With the Euro down 20% against the dollar and the price of lead down 62% when do you think the price of guns and ammo will start down or will the mfgrs. just pocket the new found profits?

bill

I like to watch the Parker Repros for sale on GunsInternational. It seems like more guns are becoming available for sale, but the prices aren't going down any. I bet it will be the same with new guns and ammo; maybe they won't go up for a while. We'll see.
Joe

I believe with everything moveing back and forth so fast it will be a month or so after elections before companies make any changes.

Shame on profits. Profits are killing our free market economy. Everybody should work for nothing. From each according to his ability; to each according to his need. There is so much greedy profiteering going on that American industry can't afford to employ Americans anymore. But one needs to ask where these supposed profits are going...

Just this morning the Associated Press had article about Chrysler LLC being gobbled up by GMC and possibly shutting down Dodge and "streamlining" down the rest of the Chrysler line. The president, not of Chrysler or GMC, but of the UAW Local 1268 in nearby Belvidere IL, put his spin on the transaction: "The problem is that we can't compete with workers and factories in other countries who have no human rights, no environmental standards, no safety standards."

The day has come when American industry's "profits" have been gobbled up by "human rights (ie. special-interest litigation encouraged by excessive legislation coupled with an activist judiciary), "environmental concerns" (snail darters, drowning polar bears, and saving a precious 2,200 acres--less than 4 square miles-- of Alaska's almost 600,000 square miles from drilling for oil), and "safety standards" (Catch-22 OSHA regulations, and a Pandora's box of social regulating and intervention). The result is that a multitude of employees are soon to be unemployed by their own misdirected "profiteering." Time and again we see that workers are threatening or actually going on strike, not for current wages and/or benefits, but for future and speculative issues. Case in point:

Winchester leased its New Haven CT plant facility and licensed the Winchester trade mark and Model 70 trade mark to one of these profit-oriented corporate entities. The union negotiated a "poison pill" contract that forbid the corporation from making the Model 70 during the term of the contract if it moved the operation overseas. Keep in mind that the Model 70 was out of patent and all that was involved was attaching the Winchester name and "Model 70" to a product that could be made anywhere. The plant was closed, the employees were out of jobs...query: What did the union gain from the "poison pill" that denied the business the flexibility to seek out profits elsewhere?

And the better question is, what was so non-economic in New Haven that even made the issue a topic of consideration?

Which begs the larger question: What is driving American businesses out of America? Answer: Lack of profits. And guess what; without the profit incentive a free market economy fails and we are no longer free.

American industries are either out of the country or out of business. Wage slaves take heed! From each according to his ability; to each according to his need. I forget whether it was Marx or Engles or Lenin who coined the phrase, but the American version smacks of Marxism--Groucho. And is best characterized by another American pundit, Pogo: "We have found the enemy and he is us."

Whenever I see one of these knee-jerk comments assailing "profits" or suggesting or implying that that industry is ipso facto profitable, I wonder whether the knee-jerker is willing to work for nothing, or does he expect that the investments that fund his anticipated retirement should operate at a socialized break even so there are no profits to pay dividends. If he works for Chrysler LLC, it looks like all the supposed profits are going to evaporate. And guess who also owns Remington Arms? I've been through the factory on the Erie Canal, which reminds me of an old joke:

Two retired captains of industry were sitting on a beach in Florida, comparing notes. One told of how tough business had become with the over- and conflicting-regulation at every level of government, plus the union's reach exceeding their grasp of the precarious situation relative to overseas competition in a global economy. But then a fire destroyed the first man's plant facility, and he took his insurance pay-out and retired to Miami Beach.

The second man said that his story was almost exactly the same, but it was a flood that took its toll...

And the first man asked, "How did you arrange a flood?"

The idea that profits are bad is a bad idea that has gained currency in the current "class warfare" political environment. Look what lack of profits has done to the airline industry: bankrupt! And the "big three" auto industry: on the verge! The textile industry and shoes; Americans would be naked but for goods imported from overseas. We would immobile but for oil imported from overseas. Three car makers are soon to be two, when all the best selling vehicles are foreign. And liquidity in the financial sector? History!

And the whipping boy is Nasty Profits. To paraphrase Yogi Bera, "American industry is so profitable that nobody makes anything anymore." EDM

Amen!
and along with profits are the rants about the "rich". And Obamas favorite "economic justice". i.e. redistribution of income. Marxism at its finest.

Japan? Germany? Sweden? England? (Jags will still be built in England, even under Tata ownership.) Union bosses are so full of crap!

The economic conditions and bad decisions that have hurt the domestic manufacturers (i.e., big trucks and SUV's) are also hurting companies like Toyota. They have put Tundra production on hiatus, and are heavily discounting inventory

Post deleted by JayCee

Nice rant Ed but what does that have to do with the price of a Euro and the fact that lead has fallen 60%. I thought the "American way" was competition not promoting greed. I guess lawyers charge their price regardless of the economy.
bill

Ed, your rant fails to take into account the very ideas that allowed America to become an economic superpower in the first place. You are guilty of condoning the very same behavior that has brought on the latest wave of economic woes.

What am I talking about? All things in moderation, that's what.

There's nothing wrong with profitability - indeed, it is a healthy and necessary driver in any economy. But, it's a sign of weakness and lack of intelligence to presume there is no cap on the amount of profit one can and should make. That's right, I'm talking about good old greed which is even mentioned as far back in time as the Bible.

Show me an auto executive, or any executive in any business, who says he is barely making ends meet and I'll show you a liar. I'm sick to death of hearing people whine "We had to move production to China because we couldn't make any money here." What they are really saying is "Rather than having this business support my family on $1 Million per year, and 200 other families at $50,000 per year, I found a way to make $6 million per year for my family and those other 200 families can go piss off.'

I don't want to make this personal but the mere fact that you were able to retire via lawyering at 27 or some such age speaks volumes. Somebody somewhere took a screwing to make that happen.

Right on, Bill. The meltdown was the greedy finally eating themselves, not profits in the usual sense, as we know them. Bank accounts are now going to the big countries. Governments have become guarantors of financial stability. The small countries with banks bigger than their economies are in big trouble---Iceland going to IMF, the proudly independent Scandinavian countries considering joining the euro.

As for factories closing from globalization. labour has become globalized, too--- something left out of our embrace of globalization. With Europe now looking to the EU for salvation, maybe it's time to renegotiate NAFTA (sans Mexico which isn't ready) and really launch the continent, economically, environmentally with security into the 21st century. With American investment to reduce the environmental impact of our fabulous oil sands, the US could get all the oil etc.

profit and greed are not mutually exclusive. However, the ones getting more greedy than the execs making 200 Million year are the goverments that tax income and profits.

In round numbers, between the goverments at the state, federal and sometimes local level, "the govt" become a 50% partner in many busness with none of the risk, investment or sweat that the business owner puts in. add what the fed takes in income tax %, both ends of FICA (which is a tax) state income taxes, and city or county income taxes (there are places this exists) and a small businessman gives up half or more of his profits to goverment.

Corporate entities that pay the huge salaries that they do are actually an anonomly in the grand scheme. I mean this because the majority of business in this country is small business.(under 500 employees) Small business creates more jobs, more personal wealth for more individuals than "big busniess".
unfortunately, they also pay dearly for the privilege of being in business.

Like the cost of gas, we bitch about the oil companies (Big Oil) yet based on investment, the Federal Govt makes far higher profits off of gas and oil that the oil companies could ever dream about (with no onvestment or risk) yet no one complains about the excess profits of the govt.

which brings me to my question; what would be your definition of excess profits?
be carefull!!!!

I'll take a stab at excess profits, Brian. Profits should serve a common good. Business should make a return on investment that provides fair remuneration to owners, employees and benefits to the community.

Profits are excessive---take Lehman Brothers, one of America's most distinguished banks, as an example---where executives and managers took home as much as shareholders, contributing to widespread misery.

As for governments, profits from the private sector are paid into public treasuries to pay for sidewalks, garbage removal, social amenities, public infrastructure, overseas assistance---and wars.

