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The revival of [The Economy] (thread) and the potential for its coming collapse
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
With optional bonus points for how they do the valuation to determine what percentage the $25k is right now. Because I can easily see them basing it on your purchase price and targeting the offer to people that bought after the housing crash when prices were depressed.
MayabirdPecking at the keyboardRegistered Userregular
Since there has been a lot of serious shit going on, the expiration of the Farm Bill and the complete inability of Congress to renew it (as it had every five years since 1933) has gone pretty much unnoticed in the national media. Some local outlets in farm country have been reporting it. Basically, the Senate wanted to pass a similar bill to ones that usually pass every few years, a large mix of trade programs and so forth to promote American agriculture, which also happens to include food stamps (because when you get down to it, food stamps are an agricultural subsidy and they always have been). The House right now, of course, is full of crazy right-wingers who were willing to take down American agriculture so long as some poor people wouldn't get food stamps. And so no compromise bill could be passed, because House Republicans think their balls would shrivel and fall off if they weren't cruel, so [url= ]many agricultural programs are now frozen.
But hilariously, not food stamps for now, because it has its own funding sources for the moment.
But yeah, agriculture is one of the biggest and most productive portions of the American economy, and the party that supposedly is all about business is willing to let it crash. So there's that.
+9
ChanusHarbinger of the Spicy Rooster ApocalypseThe Flames of a Thousand Collapsed StarsRegistered User, Moderatormod
food stamps are tied to the farm bill as leverage to cut more food stamp benefits because nobody cares about the poor but everybody wants to support farmers, not because they're an agricultural subsidy
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
I figured there's more to it that that. Cause otherwise it seems like if you got four of those loans, you get to live rent and interest free for 30 years, and then you move (or have built up enough in savings to buy it outright). Sure, they're taking a large chunk of the eventual result (or all of it in my example), but there's got to be more to it.
I know when I moved into my house, I had 3/4 of the price as a downpayment. If I had the other 25% as a 30 year percentage of the property value loan, I think I'd have been able to cut across the curve of housing inflation in savings and investment. Or they're just banking on people not using the remaining money wisely, and they're hoping for something that'll force an earlier sale? But even then, that's just getting them less money, and you're still getting the 75% (in my example) remainder after loan repayment.
EDIT : Yeah, I figured it'd be something like what @abotkin said. Either targetting people where the pricing only works in their favor, or having all sorts of bullshit clauses and fees that chip away at any other aspect. Cause you can trust Goldman Sachs will be screwing people. It's the one guaranteed outcome of Goldman Sachs.
Most people don't have a 75% down payment. Even the standard 20% down payment isn't that common anymore.
+11
daveNYCWhy universe hate Waspinator?Registered Userregular
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
I figured there's more to it that that. Cause otherwise it seems like if you got four of those loans, you get to live rent and interest free for 30 years, and then you move (or have built up enough in savings to buy it outright). Sure, they're taking a large chunk of the eventual result (or all of it in my example), but there's got to be more to it.
I know when I moved into my house, I had 3/4 of the price as a downpayment. If I had the other 25% as a 30 year percentage of the property value loan, I think I'd have been able to cut across the curve of housing inflation in savings and investment. Or they're just banking on people not using the remaining money wisely, and they're hoping for something that'll force an earlier sale? But even then, that's just getting them less money, and you're still getting the 75% (in my example) remainder after loan repayment.
EDIT : Yeah, I figured it'd be something like what @abotkin said. Either targetting people where the pricing only works in their favor, or having all sorts of bullshit clauses and fees that chip away at any other aspect. Cause you can trust Goldman Sachs will be screwing people. It's the one guaranteed outcome of Goldman Sachs.
I'd have to assume that there's at least some interest payment involved, otherwise that potential 30 year wait until payment gets ugly. Though they might also be targeting starter home areas to increased the odds of a sale.
Seriously though, the % of the sale price bit really stands out as unusual.
