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- greevar, on 07/07/2009, -2/+41Now if they could just do something about these banks creating money out of nothing and charging interest on it.
- AbsurdParadox, on 07/07/2009, -7/+40I'm from the government, and I'm here to help.
- bu4ik, on 07/07/2009, -4/+20To me, It means big government making the decisions which I'm completely capable of making myself... and now I don't have a choice and neither do the producers, coercion sucks.
- enantiodromia, on 07/07/2009, -4/+19can't wait to see how people consider this a bad thing.
"think of the poor Bank manager!" - athinnes, on 10/01/2009, -11/+22One point for the consumer.
- inactive, on 07/07/2009, -11/+22It means bigger deficits, higher taxes, tighter credit, slower economic growth, and fewer jobs.
- darkened, on 07/07/2009, -13/+23Out of all the things we need, yet another government agency.
FTA: "Remember all of those funky ARM’s, jumbo loans, and other sleek mortgage names masking a product that is designed to rip you off? The CFPA would seek to put an end to these type of products."
These products are not meant to rip you off, they are meant to be used correctly. There's nothing wrong with ARM loans or any other exotic loan assuming you learn what your actually purchasing. If you're too stupid to read the 20 pages of contracts you sign when you bought a house that was your own fault. It's also your own fault if you were being offered an exotic mortgage and didn't take the time and money to take the documents to a lawyer or accountant and pay them a flat fee to go over them with you.
It always shocks me how willingly people will sign any document put in front of them in a loan application or any document that forces mandatory binding arbitration or how willing people are to save $5/month on their auto insurance policy for limited tort coverage. We don't need more government rammed down our throat because the majority of people are too dumb to care to make correct decisions in the first place.
All we need is to pass laws that regulate the worst practices of the credit card industry including double cycle interest billing, not allowing the consumer to refuse over the limit charges and always applying payments to the lowest interest debt first never the highest or even in the exact same order the debt was created. - mah2cent, on 07/07/2009, -5/+14More government for all of you who refuse to accept responsibility for your own actions. What ever you do, never, ever admit that you made a mistake! That would be wrong. Just let big brother take the responsibility off of your poor shoulders and soak everyone else with your mistakes. Yep, American, home of the brave, land of the free. Gotta love it.
Just answer one question, who will the government soak, when there is no one left to pay? Does anyone really care? The government always knows better than you about how to spend your money; they must since everyone is so eager to let them do it. - Animan351, on 07/08/2009, -3/+11Yaaaay a bigger government. That's the change we needed. GO OBAMA!!!!
- RonPauls, on 07/08/2009, -2/+10The free market does regulate itself, yes.
We don't have one. - enantiodromia, on 07/07/2009, -3/+11That's a nice theory, but it is totally inaccurate when it comes to the real world.
Read about Elizabeth Warren, a professor at Harvard Law School, where she specializes in Bankruptcy and Contract Law.
As an exercise, she made copies of the fine print for a credit card offer she had received in the mail, then passed the copies out to her students. She asked her entire class of law students, who were just about to graduate from Harvard Law School, to decipher the terms and conditions in the fine print, and to explain the offer in clear terms.
Her students were not able to come to any type of consensus on what the actual terms of the offer were, nor were they able to even agree on what the interest rate would be after one year.
Heck, you don't have to read about it, let her tell you herself: http://www.npr.org/templates/story/story.php?story ...
There is no reason for a bank to write a contract that is easy to understand by the consumer, and every reason to make it as complicated and slippery as possible.
This is not an issue of personally responsibility, this is an issue of exerting tremendous control over the government charged with regulating them.
Watch this when you have some time, or don't, it's up to you if you want to be educated on the matter, which goes along with personal responsibility, of course. - inactive, on 07/08/2009, -1/+8This is retarded. We already have one of these, it's called the SEC, and it failed. So there's no reason to believe that this new agency will do any better. Bigger government doesn't work.
- inactive, on 07/07/2009, -4/+11Mint is so cool.
- Zomgondo, on 07/07/2009, -4/+11Actually if you bought ANY car with a cardboard engine you'd be covered under state and federal lemon laws, which were designed to protect consumers from... drum roll please... dishonest salesmen.
Allowing the "free market" to sort out the dishonest salesmen still results in an awful lot of fraud and an awful lot of consumers stuck with ***** loans they can't afford - the free market may prevent dishonest people from staying in business but it won't prevent them from making a lot of cash up front. Sure, you can say "WELL PEOPLE NEED TO ACCEPT PERSONAL RESPONSIBILITY STOP TRYING TO REGULATE EVERYTHING", but for what? So we don't infringe on the rights of dishonest salesmen? I don't give a ***** about them. - KirbyMeister, on 07/07/2009, -6/+11I think it is, because it reduces personal responsibility.