If there were "profits" for government---excess of returns over outlay---Mr. McCain would be coasting to victory on the coattails of Mr. Bush. But that ain't so. Outtlay vastly exceeds taxpayers' returns. China holds the chits.

Just this past week, a guy who is local to me , told a story about the automotive trim industry. He assisted in moving a plant from my area that made interiors. The people working there were not getting rich at just under $10 an hr. on a base pay, but many were making incentive for another 35% increase. So with that in mind, they were good workers, right here in the USA. This guy tells me how they took the jobs to Mexico and were paying the employees .90 an hour. Rejection was high, waste was high but at only .90 an hour. But,they still were very well off from the manufacturing stand point. Of course, the USA people who lost their job and had been employed, are no longer able to buy the cars, the interiors they were making were installed in. How many cars, do you suppose an employee making .90 an hour buys? So now past employees and new employees can neither buy the product. Did the car come down in price, because of lower labor costs? NO. Where did the money go? Duh The guy was kind proud of his role in relocating this plant to Mexico and he blamed the USA cost of labor for their job loss. Guess what though, he lost his job too!!! MORE DUH! Think of all the satellite jobs lost. Think of the real estate market. Retail sales. Tax loss. Where does all this money come from, for the 700 billion buy out and future stimulus checks? On TV I watched an oil CEO tell of his 10 million a year salary. Do I deny him a good wage? When is that wage exessive? For that matter, why I am watching a pro athlete make huge millions a year. I don't watch.

Those who feel that there is no such thing as excessive profit - I hope they have a 19 year old daughter in college. I hope she is driving home one weekend and her car breaks down with a flat tire. I hope the tow truck driver senses and opportunity to maximize his return on investment in his tow truck and charges her $713.45 to tow her car back to his garage. I hope the tow truck driver realizes an avenue for increased revenue by charging her $2643.09 for 4 new tires and a wheel rotation. I hope the tow truck driver detects the potential for expanding his business in order to better serve his client base by encouraging her to buy a new battery, too, for only $432.24.

We can hardly expect the tow truck driver to exhibit any sort of restraint when we have executives making $23 million for getting fired, can we?

Another example of labour going global, Dave, at extradordinary expense to our communities.

I see million-dollar athletes differently. There was a mighty hoo-raw when Wayne Gretzky signed for a million dollars a year to play hockey.

Was he worth it? Is Sidney Crosby, who my grandsons played against, worth millions? I think so because they're in the entertainment industry, like Oprah.

Actors are paid vastly more for pretending to be someone else. At least hockey players break a sweat. Tiger doesn't and I don't play but I watch his skills.

Wow, Greg!! They must charge a lot more to be towed where you are, than the fifty bucks or so around here. Be as it may, I like paying $25.00 for the same tennis shoes I paid $125.00 for 10-15 years ago. You guys have to decide which you want.

You don't get it Jimmy - the $50 tow job is old school and is for schmucks. Why should a tow truck driver work for a measly $50 when he has your daughter in his crosshairs and knows he can get her to cough up $713.45? If you keep thinking old school you'll never maximize shareholder value or grow your business. This is the new frontier. I'm worried about you.

GregSY,
I do have a 20 yr old daughter in college (my third of five to go through college) The other two are still in elemetary of high school.
what I asked was for people to give their definition of "excess profits".
King Brown, profits arent for the comon good. They are for the person who took the risk., taxes are for the common good. But when the govt. takes more than what the business owner makes, that is wrong. I do not think its right for the bottom 40% of wage earners in this country not pay any income taxes. Thats right, (US Govt statistics), no taxes. But with Socialism, thats the way it is.
Profit is the incentive for people to succeed. Success creates wealth which through reasonable taxes, provides for esential services. That is why the difference in state tax rates and some states not even having income taxes.
And on that note, name me one tax that created business, expanded the economy or assisted busness!

Bill Gates is probably the one person responsable for creating more indivisual wealth in this country and in the world. Shold he be begrudged his billions. NO!
More power to him.


This is classic class warfare. I find it ironic that so many will condemm the "fat cat CEO" but when a person makes 25 Million a year to play basketball or baseball, they are a sports hero???????????
Or the Hollywood elitist who makes 50 million ayear on films, doesnt sign for less than 20 Mil. BS!!!
Its easy to villify CEO's. Convenient, they fit a stereotype. But what fraction of a per cent of the business communjity are they? Its the same with gunowners. A fraction of a % does something wrong and the lot is condemmed. Hmmm..........Far as I am concerned, you are treating the effects not the cause by slamming the CEO's who made millions. The Senators and Representatives who signed the bail out are the ones who should be put in jail. Their exesses are far worse.

We had a bear guide in Alaska who charged a grand a day twenty one day min. Clients stayed at his house food included in price and he was booked most of the time.His brothers charged half that and ten day min. but were younger and you camped out. Many times a 21 day hunter would get his bear in the first few days but decide to stay around and take pics as the time was paid for. Well the guides wife was a drunk on the highest level and not that great of a cook and with in a few days of takeing a bear most would just say by and leave,no tip needed. Well one hunter came to town stopped by the shop to get paper work in order and was all ready complaining about the houseing. Later that day our big time guide got him his bear a mile from town heading to the airport to do a fly around and check things out. It was a nice bear to be sure.So with in 24 hours of a 21 day hunt the bear was bagged and realy to be made into something. The hunter realy wanted to leave town but also wanted some money back,no way did he want to spend 20 more days with the guides wife and her drinking. No deal on money back but will take you to the airport today if you like. On the third day the hunter started messing in his pants and would just sit by the stove and watch t.v., he come by the sporting goods store to visit some,clean of course. On the sixth day the hunter was given $15,000 dollars back and taken to the airport.The guide complained about this hunter till I moved and may still be complaining but we all knew Ron had finely met his match and cheared the hunter. When you spend money you always have some control over it.

GregSY,
Get with the program!
Based on charging $713.45 per tow, we can borrow several million dollars, sell the truck, create TowMater bonds, and just manage the debt.

Can't we?

Yeti there is no need to manage the dept.Just take the money and run.

EDM is right! Let the Market prevail and to the victor goes the spoils!!! A lot of AIG folks made 100's of millions ..... We have to bail them out ..... but who cares. How about those poor investment bankers at Lehman Bro's. ........ I hope they can make their millions in bonuses last a few years. Let's deregulate EVERYTHING ..... Who cares that your 401K is now worth about 50% of what it was ...... You took the risk and the market took your retirement. I guess you'll have to live on beans ..... and whatever you can shoot.

Al

DAVE W.
This thread is getting "way" off the purpose of this forum.
Mike B.

I'm done

You think maybe Dick and Craig who sell 50% cut barrel Sterlingworths for $3000.00 might actually work for Lehman Bros., and are attempting to create a bubble in used gun prices that will inevitably burst? The only answer is for the Gov't to regulate gun prices. OK, we're back on topic. Everyone can breath easy.

Bill: When the EU (minus GB) switched to the Euro about a decade ago, I was in the French islands spending 7.2 francs that I bought for $1.00 USD. The franc converted to Euros at 6.55; the first Euros I bought cost about $.90...and the price escalated over the past years to over $1.50, and now, given the economic discombobulations in Europe and America, the exchange rate is trending lower, seemingly in our favor, or maybe not.

A weak dollar ($1.50 to the Euro) means Americans are employed making products that are bought by EU persons who consider what we make and sell a good buy. The weak dollar means increased exports and a favorable balance of payments; in other words, a surplus of foreign money being earned by American businesses, which translates to expanded plant facilities and increased employment. As the US dollar strengthens our exports will decline, fewer workers in export-oriented industries will earn overtime, and some will become unemployed. So from the standpoint of American industry and American jobs, a weak dollar is a good thing.

Yet there are people, Bill for example, who equate a falling Euro and rising US dollar with selfish greed and unconscionable profits. But whose? Maybe Bill's! You only benefit from a stronger US dollar if you are chaffing at the bit to send your share overseas. For the American worker and American investor, a strong dollar is a bad thing in so far as production decreases and jobs are lost.