Shut up, Mr. Burton! You were not brought upon this world to get it!
food stamps are tied to the farm bill as leverage to cut more food stamp benefits because nobody cares about the poor but everybody wants to support farmers, not because they're an agricultural subsidy
SNAP was explicitly designed to be run through the USDA because tying it to agriculture subsidies would protect it from being dismantled by conservatives. There are a lot of similar strategems in place in American government to reduce partisan sabotage.
food stamps are tied to the farm bill as leverage to cut more food stamp benefits because nobody cares about the poor but everybody wants to support farmers, not because they're an agricultural subsidy
They do function as one though, and since SNAP can be used directly at farmers markets it can even directly support small farmers.
It is great for farmers, big supermarkets, small markets and agribusiness. And the poor! Everyone wins and market forces drive better competition. Which is why they must be opposed.
Void Slayer on
He's a shy overambitious dog-catcher on the wrong side of the law. She's an orphaned psychic mercenary with the power to bend men's minds. They fight crime!
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
Which means you only got $112.5k from the house sale despite "average" purchase prices going up 50%. GS makes 50% return on their cash investment. You've lost 25% of your home value. Unless you think you can make more than that return on their loan, it's a shit deal.
SiliconStew on
Just remember that half the people you meet are below average intelligence.
food stamps are tied to the farm bill as leverage to cut more food stamp benefits because nobody cares about the poor but everybody wants to support farmers, not because they're an agricultural subsidy
SNAP was explicitly designed to be run through the USDA because tying it to agriculture subsidies would protect it from being dismantled by conservatives. There are a lot of similar strategems in place in American government to reduce partisan sabotage.
And it worked both ways to encourage urban areas not to dismantle the ag subsidies. This way both urban and rural voters have something in the pot.
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
Which means you only got $112.5k from the house sale despite "average" purchase prices going up 50%. GS makes 50% return on their cash investment. You've lost 25% of your home value. Unless you think you can make more than that return on their loan, it's a shit deal.
Well 112.5k plus the 25k you had in liquid cash during that period...so they made 12.5k on a 25k loan which is still fucking absurd. It's a bad dumb idea.
MayabirdPecking at the keyboardRegistered Userregular
Incidentally, agricultural subsidies were also part of the point behind foreign food aid. Buy up a bunch of corn or whatever then send it to some country in a famine. Farmers get their crops paid for and the US gets a little soft power bonus for keeping people from starving. It cost very little while having disproportionate benefits for the US. But, ya know, more important to be cruel to the not white people outside the country, amirite?
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
Which means you only got $112.5k from the house sale despite "average" purchase prices going up 50%. GS makes 50% return on their cash investment. You've lost 25% of your home value. Unless you think you can make more than that return on their loan, it's a shit deal.
Well 112.5k plus the 25k you had in liquid cash during that period...so they made 12.5k on a 25k loan which is still fucking absurd. It's a bad dumb idea.
Yeah this sounds like the Canadian Reverse Mortgage stuff from these guys. They play a lot of ads to convince old people to sign up and give them free money. I still don't understand how this is legal as it always felt predatory and sc[a/u]mmy.
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
Which means you only got $112.5k from the house sale despite "average" purchase prices going up 50%. GS makes 50% return on their cash investment. You've lost 25% of your home value. Unless you think you can make more than that return on their loan, it's a shit deal.
Well 112.5k plus the 25k you had in liquid cash during that period...so they made 12.5k on a 25k loan which is still fucking absurd. It's a bad dumb idea.
Yeah this sounds like the Canadian Reverse Mortgage stuff from these guys. They play a lot of ads to convince old people to sign up and give them free money. I still don't understand how this is legal as it always felt predatory and sc[a/u]mmy.
It differs in that they don't own your house after 30 years, you just owe them a pile of cash. They don't care how you get it; but it will probably require selling/refinancing your house (which they probably have a lien on).
The other shitty part is that if you do sell your house, you owe what's left on your mortgage plus what you now owe them. So all things being equal, its like adding 25k to your closing costs.
That was what they were up more or less up front about (spun as positives, of course). Sadly, the offer got tossed before I could review the fuckery in the fine print.
+1
daveNYCWhy universe hate Waspinator?Registered Userregular
In fairness to reverse mortgages, they are products that can be very useful to certain people in specific situations. They're definitely not the sort of thing that should be pitched to everyone with a pulse and a home that's completely paid off.