In most other industries, it is assumed that the buyer of a product has at least somewhat of a clue into what he is purchasing. What the Government is claiming, is that it is physically impossible to teach people how mortgage terms work and so the Government needs to step in and do the consumer's job for them.
In reality, we -should- be teaching everyone to be frugal, to mind their money and understand what contracts they sign actually mean. We as a society do not do this; mostly because we have a Government willing to give banks cheap/free credit in an attempt to encourage reckless spending. This is due to the fact that governments consider spending to be the only driving force of the economy.
The problem isn't greedy credit card corps (it's just a symptom) but governments and societies that don't understand the reason for saving and hoarding money. - borez, on 07/07/2009, -3/+8You're presuming that every salesman is honest which is far from the truth when it comes from financial products. Most salesman keep their top people sweet for referrals, the rest are just fly by night shark bait. It's the nature of the game, and if you don't play that game, you don't last long.
- vizerei, on 07/08/2009, -1/+6broh,
The problem is a lot of consumers do keep their spending in line, as they take in to account being able to pay their credit card bill no problem. The companies make it ridiculously easy to take away that 0% APR by using ambiguous language that allows them to basically change it when they feel like it. All of a sudden your $40 minimum credit card payment just shot to $200, if you don't make that right away you're credit card is frozen, penalties are added, the limit is lowered, and now you owe $500 for the minimum payment. Assuming you didn't make the $200 because you weren't expecting it you were really not expecting the $500 and probably won't make that one either.
Well now at this point they've reported you to a credit reporting agency, and other credit cards you had just cut your your credit limits as well! So now you owe $1300...and you only have $5000 in credit card debt (a lot I know, but it's within reason, people who manage their money relatively good can have that paid off in short order, I know I could). With the $1300 now owed, you're in the *****, all the other cards where the balance got cut down are now getting penalties, interest rate raises, retroactive interest is compounding from not making the minimum payments for that furniture you bought on the store credit card with 0% for 2 years and the thousands start piling on.
The terms are set as such to make it a VERY slippery slope and the credit companies hope you misstep.
I experienced that. It sucks, and I was pretty damn good with my money. I had one of my cards go to 32.6% interest. Trying to keep up with a $230 monthly payment on $3000 when your really only paying interest and used to paying $80 can screw you, as it screwed me. People talk trash about credit counseling companies, but I found a good one, and they helped me out of it. I got that interest rate lowered to 9% on a payment plan and don't have that card anymore.
This CFPA is a VERY GOOD THING. - vizerei, on 07/08/2009, -1/+5broh:
I don't care if you are sympathetic, I was not even asking for your sympathy. I am simply stating what can happen if you cross the line defined by ambiguous language, practices put in place to make money at your expense, and are caught off guard. You simply make yourself appear to be a person who has never used credit cards and cannot know, or someone whose credit is so horrid they won't give you over a $300 balance.
My standards come from what I have witnessed, talked with people about, and helped people with. Most countries that have a well developed credit system have people in credit card debt. Those with developed credit systems but without a debt problem have legislation such as this, or a system that is similar to our "pre-deregulated" credit card laws. Britain is an example of a system like we have now and similarly have a civilian debt issue. France on the other hand has a very cautious system and has much less of an issue, and is in fact weathering this global credit crisis quite well. Countries that don't have a developed credit market would, of course, not have a consumer credit and debt crisis.
http://newsgroups.derkeiler.com/Archive/Uk/uk.poli ...
What is wrong with that picture...let's start:
- Cheap money - What is that, really? How can you call money cheap? Why is it cheap? Do you ever make sense?
- Fails to regulate - I assume you mean regulate credit, I've already touched on this issue. Credit was regulated in this country, the problem was the deregulation.
- Consumers Spend Unwisely - My original post was an attempt to illustrate that consumers tend to spend wisely but also tend to get caught in intricately woven webs of gotcha clauses in their credit contracts.
- Government comes to the rescue - Seeing as how their deregulation started the cycle, re-regulation should end it, and assuming that deregulation was the problem would you not agree on this plan of action?
I'm sorry, but you're woefully ignorant of how the credit system works in its' effort to make an economy thrive. I'm just glad we have smarter people than you doing something about this. - athinnes, on 10/01/2009, -1/+5Only a moron would blindly trust lenders.
- broh, on 07/07/2009, -6/+10I'm a stupid consumer who doesn't care to learn about personal finance so just create an agency to baby me.