Every American has a vested interest in the continued prosperity of his or her employer on many levels; first from pay check to pay check; second, in the expectancy of continued job security; and thirdly, in the need to invest in one's retirement.

The post-WWII boom era is over. It used to be that American industry grew predictably by leaps and bounds while Europe and the rest of the world were emerging from war devastation or agrarian feudalism. The world was our customer because no one else was making anything. But this began to change in the 1960s, and was certified in 1971, when the USA could no longer dictate the price of gold at $35 per ounce. Once gold began to float and foreign currencies sought their own level, America became just another cog in the wheel of the world economy (the dreaded "D" word: globalization). But to the extent that our economy was less controlled than most others, we were more free to innovate and cope with the changes endemic to time marching on. But this is changing...

When I see a poster on a Forum that revolves around a preference for something as luxurious and non-essential as fine old double guns, carping about the "American way promoting greed" and getting his licks in about dreaded lawyers and characterizing a well thought analysis as a "rant"...well, people, it's all over.

Methinks that Bill wouldn't know a Euro if it bit him. And his fixation on a 60% decline in the price of lead: Is he heavily invested in commodities? As to a "rant," it seems to me that preemptively attacking "profits" and "greed" on a double gun Forum is somewhat like the psycho-ink-blot-test, where the patient is shown a nebulous blot of ink and then tells the doctor what ails him. But for most thinking people, without an axe to grind, an ink blot is simply a blot of ink.

For a few disturbed persons the ink blot brings out all their hidden terrors, like fear of profits, and the belief that everyone but themselves being greedy. But isn't buying a foreign gun priced in Euros a certain type of greed. And what kind of dirty profits does Bill have to spend in Europe, when a Remington 870 costs $209.00 at his local big box sporting goods store. Buy American, or buy wherever, and if it costs too much, don't buy.

In the final analysis, the rise and fall of the Euro versus the USD has nothing to do with greed or profits, but is a simply balancing of the books. The Euro has nothing to do with guns made and sold in the USA. If the Bills of this world crave a foreign made gun, originating from a Euro-dollar country, the exchange rate is not going to affect the gun in the country where made (say, Italy).

An Italian $1,000-Euro-gun will still cost $1,000 Euros in Italy, no matter up-and-downs in the exchange rate. So where's the gouge? Bill can still go to Italy and buy his $1,000 Euro gun for $1,000 Euros. It may cost him more US dollars at the current exchange rate to purchase $1,000 Euros to pay for his $1,000 Euro gun. But where's the gouge? Perhaps in Bill's mind. And in the minds of all the wrong-thinking sympaticos and fellow travelers who subscribe to the notion that profits are bad. Check your IRAs and HR-10s. The bad old profits from years of greedy investing are gone. The bubble has popped. Happy now? Or was it just the other guy's profits you were attacking? EDM

Al: I said that Bill's rant about undefined "greed" and "profits" was pure BS. I said nothing about deregulating "everything." Fact is, I'd like to see some regulating of the kind that protected my generation from the credit card predators and usurious interest rates.

While I don't often read or agree with the New York Times and only read someone else's copy when on the East Coast, while at the Vintage Cup I saw on the front page something I agree with wholeheartedly: "If Fanny Mae and Freddy Mac were so much in the national interest that they had to be nationalized; why weren't they regulated?" I thought they were! I used to audit banks. We reviewed loan portfolios on a statistical basis, investigated a sample in detail, drove by properties, sent confirmation letters to borrowers...what the hell happened!

When I was a 29-year-old CPA, moonlighting my way trough a Top Ten law school in the tax department of a Big 8 accounting firm, making a good manager-level wage, and going out of town on audits, weeks at a time during the summer, I could not get a credit card because I was a "student." That's how tough it was in 1970. Now my Labrador Retriever can get plastic.

I just got my Visa bill with an $885 balance, and was encouraged to pay the minimum $25 (which would include $21.04 at 8.9% APR interest if I didn't pay currently). Thus I would liquidate all of $3.92 of the $885.00 balance. And should I be a day late, then they slap on a $29.00 penalty for not paying $3.92 of principal for one day. And if I was someone strung out on the easy credit and couldn't just pay off the balance...gotcha!

But how's this for regulation: I went to my bank in the town of 550 where I have banked exclusively for 36 years, to get cash for my RV trip to Alaska this summer. I thought $4,00 would be about right to get started, because I don't like to use plastic unless it's necessary. The teller who has known me forever says, "Sorry Ed, but I need to see your driver's license to copy." She explained apologetically that all cash transactions over $3,000 are reported to Homeland Security. It seems that the regulators put the onus on financial institutions to report all "suspicious" transactions. The banks, fearful of "profiling" Arabs, and getting sued under conflicting laws or regulations or judicial decisions, simply agreed among themselves that $3,000 and up was suspicious. This is what I mean by over regulation. Can you imagine how many $3,000 cash transactions there are every day?

But getting back to plastic, Congress did the dog and pony show with credit card honchos a few years ago: Capital One, MBNA, et al said that if they were tamed down (regulated) then they couldn't advance so much ready cash to unworthy borrowers. Whoa! The whole pattern of federal and state regulation had been to lean on lenders to make bad loans since 1975. Remember "red lining"? How about "profiling"? Banks were damned if they did, and damned if they didn't. Making marginal loans got bankers brownie points with the likes of BHO, who sued Citi Bank for withholding credit from unworthy borrowers.

The whole thrust of regulation the past third of a century has been to expand credit...damn the consequences, full speed ahead! This federal policy finally revealed itself for what it was(and is) when the private-lender spigot ran dry and the feds had to dish out $600 to all the people who were tapped out on plastic. A bankrupt government paying a dividend; was it really any worse that the bankrupt AIG honchos went to a spa?

When I bought my first house at age 31, a two family for $26,500, I paid $6,500 down and the mortgage interest was capped by law at 8% (I think I paid 7%). The usury rate was 8% for personal signature loans, and auto loans were regulated severely. People paid off new cars over 3 years, and maybe 2 years, which was the used car pay out. Interest was deductible, so everyone cared about the rate. When you filled in your tax return the interest paid came back to haunt.

Turn on your boob tube tonight and see the terms now: "No money down! $5,000 cash back! Zero percent interest for five years. No payments till 2009!" No wonder the car market is oversold; no wonder that Chrysler, GMC, and Ford are essentially bankrupt; They sold all the 2008 models to people who wanted but didn't need a new car way back in 2004 or 2005. Now no one can afford a new car because they are still being gouged on the last one. Here's how it works:

EDM went in to buy a new riding lawn mower in April priced at $3,500. The dealer wrote it up and said that I didn't have to pay anything till October. I said I wanted to pay cash and be done with it and asked about the cash price. The dealer said the cash price in April was the same as if I paid it off in October, and explained that they lay off all their paper, no recourse, on a finance company that plays the odds: The odds were that by October 99% of the lawn mower buyers would opt to an installment payment plan at a high rate of interest, and interest would be computed back to starting in April. This is a scam, but the American mode of acquisition has become so dependent on time pay that it is considered essential to continued prosperity. Ninety-nine percent of Americans are credit junkies and will mainline "Buy Now, Pay Later" whenever it is an option.

In summary, way back when this 67 year old retiree was young and vulnerable and could have been tempted into a life of debt servitude at high rates of interest and with penalties heaped on, I and my generation were protected from self-destructive tendencies by meaningful regulations such as usury laws and stingy lenders who dolled out prudent loans consistent with a hefty down payment.

Then two things happened: Social engineering and regulating to force lenders into advancing credit where a prudent person would fear to tread, and the allowing of branch banking, whereby one bank could buy up others and get so big that loans became a financial transaction on the holding company level, local loan officers were marginalized, and lines of accountability got blurred; Fill in the form and pass it along; make no value judgments; rely on third parties for a bundle of meaningless paperwork, run up the closing costs, and when the file is 1/2-inch thick, make the loan. Brain-in-gear is not part of the deal, because the loan documents get put in a box, and when the box weighs 25 pounds it gets sold to Fannie Mae, where they never look inside. Yikes!