Shut up, Mr. Burton! You were not brought upon this world to get it!
I have received several debt consolidation loan offers since September; including one from Goldman Sachs and this gem:
"Sell us a $25,000 stake in your house, and pay us back an equivalent percentage of its market value when you sell, or in 30 years."
Its like they figured out that the problem that caused the 2007 crash was simply that their marks realized that the loans they bought weren't being paid back when payments were missed.
Solution: Structured the terms of the loan to defer payments for 30 years.
(Yes I sometimes read junk mail and I answer unknown numbers!)
And that's how it gets you. I don't consider myself a financial or legal expert, but I consider myself to be reasonably clued in.
And it doesn't look immediately look like a terrible deal.
But I know there's a catch, and I know it's a big one. Because nothing is ever close to as good as it might seem, and well... Goldman Sachs.
Anyone with the relevant expertise want to spoil the surprise?
My immediate guess is the '...pay us back an equivalent percentage of its market value...' You have a $100k home, borrow the $25k, sell the house for say $150k a couple/five years later, pay GS $37.5k. There's more details needed, but I'd bet you that thats the key bit.
Which means you only got $112.5k from the house sale despite "average" purchase prices going up 50%. GS makes 50% return on their cash investment. You've lost 25% of your home value. Unless you think you can make more than that return on their loan, it's a shit deal.
A bit late, but this is how the distributive property of multiplication works. If the house has a 50% increase, then every equity partner also gets a 50% return.
You buy a house for 100k, sell it for 150k. You make 50k (50%) return on investment.
You sell 25% of it for $25k (75K net), and realise $112.5k (75% of the $150k sale) for a $37.5K return on a $75k net investment - or 50%.
GS buys 25% of it for $25k, realises $37.5k for a $12.5k (50%) net return on investment.
50% x 100k = 50% x (100k-25k+25K) = 50% x 75k + 50% x 25K
If you can gaze into a crystal ball and spot that 50% return coming and want to cut GS out of the profits, then well done you - set up your own investment company and become the next Warren Buffet.
But bear in mind that if GS had the same crystal ball (and they pay a lot of people to pay more attention to the housing market than you do), they could just buy the house themselves, pocket the whole $50k net sale, and charge you rent at the same time for an even greater profit.
The play here is that GS has no interest in actually managing the property - you essentially do that on their behalf, but (presumably) you also keep the benefits of managing too (renting out a room, or the whole house, or even just the benefit of, you know, having a house to live in). So they avoid the hassle of having to set up a property management division, and by taking lots of minority stakes across thousands of houses they diversify against the risk of any particular geographic housing market having a downturn.
There's nothing inherently scammy about a minority equity investment in property. The caveats would be (a) if there's wackiness in the valuation to overestimate the equity % they're buying for their 25k, or (b) if there are any clawback clauses in the case that the property is sold at a loss. I'm sure that there's a bunch of administration fees, but as long as they're priced appropriately (there's value from GS providing liquidity to a cash-strapped owner) then it's not really that shit of a deal on its face.
They'll probably bundle them up as securities to sell and make money now rather than 30 years down the track, and while they don't have the same ongoing cash revenue streams that bundled mortgages have, there are certainly institutions who would buy up these longer-term assets. It's arguably safer than the GFC securitization crisis in the short term, as the longer "payment" terms for the underlying "borrowers" (I'm using those terms loosely as it's not really a loan) gives a better ability to cover mortgage payments, which reduces the risk of defaults and resultant housing market collapse. The danger would be that you might end up with a bunch of retirees in 30 years who hadn't put anything aside, and then get home sales forced en masse to recover the investments.
On the one hand, a deal like that is a way to diversify your investments. If the housing market crashes more than the stock market, it would presumably be a good deal. (Those are heavily correlated, though. Maybe there's some situations where you'd want capital in a safer asset class than your home? I dunno.)
On the other hand, housing prices aren't *just* the market. A house is something you can improve, or allow to deteriorate, by either investing in it or failing to.
Creating a new investment product that self-selects for people expecting the value of their home to decrease strikes me as risky for that reason.
