can take their wages leaving many in despair.

The worst part is, the Atays and Option arms are only half way, and over the next three years, the forclosures will again double, and, as this kills economy, unemployment soars, businesses fail, and along with the yet to come defaulted loans, a new problem of Commercial Property defaults will come to bear more destruction on this already failing economy.

Final results? Homeless camps, Lack of crops, (Banks failing to extend credit to farmers for the coming year), starvation, and desperation will befall most of the middle class. The banks and financial wizards being bailed will have all the reserve notes, (i hear 100 dollar notes may be frozen within the next year) blaming counterfitting and other problems as we grow closer to a new monitary system that may create an exchange rate around 20% of face value.
Yet trillions are pumped into the system and eventually, they will have the land, the improvements, (homes, commercial buildings), the retirement investments, (breaking our senior citizens of any chance of a viable nest egg), the majority of the Treasury will have been pilphered, and as people are homeless and starving, the final blow will come.
Deserting the dollar, and recieving but 20 cents on the dollar. So if you have 500K in retirment, you may end up with only 100K after the gang raping is finished. All of this surely will cause Civil war, martial law, and the ultimate end of America, Our Constitution used as the pre-glossy paper sears catologues were prior to mass production of what we now call toilet paper.

Of course, I may be just paranoid. ABC might concur

[edit on 16-12-2008 by imd12c4funn]

Why not? Giving trillions to the institutions most responsible for this mess doesn't seem to be working that well right now huh? It's not like the American consumer has really learned anything yet. They'd most likely take advantage of the refi and then go right back to the banks to lever up buying even more crap they don't really need. I'm seeing parents buying 12-15 yr old children $400 cell-phones for Christmas that require a $25/month internet plan. The young children (like my daughter) are lucky in that they will not remember the excesses of 21st century western civilization. Those over 8yrs old are in for a rude awakening over the next couple of years I think.

I'm pretty sure the 0.5% refinance plan would be instantly and monstrously hyper-inflationary. Anyone want to venture a guess as to what a loaf of bread, a gallon of milk, or a gallon of gas would go to if such a plan were implemented? On balance though, I don't find it that much worse of an idea of what has already been tried, and at least people would be repaying that debt with devalued dollars.

[edit on 16-12-2008 by jefwane]

Wouldn't eliminate them at all... there will always going forward more mortgages, car loans, etc.

This just solves our problem here and now without bailouts.

I think deflation / stabilization would actually happen as we would actually take so much money out of the system when the debts are paid (debt paid to bank, bank pays billions / trillions back to fed) so we would actually deflate the currency but not consumer / citizen future disposable income.


This should actually strengthen the currency by removing trillions of dollars from the money supply. The bonus is the people see the benefits in this plan instead of just the bankers / corporate elite.

Of course people will then use the extra income to buy cars, homes, etc. But consumer goods should not see inflation other than "complete gouging" which I don't think they will try to do as it would be obvious.

I think "complete gouging" is happening now and has been going on for the last 20 years.

Can someone explain why grocery prices are so high? We have the most extensive and efficient methods of food production and distribution in the history of mankind but our food prices are ridiculous. Why?

Back on thread topic... if we could all get these cheap consolidation loans, wouldn't it be all for naught unless some serious banking reforms and regulations are put into place to stop the greed at the top?

Yes,

Regulation would have to occur before doing this. Mandatory 20% down on houses, income requirements for loans, collateral, banks MUST have true hard asset reserves (not paper vapor backing paper vapor).

Strict regulated lending requirements, credit requirements, interest requirements (no surprise Arm loans) etc.

This is a must or we are doomed to repeat as predatory lenders, greedy executives using accounting loopholes would cause a repeat.

Government is at fault as well by "lowering requirements" for so called low income first time buyers who could not afford a mortgage.

Food Prices: Hedge funds, commodities speculation, ethanol (government mandated)

blog.mlive.com...

*MONSANTO - 14x increase... sick... see GURT & VGURT / Terminator Seeds for details on the web.

The boom times in farm country have arrived. Corn, soybean and wheat prices have been pushed to or near record highs by a combination of high demand and new money from hedge fund traders who used to show little interest in those markets. Over the past 20 years, Minneapolis Grain Exchange trading volume has risen almost six-fold to a new record last year.

"We were never accustomed to thinking about such prices," said Lesser, who blames part of the rise in demand for such commodities on the weak dollar and higher foreign demand. "There is such a fluctuation on the commodity markets. We are in a situation now we've never been in before."

The International Monetary Fund estimates biofuels accounted for almost half the increase in consumption of major food crops in 2006-07, saying it has propelled prices for corn, other grains, meat, poultry and dairy.