ED:
I'm confused. Can you point me toward the legislation that forces banks to make sub prime loans ........ "Then two things happened: Social engineering and regulating to force lenders into advancing credit where a prudent person would fear to tread," .... and is it Social Engineering" that invented the "insured credit swap" or the idea that turned crappy loans into bonds with a AAA rating? I don't recall any of those ideas in LBJ's Great Society. ....... and I'm a great fan of LBJ even though he almost got me killed in '65 and '66.

AL

Just a few comments here and I guess I'll get on with my life.

My "rant" was a well thought analysis of how profits what grease the skids of our economy; without being better off in the evening, there's no incentive to go to work in the morning. So I guess we agree that profits are good, or at least that's what you said: "...nothing wrong with profitibality...healthy and necessary driver of an economy."

So why are you so hostile and contentious?

As to showing you an auto executive who is barely making it so you can call him a liar, who mentioned lying auto executives but you? What's the point of being an auto executive if it leads to barely making it? Lying auto executives on a shotgun BBS, really GregSY: This red herring stinks.

But let me clue you in on auto executives, even though I don't know any, but I listen to the news and read newspapers. The Janesville WI GMC plant about 25 miles NE of me is going to close in December, and the Belivdere IL Chrysler plant about 40 miles SE is a 50/50 bet on closure if GMC and Chrysler merge. For sure those soon to be unemployed Janesville people, autoworkers and executive level, are going to be telling their tales of woe at the unemployment office, and it won't be lying.

You have a knack for not saying what you mean and not meaning what you say. Of course you want to take this personal. Otherwise why would you inject something about a "27 year old retired lawyer screwing somebody somewhere." FYI GregSY, not everybody is created equal, as evidenced by your postings on this board, which, as you say, "speak volumes."

Actually, to get the story straight, once and for all (I hope), I decided to move on from law in fall of 1980 when I bought a 43 foot ketch for $100,000; Wife Nancy (then 34) and I (40) and two kids (15 & 7) sailed that boat from Chicago to Europe and the Caribbean in 3 years, selling it in MD in spring 1984, for $135,000. I had added $8,000 of equipment, so my gain was $27,000. We spent about $14,000 per year, all inclusive, for 3 years or $42,000 total, less the gain on the boat, and our 3-year adventure to Europe and beyond cost a net $15,000 or $5,000 per year, or about $420 per month. The rich get richer if you consider living on $420 per month "rich." And for someone who has not practiced law for going on 28 years, I am amused by your fixation...did a lawyer abuse you as a child?

For my part, I never once worried about lying auto executives, greedy profit-mongers, or "condoning behavior that brings on economic woes." I did worry about wind shifts, building seas, getting a good sextant position, and bringing my family to port safely. In other words, living life on $420 per month. What were you doing in 1982? Grousing about that which you still don't understand? I would think so, because you are really good at it.

You are "confused": I guess we agree on something. But, No. I'm not going to bring you up to speed on something that can be Googled. The acronym for the law starts with "C" and it is well-known in the context of the pre-existing prudent-lender procedure of not lending in bad neighborhoods--Google "red lining."

Banks were under the gun of the regulators and trial attorneys to extend credit where they would otherwise not lend money. BHO was part of a lawsuit that resulted in with a settlement by, as I recall, Citi Bank. If you are genuinely interested it's easy to find.

I personally am astounded by what has transpired in the credit markets since I checked out on April 30, 1981 and went sailing. I audited banks as a CPA, and represented the mortgage division of a syndicate of banks as an attorney. None of this sub-prime stuff was even thought of back then. My only banking experience since then is at my local state bank, population 550, where they make loans in the old fashioned way. They do package loans, as is common, and lay them off at Fannie Mae, so they can keep making loans, but regular banks are not at the root of the sub-prime melt down. The "banks" you hear about are "investment banks," not local banks where you walk in and sit with a VP to ask for a loan.

There is a good blurb on the Yahoo home page quoting Greenspan on this very topic. He was amazed at what slipped in the crack during his watch. What I am waiting for are the indictments, starting with the home buyer who inflated his or her or their income, and it's no defense to say that some shylock mortgage broker said it was OK. A person I knew in the late 1970s went to the federal pen for misstating financial statements to secure federally insured farm loans. And if mortgage brokers were part of the perjury, there is conspiracy, and if mortgage packaging investment bankers failed to preform due diligence, then off with their heads, and so forth, right to the top.

Part of the problem is the "pile on" agenda of the drive by media. The sky is falling based on manufactured negative reporting. Witness the couple os poster people for everyone's worst nightmare: Their story as constructed by the New York Times follows:

Twiddle Dee and Twiddle Dum are pictured long faced in front of their California dream home. They say that they paid $225,000 in 2001 and added $75,000 "improvements" with a second mortgage in 2004. Now their best offer will leave only $220,000 to pay down the $300,000 they still owe. Whoa! They paid nothing down, added a 40-foot ham radio tower and swimming pool, and after 7 years have reduced zero principal. Reading the lying news story closer we find that the $220,000 is mortgage pay down, not the offer, which would include 7% brokerage fees, closing costs, lawyer and title fees, and buyer concessions to settle contingencies (like remove the damn eyesore tower).

Actually the true story is that these people bought a house they couldn't afford with no money down (no equity), have lived there for 7 years, and they splurged on a 40-foot tower that the neighbors hate, and the buyer, odds on, has no use for. It is a fact of life that adding a swimming pool adds zero value. Add sales-associated costs to the $220,000 they say is left over for the bank and the buyer's offer is somewhere between $240,000 and $250,000. The problem here is stupid people, doing stupid things with other people's money. The parting shot of the NYT article was Mrs. Twiddle Dee's lament that "I think the bank bears responsibility."

Well, it remains to be seen if anyone is held to task, or whether our next president simply declares this whole thing to be nationalized guilt, like nationalizing the financial sector, send out another economic stimulus check, and we'll let the government fix things. After all, only the government can print $700,000,000 of crisp new money to spread around. No wonder people are buying expensive shotguns. EDM

EDM

As I recall it, Red Lining legislation did not force banks to make special rates ...... It required that banks make loans at the SAME rates and with the same financial criteria no matter the area of the city .....

Al

Last year 68.4% of my gross income ended up being taxes. Next year it will go up. That is excessive profits in my book. Federal taxes, Social Security, Medical care, State taxes, City taxes, property taxes, vehicle taxes, personal taxes, sales taxes, you name it taxes. 68.4% of my gross taxes went back to the government.

It is obscene and about to get worse. My father's farm has been in the family for four generations and unless I come up with a pot full of money, for inheritance taxes, it will be sold at his passing in the next year of two. I am tired of "near do wells" telling me that I owe, anyone else, anything. Let the bastards get a job and work 60 hours a week to get what I have. Let them spend eight extra years in school, borrow tens of thousands of dollars to live on and pay for school. Let them go deeply in debt, never miss a payment and then be told that their money needs to be spread to others to help them achieve the American dream. This is crap of the worst type. We are being made into mushrooms. Kept in the dark, fed horse shit and told that not only is life good but that we should grow and be happy. Bull shit.

I have a solution for this mess. I intend to decrease my gross income by 50% next year. Screw-em. Next year the farm will not sell a grain of corn or a bean. I will store them. I can do that for a year, or two need be. Hell I can just not plant the farm. Being paid off, (the farm), makes it much easier. I will work two days less a week in the practice. Let my income drop 50% and the taxes will drop by two thirds. They can not tax, what I do not make. I use to live on far less than I make now and can go back to those days again. Can government get buy on what they collected 20 years ago? I think not.

Like many others, I am getting tired of the elite telling me what to do and how to live.

Bouvier, a propos of "no matter the area of the city .....", do pay attention to the
profile of the "customers" the sub prime loans have been oriented to:

http://www.youtube.com/watch?v=5OtKt3ezHY0

JC

JC:

The sad fact is that the poor always get screwed first ..... I'm sure the bankers have already cashed the bonus checks ..... And the investment bankers have bought private islands from the money they made selling the bullshit bonds they sold based on the sub prime junk ..... And in the end WE are going to pay for it!So the poor get6 screwed first ...... and we taxpayers get screwed in the end!!