On the one hand, a deal like that is a way to diversify your investments. If the housing market crashes more than the stock market, it would presumably be a good deal. (Those are heavily correlated, though. Maybe there's some situations where you'd want capital in a safer asset class than your home? I dunno.)
On the other hand, housing prices aren't *just* the market. A house is something you can improve, or allow to deteriorate, by either investing in it or failing to.
Creating a new investment product that self-selects for people expecting the value of their home to decrease strikes me as risky for that reason.
I don't think there's much chance of that last point happening.
For example, you have a $100k house and you suspect the value will decrease, so you get this $25k equity payment. The value drops and you sell the house for $90k, so GS only gets $22.5k back - take that, capitalist scum!
Except you get $90k-$22.5k = $67.5k for the sale, plus the $25k initial payment for $92.5k total... where you could have got $100k just selling the whole house before the price drop that you predicted.
The whole point of equity investments is that it aligns incentives and risk so no-one wants the asset to lose value. The only way to "force" the divestment without selling the house at a loss is to wait out the investment period, and good luck trying to either (a) predict a house that you think will hit a slump in exactly 30 years time, or (b) deliberately sabotaging decades of value growth worth potentially tens of thousands of dollars in order to reduce your payback by a few thousand.
Except you get $90k-$22.5k = $67.5k for the sale, plus the $25k initial payment for $92.5k total
Counting that 25k ar the time of the payment as exactly 25k at the time of sale isn't going to give you a full accounting of the opportunity here. Money now is worth more than money later, often because it gets invested and appreciates.
Owning a smaller stake in your home means you benefit less from improvements and maintenance, which would seem to lead to a statistically lower return on these houses than the general market.
But yeah, limiting the percentage that the bank buys into would at least ensure that the owner is still motivated to keep the price high. 75% motivated is still pretty motivated.
Except you get $90k-$22.5k = $67.5k for the sale, plus the $25k initial payment for $92.5k total
Counting that 25k ar the time of the payment as exactly 25k at the time of sale isn't going to give you a full accounting of the opportunity here. Money now is worth more than money later, often because it gets invested and appreciates.
Owning a smaller stake in your home means you benefit less from improvements and maintenance, which would seem to lead to a statistically lower return on these houses than the general market.
But yeah, limiting the percentage that the bank buys into would at least ensure that the owner is still motivated to keep the price high. 75% motivated is still pretty motivated.
Re: time value of money, that's true but unnecessary to illustrate the point - as any interest earned on the 25k at t=0 would also apply to the 100k where you sold the entire house at t=0.
It just makes the gap wider and reinforces the point "why would you only sell X% of a loss-making asset when you could sell 100%?" Bear in mind that GS don't have to sign the agreement if they also suspect your house is going to lose value (through market slump, neglect, or deliberate damage).
Ford Motor Company is reportedly preparing to initiate major layoffs aftersuffering a blow to profits of at least $1 billion due to tariffs enacted by President Donald Trump.
I've been wondering about something with government debt (Yes, I know it's not as important as people make it out to be, except when people screw with the orderly payment of it).
What I've got so far.
Alright, so government bonds are part of the government debt. The government needs to make up the difference between budget and income, and does that partly by issuing bonds and securities, and partly by telling parts of their own government "Look, you know we're good for it" and giving them special bonds and securities. A portion of those make it into private hands, and the government pays interest until the security matures.
What's stopping people who own the bonds and securities from forgiving the debt? Not the government defaulting on the debt, but the people who hold the debt simply choosing to cancel the debt?
What would that do? Would it cause inflation? Can a currency based on the ability to continue paying its debts even suffer inflation from debt forgiveness if it can still pay the debts?
I am not sure it would have an effect. But if it did it would be expansionary. It should be exactly the same as if people simply gave money to the USG. Which is like taxes... but without any of the arguments as to why taxes are bad.
This would lower interest rates and the govt would be able to borrow more as a result, which is expansionary. If the government did not borrow more as a result then the fed would likely reduce the money supply to hit the same target interest rate.. which would reduce inflation. If neither then interests rate would be lower and that would be that.