Profits at seed and pesticide maker Monsanto Inc. reached nearly $1 billion last year - a 14-fold increase since 2003. They've tripled to $1.1 billion at agrichemical maker Syngenta and agriculture divisions of DuPont Co. and Dow Chemical Co. have also seen their earnings balloon.a 14-fold increase since 2003



[edit on 16-12-2008 by infolurker]

Excuse me for being a stick in the mud to your solution. But don't people still need a job to pay for thier new consolidation loan?

I'm to lazy to make a new thread but aren't you guys really freaking worried about how the fed is now almost at 0% interest to banks? Doesn't that put us at around 11:59 on clock if we had a timer that went off in the US financial collapse at 12:00?

Doesn't this put us very close to a Zimbabwe type issue where our money is worth nothing to anyone?

Help me out ohh experts of ATS.

Want to end this meltdown.... Direct Fed to Consumer Consolidation Loans at 0.5%

Why the hell not!

Why not? Because the Fed is a conglomerate of PRIVATE banks that pays taxes and is not a government entity. Because the Fed wants to make their money back (plus interest). Because the Fed is above competition with other banks and financial institutions. Because # rolls down hill and they are on top. Because... shall I continue?

Go Google the movie "The Money Masters".

Obsidience

Want to end this meltdown.... Direct Fed to Consumer Consolidation Loans at 0.5%

Why the hell not! Let us consolidate our Mortgages, School Loans, Car Loans, and other "Existing" debt that we are ALREADY paying every month into a "single" Fed loan at 0.5%.

The Banks get a HUGE influx of capital as we all immediately pay off our Houses, Cars, Credit Card Debt, Etc. No more bailout needed..for them, they will be rolling in capital.

Sorry, but how would lowering consumer morgates to 0.5% cause a HUGE influx of capital to banks, credit cards, etc???????

The reason people would pay off loans is if they have HUGE interest rates...

If we had 0.5% interest rates we're almost borrowing money for free, why pay back early?? This would encourage people to keep this loan forever and make minimum payments....

Or am i missing something?

And what about me, us, those that weren't stupid idiots and racked up any loans, that have no debt what-so-ever, that lived responsibly within our means, will we get a .5% credit card so we can go out and act stupid and consume consume consume?

Bologna! Deal with your fiascos like adults. My bank needs those high interest rates the chumps got themselves into in order to pay interest on my savings accounts! Stop whining and looking for a bailout from all your irresponsible Earth raped buying habits! Sell your iPods and home entertainment centers and speed boats and RVs and riding lawn mowers and financed SUVs and pay off your debts like a responsible grown adult should!

Gawd, the era of crybaby entitlements. This downturn in consumption is a GOOD thing, it's good for the ecology and our descendants future. We need less spending. Consumer credit should be outlawed! Credit was once an embarrassing word like welfare, bailout, handout. Live within your means and stop trying to live on credit. Credit should be for emergencies, like healthcare expenses, not for stereos from Best Buy. Gosh. What a sad sorry lot humanity has become. Truly embarrassing and shameful.

reply to post by obsidience


I think I'll continue.

Because the "Fed" realizes that and people are filing for bankruptcy and unemployment in droves.

Because the "Fed" would prefer to remain in the shadows rather be a visible and exposed to scrutiny.

Because our lending habits is what got us into this mess in the first place.

Because easy-to-get money undermines the value of said money.

Because the game is to squeeze the common person as much as possible without igniting a revolt.

Because the "Fed" doesn't care about you.

I'm done for now. Maybe more later

Obsidience

[edit on 17-12-2008 by obsidience]

[edit on 17-12-2008 by obsidience]

reply to post by icu20


Do it. Once in a lifetime bailout for all Americans.

Not one dime for Big Money or Detroit- unless We The People spend it.

Originally posted by Chakotay
Do it. Once in a lifetime bailout for all Americans.

A bailout is really a loan you know. You would still have to begin paying that back as soon as you got it. Most folks don't need another or ANY loan you should know. What are you expecting, a welfare handout for some, at the expense of those that don't need or want one?

Gawd, is this the "dream" thread?

The solution to this CREDIT fiasco is no more loans (aka bailouts), and for everyone to buckle down and start paying back everything they owe. If some are thinking they are entitled to free money to pay off their previous party bar tab, well, keep dreaming. The majority of Americans will NOT be willing to pick up the tab for anyone's years of irresponsible consumption on credit.

America needs to grow up and suck it up and bear through this mess while access to credit is tightened up so this kind of stupidity won't happen again.

I was talking with a guya t work yesterdaya bout the0.5% intertest..and he also agrees with me, this could cause hyperinflation...as ive read in other websties..trigger it rather.. I mean, at a quarter of what it once was, the FEDS are going to want thier money back somehow..and at 0.5%, the answer possibly, could be higher prices or taxes or both on food..
thats was our theory

Yeah, right. And inflate the already inflated money supply beyond recognition.
Welcome to Zimbabwe. It is obvious few in this thread know what the consequences of this are. THIS IS NOT A GOOD MOVE.