Al

Hear is part of the problem.In 69 when I got out of the service the goverment allowed me 27,000 for a home loan,alot of money for the time. Today a vet can now get 730,000 for a home loan when he gets out,this amount was just approved.Remember vets can get a one dollor down payment to boot. What kind of job must Sgt. Joe Blow get to make a 7,300. monthy house payment.This is goverment backed stupid loans not gready banks.

The poor get screwed first, true enough, but they often get screwed less. I know several 'poor' people who keep under the poverty level on purpose and pay no taxes. They always seem to always have money for cigarettes and beer. It's even better if you're poor and illegal.

My latest wonder is why, after all these years of being told we pay taxes to support our roads and schools, every major new road around here is a toll road and private schools are becoming the norm since public schools are a breeding ground for the sex drugs and rock n' roll set.

Bouvier - It's called CRA, the Community Reinvestment Act. In the mid-90's the president demanded of Congress to expand the already broad powers of this act to qualify people for mortgage loans that had previously been unqualified based on credit history, income, etc. Banks are judged on their performance under CRA by Federal regulators and if their performance is deemed less than satisfactory under government standards, those banks are penalized. (Good performance = more loans in the community to certain protected classes) Fannie and Freddie offered guaranties on this paper because the secondary market would not accept it as is - too risky. Fannie and Freddie's guaranty made this questionable paper investment grade and liquidity to make more loans was ensured. To further complicate matters, the really toxic stuff that Fan and Fred would not touch was made good by friendly ratings agencies for a fee. All the AAA paper you want for a nice fee to Moodys or S&P. This is a gross oversimplification, but you get the idea. The notion that this mess was caused by "greed" alone is insufficient, whose greed? Investment bankers, Fannie and Freddie execs, lenders, real estate agents, ratings agencies? Take your pick, everyone was making money. A few saw it coming, but they were shouted down. In the end it was social engineering and bad public policy on behalf of Congress and a presidential adminstration hell-bent on giving out free lunches that created the perfect financial storm. EDM is spot on, easy credit created a bubble that inflated our economy and created demand for goods and services not based on economic fundamentals, but wants and wishes. My advice for anyone on the fence is to pay down debt and gird your loins, because it's going to be rough for the next 12-18 months. DOW futures are in the way in the can this morning because the hedge funds are making margin calls. As far as prices, commodities are going through the floor which may offer relief on ammo prices in 6 months. I wonder how many orders Galazans, Purdey, et al have had cancelled? I bet more than a couple.

If I vote for Obama you think he'll spread your guns around ?

eeb:

As I read them there is nothing in CRA of 1977 or FIRR&E act of 1989 or FHEF&S of 1992 that requires banks to make loans at lower rates or relax credit worthy-ness for any buyer. The CRA addressed the banks actions of charging higher rates and requiring a higher standard of credit- worthy-ness for persons living in low and middle class neighborhoods. I bought our first house in NYC in a red lined area and all the bank required a 20%+ down payment and a substantial bank account. In Westchester County, where I worked at the time,a typical down payment was 10%. Ultimately I qualified for a GI loan which required the bank to maintain a 5% maximum. Seven years later , after the act, I was able to buy several homes in the formally red lined area with the more traditional 10% down payment. And ..... for the record I fall into none of the "protected" categories.

Al

If the dollar continues to strengthen against the Euro, as it has recently, then perhaps European guns sold here may become less expensive.

A 20% reduction in the cost of a SxS from Arrieta or AyA would be most welcome.

JERRY

Al - You are quite correct, CRA does not require banks to make bad loans. Problems arose with the various mortgage products that allowed people to qualify under the narrowest of margins. You stated that you had to make a downpayment. Some of these mortgage products did not even require proof of employment or income, much less a downpayment. Many started as low fixed rate loans that reset after a time to higher variable rate. The people that took these loans were the most vulnerable to changes in the market, but because these borrowers were in traditionally underserved minority groups lenders were able to boost their own CRA ratings. As I said earlier, not all these loans were backed by Fannie and Freddie, but politicians shortsightedly applauded any lending program that furthered home ownership and that's why these marginal lending programs thrived. The incidence of fraud involved is massive and relatively little has been said about that. Very sad.

eeb
The world, made giddy by new found prosperity clambered for dollar denominated investment products ....... they wanted a piece of the rock, the super robust American real estate market. When the investment bankers ran out of quality real estate products they invented them. Sub prime loans were invented to give credibility to bogus investment grade paper to be sold world wide ..... and the Credit Swaps was invented to give the insurance industry a taste ....... and all they needed to get it rolling was a signature on a loan application from some poor SOB who wanted a nibble of the American Dream Cheese ....... They got their little bite .... it didn't last long ........ And the Rats got fat on the rest. And now it's our turn to buy some more cheese for the rats from our tax money. To make it look good I'm sure the rind will be served to the starving mice to make things look good.

Al

One thing for sure, the reformed global financial system will look like Canada's, which doesn't believe an "invisible hand" guides free markets beneficiently. Greenspan confessed he thought it would. The US recession is forecast to cause a quarter of "negative growth" here from the downdraft of our biggest trading partner. Thousands of jobs are being lost. The financial system, however, is strong---best of the G8. Prudent regulations kept things from going to hell. Something as simple as accountability and banks required to have money in their vaults.

If only banks had to have money in the vaults and money had to have some gold backing, things would be grounded. It is really simple. But with that old fashion mentality, you don't get to go on $440,000 junkets whilst your company just hit the crapper. I own a business and nobody is going to be there to bail me out if I don't make it. If someone in my company went on a $40,000 let alone a $440,000 junket they would face the company firing squad. Who OK's this???............ Um, we were a thinking, um, ya know, well, would it be too much to ask if we went on a junket? I know the business didn't do good, but we did try hard to screw everyone we could!...... Well what do you think it will cost?? .......Oh not much, maybe $440,000 but you won't have to get me a christmas gift.... Well as long as I don't have to get you a christmas gift, OK, but NOT ONE DIME MORE.

Al: I have been getting it off my chest on maybe the wrong Internet site. But I've also been researching some stocks using Yahoo Finance, and I find a surprising number of financial junkies are on my wavelength when it comes to what has happened of late to the stock market equity and credit liquidity. As I have said often above, I am amazed how this plays out. I feel like Rip Van Winkle coming awake in a whole new world that I can't believe exists. I know what it is like to buy with 100% leverage (or more) and with full recourse, but this happy situation usually accrues to those who don't need to borrow in the first place. Prudent lenders do not loan out their capital or depositors money as what are now called NINJA loans (No Income, No Job or Assets).

My off-double-gun-topic research has turned up something that should answer your question about the pressure on lenders to make bad loans:

http://finance.yahoo.com/expert/article/yourlife/115773#

Actually, the germ of the idea that Mr. Stein speaks of got started as early as the Community Reinvestment Act of 1977, when I was still doing mortgage lending work. But my end of it was new construction on large scale, not single family, so I just heard the rumors. It has been in the news of late that some of BHO's community activism was directed at litigation with Chicago banks to force lending in south side war zones to promote racial parity of color-coded debt, rather than sound loan portfolios.

But the current debacle traces largely to independent mortgage companies not regulated by CRA of 1977; it was expansion of the concept of adjusting social inequities by lending out money starting on Bill Clinton's watch that Stein speaks of.

What the social engineering did was remove from the lenders the hands-on exercise of good judgment that had prevailed from the beginning of time in banking circles: protect deposits and shareholder's equity. Once the Geni was out of the bottle, every rejected loan applicant had a civil rights lawsuit, some filed by BHO's group in Chicago. But, still, it was not the neighborhood banks that did the deed. Fannie and Freddie had to buy the bank's paper, but these bank-originated loans alone are not so infested with sub-standard loans to require a bailout. The banks may have been over-regulated into making a proportion of bad loans to avoid statistical scrutiny by regulators as to the shade of "color" of their loan portfolios, but this isn't the present problem as I see it.