Except you get $90k-$22.5k = $67.5k for the sale, plus the $25k initial payment for $92.5k total
Counting that 25k ar the time of the payment as exactly 25k at the time of sale isn't going to give you a full accounting of the opportunity here. Money now is worth more than money later, often because it gets invested and appreciates.
Owning a smaller stake in your home means you benefit less from improvements and maintenance, which would seem to lead to a statistically lower return on these houses than the general market.
But yeah, limiting the percentage that the bank buys into would at least ensure that the owner is still motivated to keep the price high. 75% motivated is still pretty motivated.
Re: time value of money, that's true but unnecessary to illustrate the point - as any interest earned on the 25k at t=0 would also apply to the 100k where you sold the entire house at t=0.
It just makes the gap wider and reinforces the point "why would you only sell X% of a loss-making asset when you could sell 100%?" Bear in mind that GS don't have to sign the agreement if they also suspect your house is going to lose value (through market slump, neglect, or deliberate damage).
Presumably, you would do this so you can still live in a more expensive place in the intervening period, while some of its value is invested elsewhere, going up instead of down. While possibly saving on upkeep costs.
Though I guess that's not smart if you think there's another place you could buy to live in which would go up in value.
Ford Motor Company is reportedly preparing to initiate major layoffs aftersuffering a blow to profits of at least $1 billion due to tariffs enacted by President Donald Trump.
So. Much. Winning.
Some numbers from the article, they reference possibly 12% layoffs. Or over 24K jobs. But that is worldwide, though it's still likely to be disproportionately American jobs.
Seems Trump IS trying to undo everything that Obama did. Obama saves the American auto industry. Trump goes about setting it's destruction.
Yet a good portion of the lunchpail Joes are the ones that put his orange ass in office. Wonder if he'll organize some other bailout to minimize the destruction of his "good and easy to win" tariff wars, like he did with agriculture.
I understand that the Detroit factories employ plenty of African American workers. He may not be risking many votes with this at all.
Ford Motor Company is reportedly preparing to initiate major layoffs aftersuffering a blow to profits of at least $1 billion due to tariffs enacted by President Donald Trump.
So. Much. Winning.
Some numbers from the article, they reference possibly 12% layoffs. Or over 24K jobs. But that is worldwide, though it's still likely to be disproportionately American jobs.
Seems Trump IS trying to undo everything that Obama did. Obama saves the American auto industry. Trump goes about setting it's destruction.
Yet a good portion of the lunchpail Joes are the ones that put his orange ass in office. Wonder if he'll organize some other bailout to minimize the destruction of his "good and easy to win" tariff wars, like he did with agriculture.
Ford might be using tariffs as a scapegoat for further repositioning their business for a world where individual car ownership rapidly declines
Banks who have big auto loan businesses are also trying to reposition because dang millennials and their ride sharing and scooters won’t buy no dang cars...
Ford Motor Company is reportedly preparing to initiate major layoffs aftersuffering a blow to profits of at least $1 billion due to tariffs enacted by President Donald Trump.
So. Much. Winning.
Some numbers from the article, they reference possibly 12% layoffs. Or over 24K jobs. But that is worldwide, though it's still likely to be disproportionately American jobs.
Seems Trump IS trying to undo everything that Obama did. Obama saves the American auto industry. Trump goes about setting it's destruction.
Yet a good portion of the lunchpail Joes are the ones that put his orange ass in office. Wonder if he'll organize some other bailout to minimize the destruction of his "good and easy to win" tariff wars, like he did with agriculture.
Not likely. As much as these guys enjoy running up their deficits the kind of bailout needed here is better positioned as a raise of minimum wage. But that would require a wider economic view than "fuck you, got mine".
But also I've noticed a pattern. Between these tariffs and the sorts of racist immigration policies that exclude places most impacted by climate change it really looking a lot like an isolationist movement from the 19th century.
All opinions are my own and in no way reflect that of my employer.
Ford Motor Company is reportedly preparing to initiate major layoffs aftersuffering a blow to profits of at least $1 billion due to tariffs enacted by President Donald Trump.
So. Much. Winning.
Some numbers from the article, they reference possibly 12% layoffs. Or over 24K jobs. But that is worldwide, though it's still likely to be disproportionately American jobs.