/s - enantiodromia, on 07/08/2009, -0/+4@broh,
you assume all consumer debt is for their household only. most companies require credit to open their doors, and remain afloat for a few years before they become profitable.
a lot of companies are actually just regular people, with regular credit cards, and irregular income cycles.
i know a lot of people try to paint credit card debt as something only used for big screen TVs and motorcycles, and that it is pure greed on the consumer's part for how they got into trouble, but often that is not the case.
there are countless small businesses who are in trouble now, because their customers simply stopped paying _their_ debts. for a small business, even missing one check form one customer might be enough to start a vicious cycle of late payments, universal defaults, extra fees, collections, etc.
so before you start telling other people how they should be using their credit, may i ask, have you even started and managed your own company? - sloppychris, on 07/08/2009, -0/+4Moral hazards ftw.
- alamedaman, on 07/07/2009, -10/+14mmm more government, just what we need.
- fiatjustitia, on 07/08/2009, -1/+5Actually, they do:
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States" Article 1, section 8, US constitution
"Congress may spend money in aid of the "general welfare." Constitution, Art. I, section 8; United States v. Butler, 297 U. S. 1, 297 U. S. 65; Steward Machine Co. v. Davis, supra. There have been great statesmen in our history who have stood for other views. We will not resurrect the contest. It is now settled by decision. United States v. Butler, supra. The conception of the spending power advocated by Hamilton and strongly reinforced by Story has prevailed over that of Madison, which has not been lacking in adherents. Yet difficulties are left when the power is conceded. The line must still be drawn between one welfare and another, between particular and general. Where this shall be placed cannot be known through a formula in advance of the event. There is a middle ground, or certainly a penumbra, in which discretion is at large. The discretion, however, is not confided to the courts. The discretion belongs to Congress, unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment. This is now familiar law. " Helvering V. Davis, 301 US 619, 640 (1937) - broh, on 07/08/2009, -1/+5Is someone pointing a gun to their head forcing them to sign it? Where is this pressure coming from?
Let's just say for the sake of argument, there is this overwhelming pressure to sign up for a horrible loan/card. Are you that f'ing stupid and undisciplined to agree to it??? Or are you saying someone is literally grabbing your hand and making you sign. WTF kind of stupida$$ statement is that? Are we in f'ing north korea??? - inactive, on 07/08/2009, -1/+5Will they stop people lying in commercials? then they will put TV completely out of business.
- vizerei, on 07/07/2009, -3/+7bu4ik,
Go to youtube.com.
Read comments.
Tell me there aren't a lot of people in the US that are complete idiots and need some help when it comes to forming complex thought patterns. - Pinkertinkle, on 07/07/2009, -2/+6That stupid people will have a few more hints to not do stupid things before they go out and do them anyway?
- joculator, on 07/08/2009, -0/+4Sounds like a good idea, but isn't it just a rehashing of the FTC?
- Plopfish, on 07/08/2009, -0/+4No I would say Banks is correct. Due to the nature of the fractional reserve system every bank can lend many times more money than it has, effectively creating money out of nothing.
I believe the current reserve requirements are 1/10th, meaning a bank may lend out $9,000 for every $1,000 it actually has. - shig, on 07/08/2009, -2/+5The argument that they were forced to sign contracts, or were lied to, doesn't work. If they were truly forced then any contracts they signed could be nullified in a court of law, and wouldn't require an act of congress.
No contract nullification on the grounds of coercion = No force
Cry me a river of ignorant tears.... - enantiodromia, on 07/08/2009, -0/+3considering _every_ comment you have made in the last few days has been buried all to hell, i assume you are either a troll, or lack any meaningful social skills.
either way
2/10 - fiatjustitia, on 07/07/2009, -6/+9I'm from Big Business, and you don't need to worry about me swindling you of every penny you have.
/s - sloppychris, on 07/08/2009, -1/+4We would need a free market for it to regulate itself.
- athinnes, on 10/01/2009, -5/+8I think the point is not everyone is capable of making those decisions, and banks prey off this. And what choice is big government making for you when they tell credit lenders not to trick people into bad loans? Not making the connection here.
- faskippy, on 07/08/2009, -2/+5Ah, another redundant government agency.
"The agency would not only help enforce the Credit Cardholders Bill, it would expand into the broader scope of consumer protection."
Don't we already have one of these? Let's see, it has something to do with fair trade... - gustav42, on 07/08/2009, -4/+7Don't agree to it if you don't understand it. We allow them to get away with that because we don't call them on it.
I'll stick with having the option of choosing which businesses I give my money to over just being told how much to give the government... - PeppermintPig, on 07/08/2009, -2/+5Wealth is not a limited commodity, which means everybody CAN win, but taking wealth from one person and giving it to another destroys the incentive to create said wealth. THAT is basic economics.