The culpable banks were investment banks, not your local walk ins. In this context, I recall some problems my now-deceased aunt had as she started to get senile: she had a Merrill Lynch account, and would keep going into the local office to cash checks for spending money. She could not get it though her head that Merrill Lynch was not a bank, even though they gave her convenience checks as part of her Cash Management Account. Now Merrill Lynch has tanked, probably because they were not regulated like a bank. Anyway, read Stein's analysis and tell us what you think... EDM

EDM and others seem to have overlooked or to be unaware of the impact of loan servicing agreements on failed primary lenders. Companies like Countrywide and Indy Mac (Indy Mac spun off from Countrywide as a REIT and subprime lender, then got into consumer banking) made money on the front end through loan origination fees (points) and associated add-ons to the buyers (i.e., the borrowers), then shifted the loan risk to the secondary market by bundling the loans for securitization. These bundled loan sales invariably contained language that guaranteed a revenue stream to the originator of the loans (i.e., Countrywide and Indy Mac) through a loan servicing contract. As long as the loans were outstanding, the servicing companies took a piece of the cash flow. It became a low risk, fee-for-service business, until all the loans started to default. As EDM says, "investigation continues..." but now the FBI is involved in that investigation. It will be interesting to see how all this plays out on the criminal angle.

"The owners of this country know the truth; it's called the American Dream because you have to be asleep to believe it."

--George Carlin

"Why is it when I'm getting ready to count out, the owner always uses his toe to ID those double-stickered empties in the stack on the curb?"

--A. "Big Tiny" Schnook

jack

It's not unusual for someone who hasn't studied a situation to be confused. (1) By now there are ample poster inputs citing the legislation that gave activist groups the legal leverage to litigate every loan denial as a civil rights violation. And I suggest you double-click Mr. Stein's summary of what has transpired. It's complicated, but I believe correct.

(2) Just this evening they had a simplified version of the "insurance swaps' facts on 60 Minutes. It seems that the "meltdown" was precipitated by bad bets made in a newly invented insurance-type market that replicated the "bucket shops" of a century ago. These were betting parlors where persons could bet on the market ups and downs without taking a long or short position. Sixty Minutes explained it in the context of a ball game where the players, management, and owners have a stake in the game (with real $$$ to win or lose), while the fans could bet among themselves with no stake in the game. This kind of no-vested-interest "insurance" betting was outlawed in 1907, after a market crash. You cannot buy insurance on your neighbor's house and collect if it burns down, but thanks to Bill Clinton you could buy "insurance" betting that a home would go into foreclosure!

In the last days of Bill Clinton's presidency the congress abolished the Anti-Bucket-Shop law (the senate by a unanimous vote), and the repeal law went even further to prohibit the states from jumping into the lurch by enacting protective legislation.

(3) The die was cast during LBJ's Great Society for a great many of today's ills, including Bill Clinton, who keeps coming up like a bad case of heartburn. When Bush Jr. took over in January of 2001, he inherited quite few of Clinton's "poison pills," including the head of the CIA, who said, "Slam dunk!" on WMD's, as a prelude to war, and the recent repeal of "Anti-Bucket-Shop" legislation, which turned loose the investment bankers to bet on mortgage foreclosures where they didn't have an insurable interest.

While one would ordinarily associate reduced regulation with the republicans, I'd say that the current fiscal debacle can be can be laid at the democrats' doorstep. You should never forget that Bill Clinton signed the law that made it all possible...then likely...and now an accomplished fact. But don't hold your breath for the drive-by BHO-fan-club media to jump on this one...they, like you, are "great fans" of LBJ's Great Society, and all that has logically followed the liberal template. EDM

"While one would ordinarily associate reduced regulation with the republicans, I'd say that the current fiscal debacle can be can be laid at the democrats' doorstep"


http://oldbluewebdesigns.com/USSA.htm

and a well written article;

"Contrary to the Obama narrative, however, it is not free-market capitalism at the root of the current mortgage industry crisis, but rather the very socialism Obama hawks. The historical record makes this fact unmistakably clear."



http://www.americanthinker.com/2008/10/what_really_happened_in_the_mo.html

(1) EDM is not unaware of anything relevant except where we go on from here. The stock market is adjusting for an "over-bought" situation; most consumer products, especially housing, have been "over-bought" of late due to the easy financing of consumer lust to satisfy excessive "wants" rather than basic "needs."

(2) Back in a more commercially prudent time frame, when I was in the construction mortgage business (as the attorney who prepared the documents, but well aware of consumer finance), brokering mortgages was simply an outsourcing of manpower and a division of labor and had nothing to do with sub-prime lending.

(3) Points and loan service fees are endemic to the separation of available money sources from the matchmakers of the mortgage loan deal. When I bought my first real estate (a $26,500 two family in 1972) the closing costs were $7.00 to record the deed and mortgage; title insurance was paid by the seller. The loan was made in-house at the bank at a given rate of interest for a stated term which determined the monthly payment.

If my bank packaged my loan and sold it, I would never have known because the loan service agreement would have (A) provided that the bank kept part of the interest earned, and (B) the bank would have been compensated by a loan service fee to process payments and keep up with the paperwork. Meanwhile, the buyer of the packaged loan(s) had a pure investment security at a given bargained-for rate of return, minus a fee for handling.

(4) The financial world was at peace...and there was no shifting the risk because loans were essentially packaged and sold with "recourse," the composition of the loan package being such that one bad apple did not spoil the bushel. Given the low level of risk, I believe there as insurance, for which a cost was assessed, somewhat like banks being charged a premium for FDIC insurance on savings accounts. When mortgage loans were originated by banks the responsibility bad loans was "in house," and the culpable loan originator was an employee.

Separate the loan originator from the money and one would think the money lenders would be more careful. The idea of a "credit swap" between players at risk made sense; sort of like an bunch of apple sellers spreading the risk over a massive number of bushels so that one out-of-the-ordinary bad bushel did not severely impact any one seller.

(5) Then non-banks (Countrywide, et al) started grabbing a share of the action, which on the surface seemed to benefit consumers in the context of the American fixation with deregulated "competition." At first the mortgage brokers broadened the possibilities for home buyers who disdained doing business with the stuffy old banks and loan officers who asked tough questions. Getting a mortgage was like going to McDonalds, fast food, fast money, no questions about trans-fats or points or loan origination fees or closing costs or true rate of interest; satisfy the "want" appetite--instant gratification, no consideration of consequences.

(6) As to "...how this plays out from the criminal angle," check out "Willy & Ethel" in the comics today:

Willy says,"I told a bookie that old ten-dollar watch of mine is worth a hundred dollars and to bet it all on a horse."

Ethel says, "What if the horse loses? Won't he find out the watch is only worth ten dollars and want the other ninety?"

Willy's retort, as he opens a can of beer: "He's not worried...if I don't pay him the government will...it's complicated, but that's the way things work now..."

From the criminal angle, bookie bets are not legally enforceable, but the derivatives, called "credit default swaps," which became legal after congress and then president Bill Clinton repealed the "Anti-Bucket-Shop-law of 1907," are now legally binding bets that congress and the president are honoring by throwing massive amounts of money into the "Bucket Shops," whose side bets far exceeded the actual mortgages outstanding. In other words, bad loan insurance failed for two reasons: (1) The premiums and/or reserves for bad debts were insufficient; and (2) the insurance was being sold to persons without an insurable interest, mere bystanders who placed massive numbers of bets with Willy's bookie that loans would fail.

This bail-out is like if a state legalized and licensed casinos, which then became so large in relation to the state itself that the failure of the gambling establishments would severely impact the state's economy. What to do? Guaranteed the casinos' betting losses? A bankrupt casino can't pay the gamblers who made irrational bets, and by doing so, through pure luck of the draw, "broke the bank." You gotta read Ben Stein to truly understand the source and magnitude of the problem. His article "Why I'm Still Buying" is required reading at:

http://finance.yahoo.con/expert/article/yourlife/115733#

As a former bank auditor and a former mortgage company attorney, I am just now starting to fully comprehend the details of the problem. Somewhere there is one simple answer to where this all went wrong. If financial institutions had not been nit-picked by regulations forcing loans of a quality that would otherwise have been avoided...if non-bank mortgage brokers (not subject to banking regulations) had not gained a foothold...if packaged loans were sold with recourse...if credit default swaps ("insurance") had not got out of hand by repeal of the "bucket Shop Law"...and if the bets on defaults had not taken on a life of their own, independent of insurable interest...