Seems Trump IS trying to undo everything that Obama did. Obama saves the American auto industry. Trump goes about setting it's destruction.
Yet a good portion of the lunchpail Joes are the ones that put his orange ass in office. Wonder if he'll organize some other bailout to minimize the destruction of his "good and easy to win" tariff wars, like he did with agriculture.
Ford might be using tariffs as a scapegoat for further repositioning their business for a world where individual car ownership rapidly declines
Banks who have big auto loan businesses are also trying to reposition because dang millennials and their ride sharing and scooters won’t buy no dang cars...
Ride sharing isn't affecting Ford or driving their repositioning. They announced months ago they were transitioning away from cars to focus solely on trucks because Kia and Hyundai have driven down their margins so low in the US.
Ford Motor Company is reportedly preparing to initiate major layoffs aftersuffering a blow to profits of at least $1 billion due to tariffs enacted by President Donald Trump.
So. Much. Winning.
Some numbers from the article, they reference possibly 12% layoffs. Or over 24K jobs. But that is worldwide, though it's still likely to be disproportionately American jobs.
Seems Trump IS trying to undo everything that Obama did. Obama saves the American auto industry. Trump goes about setting it's destruction.
Yet a good portion of the lunchpail Joes are the ones that put his orange ass in office. Wonder if he'll organize some other bailout to minimize the destruction of his "good and easy to win" tariff wars, like he did with agriculture.
Ford might be using tariffs as a scapegoat for further repositioning their business for a world where individual car ownership rapidly declines
Banks who have big auto loan businesses are also trying to reposition because dang millennials and their ride sharing and scooters won’t buy no dang cars...
Ride sharing isn't affecting Ford or driving their repositioning. They announced months ago they were transitioning away from cars to focus solely on trucks because Kia and Hyundai have driven down their margins so low in the US.
Sure sure it’s an interesting trend* but definitely on a time scale longer than might necessitate this move from Ford.
*a trend that banks are definitely actively planning for right now
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ButtersA glass of some milksRegistered Userregular
I don't think so. GM isn't doing this neither is Chrysler. Ford just has stupid margins on their trucks thanks to customer brand loyalty and they think this move will increase dividends for shareholders.
If you've never priced out a pickup you'd be shocked to see what they charge for options compared to cars. The margins are absolutely insane.
Seems Trump IS trying to undo everything that Obama did. Obama saves the American auto industry. Trump goes about setting it's destruction.
Technically Ford didn't take TARP money.
Yeah but if I remember correctly if the other two hadn't been bailed out it would have taken a sledgehammer to part of Ford's supply chain and the odds of them surviving that shock we're basically zero.
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ButtersA glass of some milksRegistered Userregular
I'd like to see proof that a majority of pickup sales are by businesses but even if they are high-end trucks have slowly (thanks to relatively low gas prices) become the best selling luxury vehicles in the US.
Fancy trucks are the new sports cars for rural and suburban office workers who like to imagine they are tough farmers. They aren’t intended for work use - too pretty.
I'd like to see proof that a majority of pickup sales are by businesses but even if they are high-end trucks have slowly (thanks to relatively low gas prices) become the best selling luxury vehicles in the US.
Joe the Plumber isn't buying a King Ranch or Platinum F-150 and it's those vehicles Ford is making their absurd margins on.
Ford as a company lives and dies on fleet sales, especially in the U.S. and Europe. Local laws preventing governments from buying foreign cars is a major lifeline to the industry.
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With optional bonus points for how they do the valuation to determine what percentage the $25k is right now. Because I can easily see them basing it on your purchase price and targeting the offer to people that bought after the housing crash when prices were depressed.
But hilariously, not food stamps for now, because it has its own funding sources for the moment.
But yeah, agriculture is one of the biggest and most productive portions of the American economy, and the party that supposedly is all about business is willing to let it crash. So there's that.
Most people don't have a 75% down payment. Even the standard 20% down payment isn't that common anymore.
I'd have to assume that there's at least some interest payment involved, otherwise that potential 30 year wait until payment gets ugly. Though they might also be targeting starter home areas to increased the odds of a sale.