Trade and business is about MUTUAL benefit. - enantiodromia, on 07/08/2009, -0/+3so i guess you don't ever use the Department of Transportation's, US Food & Drug Agency's, or the Federal Communication Commission's hard work?
seeing that you have presumably driven on an interstate highway at some point in your life, have ingested some kind of OTC medicine which did not make you sicker, and have clearly enjoyed the fruits of the Internet, wireless ethernet, television, radio, and the like, it seems you aren't making too much sense.
you talk all tough, but i am pretty sure if a hurricane wiped out your house, you would be the first to cry about why someone didn't "do something" to help you, or warn you.
if your bank decided to close your account and keep all your money, i am pretty sure you would have a problem with that, and contact the proper federal agencies.
if the baby aspirin you gave you kid wound up killing him, are you saying you would not expect some kind of thorough investigation and charges brought against those responsible?
this whole "Libertarian" 'all government is evil!' BS is just as bad, if not worse, than the hippies protesting in front of any building which says "Federal" in front of it.
so basically, you are a hippy. get a job. - PeppermintPig, on 07/08/2009, -1/+4And that doesn't mean it's PERFECT. Life ISN'T PERFECT. A free market is the concept of individuals being free to make choices and deal with the consequences of such. It is a more accountable system of governance because does not rely on all these safety nets the government throws up (via wasteful taxation methods) for corporations and other protectionist and wealth redistributive tactics.
- Photokon, on 07/08/2009, -1/+4No they aren't. People like you are just too dumb to know how to use them.
- shig, on 07/08/2009, -0/+3Real estate is a function of rents. If the public didn't know that, then perhaps the public shouldn't purchase a house.
Let's say there's a house for sale at $600,000, but down the street a similar house is for rent at $5500 a month. Is it better to buy or rent?
A few years ago almost everyone would be screaming buy buy buy, because they lost connection with reality. They thought that they could live in that house for a few years, and someone would come along and over pay them by another $100,000. That connection isn't something Congress has any authority over, and they can't legislate it's return. It wouldn't matter whether you got the lowest FRM at the best bank in the world you'd be screwing yourself if you had bought that house, period.
The loan instruments aren't to blame for such ***** ups. The ***** ups are to blame. If you disagree, I have gold I'm selling at $1500/ounce that you might be interested in investing in. - darkened, on 07/07/2009, -8/+11FTA: "Essentially, what the press release is trying to say here is that the CFPA would monitor and attempt to put an end to broker/institution side arrangements that are designed to steer you into a mortgage that may not be the best for you, but results in the mortgage broker getting a commission."
This is idiotic, when you go for a mortgage you talk to a sales person. If you haven't researched what your buying and end up with a giant pink Cadillac with a cardboard engine because that's what the sales person said you needed that's your own fault. There is plenty of regulation over mortgage, real estate and insurance sales that prevents fraud there is no need for another level of bureaucracy preventing sales people from doing their job as best as they see fit. I don't see them wanting to pass laws that make it illegal for a used car dealer to sell you the car THEY want to sell you.
Any sales person that makes their decisions solely off what pads their commission statement the most, never lasts in sales because to have any successful career in sales you NEED referrals. Referrals only come from satisfied customers not people who feel they were taken to the champagne room only to find a folding chair and table without even getting a reach around. - govsucks, on 07/08/2009, -2/+4Tell him to ***** drop the god damned thing on the fraudulent social security system first then cause its LONG overdue.
- broh, on 07/08/2009, -3/+5trolleyfan,
Do you agree that there are financially responsible & healthy people out there? As I've mentioned in an earlier reply, the major difference between financially stupid & smart isn't in fully understanding the t&c's. Because as you say, 'even harvard law students" were not able to read the contract.
You can shop around for credit cards to find the most popular and not accept every offer that you find in your mailbox. You can avoid the temptation of fully leveraging your home. And you can ask questions when someone presents you with a mortgage with the words Adjustable Rate in the name.
Some of it is just f'ing common sense, making an effort to learn and do your homework, and just being disciplined. - broh, on 07/08/2009, -3/+5This is really f'ing ridiculous. People like trolleyfan are part of the reason we're in this mess.
govsucks, this is akin to playing team sports and being punished for the idiots on the team. - shig, on 07/08/2009, -0/+2I like how nearly everyone thinks that only the fed prints money and charges interest, and every other bank is legitimately lending on a non-fractional basis.
On second thought, I don't like that one bit... - shig, on 07/08/2009, -1/+3They need help, not congress. That's the opposite of help.
- cubicledrone, on 07/08/2009, -0/+2In Butler, the Court explicitly stated that Congress had the authority to spend money extra-Constitutionally, which is absurd on its face.
For the entirety of the Constitution to reinforce the fact that the Federal Government has the rights to only do A, B, or C, and then for the Courts to find that it also says the Federal Government can do anything it wishes is patent nonsense.
And this particular kind of nonsense is the reason the Federal Government is broke. - shig, on 07/08/2009, -1/+3I wonder if any of those Harvard Law STUDENTS would sign it?
And if they did, would you blame the school, the student, or the loan officer?
My brain explodes at the possibilities and reasonings.... -
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