Well, then there wouldn't be today's opportunity to buy the Dow, formerly above 14,000, and now at below 8,500. My posts on this thread have given me an opportunity to gather my thoughts in a sometimes hostile environment. There is a wealth of information on the Internet if one can only separate the wheat from the chaff. I believe we may be at a point where opportunity knocks. By low, sell high, and if it don't go up...don't buy. EDM

Ed, re your response #5 above, my point is that many lenders (especially CW and IM) did not give a rip about the quality of the loan once they had made it. They got their fees on the front end, sold the loan, then continued to gather in loan sevrvicing fees for the life of the loan, with no real risk after they sold the loan. They were incented to make as many loans as possible because the servicing fees became their annuity income. In a big operation, the revenue from servicing fees can exceed the revenue from the lending side.

Soooooo, are the gun prices going to come down? My guess is new guns won't be affected much, but used guns will take a hit or not sell.

The news story tellers are reporting increased gun sales (new I presume).

Some interesting comment in this thread.
Current economic woes must have an impact on gun prices because sensible people will be looking at ways to increase their pension funds and cash for retirement. No point in buying a nice gun if you cannot afford to shoot it.

My forecast - In the “new gun” market orders for high-end guns will fade, as the usual buyers – investment bankers and their like – will not have bonuses to spend. New middle-tier guns will sell more slowly, as buyers will find it difficult to justify that level of expenditure. New lower tier guns will sell, because people like to shoot and will buy basic guns.

The used gun market also will take a hit; top end guns will sit there unless the prices fall substantially and vendors take a drop, particularly those who are forced to sell. Middle tier values will do the same, but will be less affected as owners will hold them rather than trade up, also because more people can afford a middle than top tier gun. Bottom tier guns will trade more briskly as reduced disposable income will increase demand at the lower end.

In the UK driven shoots will also suffer as corporate days disappear - Stg£30 -40 a bird on corporate entertainment would be hard to justify to shareholders when dividends are not being paid.

K.

I think that says it all right there.

Absolutely, Dave. I'm still waiting to see someone around here charge $700.00 for a tow charge. But, before people run down the gun companies for their profits, they need to remember that factories pay electric bills, oil bills, unions, etc. There have always been top brass pocketing big bucks- that's the American way. I just retired from a steel mill a few years ago. You don't have to tell me about the people who lay around and won't work for their money. And as far as home loans are concerned, people should have had enough sense not to get in too deep. The rule of thumb back in the seventies was- the bank wouldn't give you a loan (in this area) if the monthly payment was larger than ONE WEEK'S income. That means that if you and your wife work, your house payment shouldn't be larger than what you both bring home in ONE WEEK. If only the man works, the monthly payment shouldn't be larger than one of his paychecks. You mention that to a real estate agent now days and they never heard of such a thing. That's why people go under.

Jimmy W. I am a realtor, that is one of the ways we qualify a buyer. Actually banks use 28% of your monthly gross and as much as 33% if everything is correct with your credit scores. But, buyers have become much different than back in the '70's. They now tell us what they are going to do. Because of the internet and lending institutions, that use telemarketing, they have many times taken our job of helping them get a loan, out of the loop. New loans though, have not "really" been the problem. It is the refinance loans that have done the damage. Because we were seeing a trend of 3-5% yearly increase in house values, the refi. companies have been over appraising. Example: You live in a house that has an actual resale value of $100K, they would send out an appraiser that would give it a $130K value, so they could loan you more money. After all, they are going to be making money on the interest they charge and in a few years, the value "will" be there. Is it right? NO, but that is what was done. I have had many customers burned by this and of course they come to me to get them out of the pickle they got themselves into. The customer didn't ask the realtor for this advice, they did this on their own. Everyone knows, I can't sell your $100K home, for $130K. Besides, the ultimate appraiser, is the buyer. A fair market appraisal is based on what the market has shown in the past 6mos. Any earlier than that and you will see different values. Now in this unstable market, even 6 mos. is too long of a time to base appraisals on.

That's not really what I was getting at, but certainly related. I just think that the original statement is exactly what leads to overseas production, lower quality standards, etc. It's natural and it's a logical choice.
"Prices" will never drop unless it's a temporary liquidatin situation, but the product that's the "same" will be moved to a different production point, different materials, different lean manufacturing techniques, etc will be put in place and the result is that an 870 today isn't the same as an 870 from 25 years ago...neither are your sneakers. Companies in many markets, not just guns, etc, have been seeing increased manufacturing costs, increased raw materials costs, increased overhead, etc for a long time, and frankly I have not seen prices in general increase much at all over the past few years...my suspicion is that most companies DESPERATELY need to hold or even increase their prices in order to survive because they've been dealing with a market that does not value (or has forgotten or never knew it?) quality as much as it once did, and HAS choices at lower prices, so they have been struggling to keep their prices as low as possible in order to meet the market demand.
So, the answer is, I do not expect to see prices drop at all on guns currently on the market. I might expect to see new or subtlely modified guns that cut some (further) corners or new/old guns manufactured in new and cheaper areas, etc that address a demand for lower price-points.

I was talking about what GregSy said, David. And Dave, I know what you mean. I worked in a steel mill for thirty years and made pretty good money. But I saw kids get a job there and start buying things that put got them into trouble. Realtors (mainly, a couple of women I dated over the years) around here never heard of such a thing of not getting a loan that would put a huge burden on young kids. I remember in the spring of 2006, we were in the process of getting locked out by our company (AK Steel) and one guy I worked with went out, within a year of the lockout, and bought a new car for his wife, a new pickup truck for himself, a new boat (a month before the lockout) after he had just bought a new home. All this on less than a $50,000/year job. Credit cards really get people into trouble, too.

You know, they are all screaming at the housing industry, but all loans are the cause of the problem. They will grill and drill you to get a house loan, but get a loan for a car or truck, all you have to do is be warm. Why, just an opinion. You can reposes the vehicle, then take it to a car auction where it can be sold. The house is where it is. If it is in a bad market or a bad location, that house is going to take a big hit on value. You can't buy a car or truck before buying the house without screwing up your loan application. But buy a house, no problem, they will get you a loan for that vehicle.

Someone should take those two "schmucks with earlaps already" outside for a good old "Bosephus- Attitude Adjustment-and get their sorry Bernie Baruch asses in tune with the program. Their BS ads are all over Gun Digest like a cheap suit on a laid-off pimp-what a travesty- like the numbnutz in PA who advertises "because I am a dealer, I can pay more"-how many really "with the program" gun buyers, collectors, shooters do these peckerwoods think they will rope in-? Dicky and Graigsey had listed a Win M54 .270 SuperGrade mfg. 1933-Just for the Hell of it, I called, asked for the serial number, with my Schwing pocket Winnie guidebook open to the M54 section- Old pencildick, or was it pencilgraig- read off the number-book showed 1931-BUT Winchester did not bring out the Supergrade for the M54 until late 1935 (Roger Rule's book) and then carried it over with the far better M70-Went to a MI gunshow a few years ago, pal wanted a SuperGrade M70 even more than Monica Lewinski wanted a Lavoris dispenser and some Dixie Cups in the Oval Office "Rest-Room"- we found a nice 1954 .270- Supergrade stock, solid red pad with the two "titty plugs" SuperGrade QD's, black tip-20 LPI checkering, but that varied as did the comb styles from 1935 until Winchester dropped the SuperGrade in 1960. I had my Rule book on the M70 (worth every penny too) and the script and dashes on the floorplate looked more like a 1940's SuperGrade style-and floorplates were interchangable-also no "engine turned bolt" as the later SuperGrades usually had- so we asked the dealer to remove the three through bolts so we could look at the barrel underside- caliber, date stamp, inspectors marks and on ALL original SuperGrades- in larger case SUPER-he declined, and we saved our $- Caveat Emperor- and as for Dick and Craig and their crooked ilk- "You and the horses you rode into town on---"!!