Seriously though, the % of the sale price bit really stands out as unusual.
SNAP was explicitly designed to be run through the USDA because tying it to agriculture subsidies would protect it from being dismantled by conservatives. There are a lot of similar strategems in place in American government to reduce partisan sabotage.
They do function as one though, and since SNAP can be used directly at farmers markets it can even directly support small farmers.
It is great for farmers, big supermarkets, small markets and agribusiness. And the poor! Everyone wins and market forces drive better competition. Which is why they must be opposed.
Which means you only got $112.5k from the house sale despite "average" purchase prices going up 50%. GS makes 50% return on their cash investment. You've lost 25% of your home value. Unless you think you can make more than that return on their loan, it's a shit deal.
And it worked both ways to encourage urban areas not to dismantle the ag subsidies. This way both urban and rural voters have something in the pot.
Well 112.5k plus the 25k you had in liquid cash during that period...so they made 12.5k on a 25k loan which is still fucking absurd. It's a bad dumb idea.
Yeah this sounds like the Canadian Reverse Mortgage stuff from these guys. They play a lot of ads to convince old people to sign up and give them free money. I still don't understand how this is legal as it always felt predatory and sc[a/u]mmy.
It differs in that they don't own your house after 30 years, you just owe them a pile of cash. They don't care how you get it; but it will probably require selling/refinancing your house (which they probably have a lien on).
The other shitty part is that if you do sell your house, you owe what's left on your mortgage plus what you now owe them. So all things being equal, its like adding 25k to your closing costs.
That was what they were up more or less up front about (spun as positives, of course). Sadly, the offer got tossed before I could review the fuckery in the fine print.
You buy a house for 100k, sell it for 150k. You make 50k (50%) return on investment.
You sell 25% of it for $25k (75K net), and realise $112.5k (75% of the $150k sale) for a $37.5K return on a $75k net investment - or 50%.
GS buys 25% of it for $25k, realises $37.5k for a $12.5k (50%) net return on investment.
50% x 100k = 50% x (100k-25k+25K) = 50% x 75k + 50% x 25K
If you can gaze into a crystal ball and spot that 50% return coming and want to cut GS out of the profits, then well done you - set up your own investment company and become the next Warren Buffet.
But bear in mind that if GS had the same crystal ball (and they pay a lot of people to pay more attention to the housing market than you do), they could just buy the house themselves, pocket the whole $50k net sale, and charge you rent at the same time for an even greater profit.
The play here is that GS has no interest in actually managing the property - you essentially do that on their behalf, but (presumably) you also keep the benefits of managing too (renting out a room, or the whole house, or even just the benefit of, you know, having a house to live in). So they avoid the hassle of having to set up a property management division, and by taking lots of minority stakes across thousands of houses they diversify against the risk of any particular geographic housing market having a downturn.
There's nothing inherently scammy about a minority equity investment in property. The caveats would be (a) if there's wackiness in the valuation to overestimate the equity % they're buying for their 25k, or (b) if there are any clawback clauses in the case that the property is sold at a loss. I'm sure that there's a bunch of administration fees, but as long as they're priced appropriately (there's value from GS providing liquidity to a cash-strapped owner) then it's not really that shit of a deal on its face.
They'll probably bundle them up as securities to sell and make money now rather than 30 years down the track, and while they don't have the same ongoing cash revenue streams that bundled mortgages have, there are certainly institutions who would buy up these longer-term assets. It's arguably safer than the GFC securitization crisis in the short term, as the longer "payment" terms for the underlying "borrowers" (I'm using those terms loosely as it's not really a loan) gives a better ability to cover mortgage payments, which reduces the risk of defaults and resultant housing market collapse. The danger would be that you might end up with a bunch of retirees in 30 years who hadn't put anything aside, and then get home sales forced en masse to recover the investments.
On the other hand, housing prices aren't *just* the market. A house is something you can improve, or allow to deteriorate, by either investing in it or failing to.
Creating a new investment product that self-selects for people expecting the value of their home to decrease strikes me as risky for that reason.
For example, you have a $100k house and you suspect the value will decrease, so you get this $25k equity payment. The value drops and you sell the house for $90k, so GS only gets $22.5k back - take that, capitalist scum!
Except you get $90k-$22.5k = $67.5k for the sale, plus the $25k initial payment for $92.5k total... where you could have got $100k just selling the whole house before the price drop that you predicted.
The whole point of equity investments is that it aligns incentives and risk so no-one wants the asset to lose value. The only way to "force" the divestment without selling the house at a loss is to wait out the investment period, and good luck trying to either (a) predict a house that you think will hit a slump in exactly 30 years time, or (b) deliberately sabotaging decades of value growth worth potentially tens of thousands of dollars in order to reduce your payback by a few thousand.
Counting that 25k ar the time of the payment as exactly 25k at the time of sale isn't going to give you a full accounting of the opportunity here. Money now is worth more than money later, often because it gets invested and appreciates.
Owning a smaller stake in your home means you benefit less from improvements and maintenance, which would seem to lead to a statistically lower return on these houses than the general market.
But yeah, limiting the percentage that the bank buys into would at least ensure that the owner is still motivated to keep the price high. 75% motivated is still pretty motivated.
It just makes the gap wider and reinforces the point "why would you only sell X% of a loss-making asset when you could sell 100%?" Bear in mind that GS don't have to sign the agreement if they also suspect your house is going to lose value (through market slump, neglect, or deliberate damage).
What I've got so far.
Alright, so government bonds are part of the government debt. The government needs to make up the difference between budget and income, and does that partly by issuing bonds and securities, and partly by telling parts of their own government "Look, you know we're good for it" and giving them special bonds and securities. A portion of those make it into private hands, and the government pays interest until the security matures.
What's stopping people who own the bonds and securities from forgiving the debt? Not the government defaulting on the debt, but the people who hold the debt simply choosing to cancel the debt?
What would that do? Would it cause inflation? Can a currency based on the ability to continue paying its debts even suffer inflation from debt forgiveness if it can still pay the debts?
This would lower interest rates and the govt would be able to borrow more as a result, which is expansionary. If the government did not borrow more as a result then the fed would likely reduce the money supply to hit the same target interest rate.. which would reduce inflation. If neither then interests rate would be lower and that would be that.
Presumably, you would do this so you can still live in a more expensive place in the intervening period, while some of its value is invested elsewhere, going up instead of down. While possibly saving on upkeep costs.
Though I guess that's not smart if you think there's another place you could buy to live in which would go up in value.
I understand that the Detroit factories employ plenty of African American workers. He may not be risking many votes with this at all.
Ford might be using tariffs as a scapegoat for further repositioning their business for a world where individual car ownership rapidly declines
Banks who have big auto loan businesses are also trying to reposition because dang millennials and their ride sharing and scooters won’t buy no dang cars...
Not likely. As much as these guys enjoy running up their deficits the kind of bailout needed here is better positioned as a raise of minimum wage. But that would require a wider economic view than "fuck you, got mine".
But also I've noticed a pattern. Between these tariffs and the sorts of racist immigration policies that exclude places most impacted by climate change it really looking a lot like an isolationist movement from the 19th century.
Technically Ford didn't take TARP money.
Ride sharing isn't affecting Ford or driving their repositioning. They announced months ago they were transitioning away from cars to focus solely on trucks because Kia and Hyundai have driven down their margins so low in the US.
Sure sure it’s an interesting trend* but definitely on a time scale longer than might necessitate this move from Ford.
*a trend that banks are definitely actively planning for right now
If you've never priced out a pickup you'd be shocked to see what they charge for options compared to cars. The margins are absolutely insane.
Yeah but if I remember correctly if the other two hadn't been bailed out it would have taken a sledgehammer to part of Ford's supply chain and the odds of them surviving that shock we're basically zero.
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https://www.forbes.com/sites/jimgorzelany/2016/01/25/the-best-selling-luxury-cars-are-now-pickup-trucks/#61bd9f3f3582
Joe the Plumber isn't buying a King Ranch or Platinum F-150 and it's those vehicles Ford is making their absurd margins on.
Ford as a company lives and dies on fleet sales, especially in the U.S. and Europe. Local laws preventing governments from buying foreign cars is a major lifeline to the industry.