I've been out of the loop for a few days, at Mayo Clinic, yada, yada...but now I'm up to speed, let me share with you the substance of a call I received just as I left:

An old friend is the senior partner of a business-type law firm and is on the board of several local banks. According to, let's call him Wes, the beginning of the sub-prime fiasco was in the late 1970s (1977-Jimmy Carter--Community Reinvestment Act) when banks were no longer free to protect their depositors and shareholders as they deemed fit, but became a tool of government to "Level the economic playing-field" downward. This was not the "poison pill" that it is now accused of being; just the first degradation of prudent lending practices, pretty much painted over with mortgage insurance.

FDIC protected the banks' depositors to a point, and the less-desirable loans had MGIC insurance to bring them up to speed vis-a-vis Fannie Mae and the secondary market. Remember the constant reminders on the financial news programs telling sub-standard borrowers to keep checking their pay-down on their mortgage so they can ask to cancel their monthly mortgage insurance premium?

According to Wes, Fannie Mae and Freddie Mac required 20% down and the mortgage loans had to fit a certain financial and physical template (appraisal, earnings, total debt, proper zoning, available city sewer and water and other utilities). The mortgage insurance painted over some shortfalls of down-stroke, and if the secondary market rejected the loan, the bank often kept it for their own portfolio...and here is where my banker friend hits the crux...

Wes says that whenever his bank kept a loan that was declined by Fannie May or Freddie Mac, invariably a large percentage of these sub-standards became problem loans. This doesn't mean "worthless" or written off or foreclosed, but simply loans a banker wished that he had never made. IN OTHER WORDS, Fannie Mae's and Freddie Mac's criteria was valid, but during 1990s, under Bill Clinton, this changed for the worse.

Bill Clinton pressured F-Mae and F-Mac to handle increasingly riskier mortgage loans. In 1996 the Dept. of Housing and Urban Development ORDERED F-Mae & F-Mac to ensure that 42% of loans they handled went to below-median-income borrowers and another 12% had to be "special affordable" mortgages for people with less than 60% of median income. Our government required that the government-sponsored lenders (F-Mae & F-Mac) bundle loan packages that, by definition, were 54% below average! And these federally-guaranteed loan packages were sold to private investors, insurance companies, and pension funds. Now that they have gone stinko, guess who's holding the bag?

In 1995 a reform bill authored by a Nebraska republican was kept off the floor of the senate by democrats, and died. Meanwhile, the Clinton administration pressed the banks to make ever-increasingly sub-prime loans...no wonder that the mortgage brokers "...didn't give a rip about the quality of the loans..." It was government policy to loan to 54% of the population that was below the median qualification, and some (12%) were 40% below average qualifications. This defines "SUB-PRIME," and it was government policy.

Then the floodgates were opened by Bill Clinton in the last days of his administration in 2000, when he failed to veto the repeal of the Anti-Bucket Shop Law of 1907. And why should he have bothered? The repeal bill passed the house by a veto-proof majority, and was unanimous in the senate! As Pogo often said: "We have found the enemy and he is us." The "bucket shops" re-opened as Credit Default Swap security sellers who bet the sub-prime mortgages were going to default.

None of this has anything to do with originating loans for fees or servicing loans for fees; the issue is the quality of the loans, not how they originated, or where payments are made or who keeps the books. The problem is that our government took a viable mortgage industry that since 1938, with the inception of the government sponsored F-Mae, which purchased loans made to worthy individuals, and reversed the qualifications, favoring below average "sub-prime" borrowers. I don't understand your fixation with brokers earning fees or servicing organizations being compensated for handling monthly payments.

The problem was that F-Mae and F-Mac could not decline bad loans. These loans were packaged with good ones, sort of like a few over-ripe rotting apples in a bushel. The real problem is that no one knows how many rotten apples are in each bushel, and when in doubt, do nothing. Thus the loan-package securities are no longer being bought and sold; meaning "no liquidity." Why risk rotten apples after the orchard has become famous for having exercised no restraint when incorporating the bad with the good. Who has time or incentive to sort through every bushel to reinspect for what should have been selected out at harvest? And, besides, with the passage of time, all the apples are starting to go beyond their prime, or so says the drive-by media. EDM

Exceeding strange that Republican majorities in the U. S. Congress had neither time nor vision to undo all this Carter/Clinton "liberal social engineering". Ok, back to Ponzi schemes and "apres moi, le deluge".

jack

You got it right. FDR came up with Fannie Mae in 1938, and in retrospect it was a good thing at its inception. One of the problems contributing to the Great Depression was lack of liquidity. There were no 30-year mortgages; banks paired their loans to their deposits. No one was signing up to deposit $$$ for 30 years. Thus when the stock market crashed and the run on banks to cover margins depleted ready cash, banks were in no position to roll over all those one to five year mortgage loans.

You need to understand this: Pre-Fannie Mae, mortgage loans were short term and not expected to be paid in full on an amortization schedule, but were partially paid down and rolled over.

Fannie Mae changed this by packaging mortgage loans with long maturities and selling the packages as a "security" to the secondary markets. Then in 1968, as a budget trick, LBJ privatized Fannie Mae and kept governmental oversight in exchange for governmental guarantees. Fannie May and Freddie Mac were regulated and audited to minimize government exposure on the guarantee, just like banks are regulated and audited by the Fed to minimize exposure under Federal Deposit Insurance. None of this was a democratic or republican issue, just good credit managing, and the system worked till the mid-1970s, again under democratic initiative. But the worm had turned...

I don't think anyone at this late date is critical of FDR's creation of Fannie Mae or LBJ's privatizing in 1968. And here I find the need to correct a prior post: I quoted the New York Times for the proposition stated in an editorial masked as an article that "...if Fannie Mae and Freddie Mac were so important that they have to be nationalized, why weren't they regulated?" I bought this as true, but upon much looking into the subject, I find that I was wrong. The problem was not "deregulation," but these "Government Supported Entities" (GSE's) were regulated into insolvency...

First in the mid-1970s when Jimmy Carter forced through the Community Reinvestment Act of 1977, that degraded loan portfolios as a sop to inner cities where bad risk areas were red lined. This was mostly painted over with government insurance...

Until the mid-1990s under Bill Clinton's watch, when the GSE's were encouraged and then required to purchase a portfolio majority of sub-standard loans. Duh! Wasn't the result predictable?

In none of the preceding instances (1938, 1968, 1977, or 1995) were the republicans in control of the legislative branch, and in each instance a democrat was in the White House. Nevertheless, the problem did not rear its ugly head along party lines. Both sides were complicit, or asleep at the switch, as evidenced by the repeal of the Anti-Bucket-Shop law of 1907, in 2000, under Bill Clinton's watch, but with a republican majority in both houses of congress.

The real question is: Do we want these incompetent social engineers of either or both parties running our banks, brokerage firms, mortgage lenders, and automakers?

And as for the idea that republican majorities could unwind the democrats' social engineering, keep in mind that no judicial appointments have been processed of late because the democrats refuse to call any for a vote; keep in mind that thru an unprecedented trick of the rules the prospective judges have been kept in limbo by the dems not adjourning, but sending staff to keep the lights on 24/7 so there cannot be recess appointments. And the dems' filibusters hamstrung the congress repeatedly during the republican majority. But in the final analysis, I've had my fill of both political parties...and

Further EDM Sayeth Naught.

With reference to what can be laid at the feet of Democratic presidents and specifically Bubba, in January '95, Republicans took control of both houses after the '94 midterm gains of 58 seats House and 7 seats Senate. Sometimes called the Republican Revolution, or as my wife would put it: Gingrich's "Contract ON [sic] America". So whatever economic and social trial balloons were being launched, they owe their "success" not simply to bipartisan "complicity" but to the express will of the party holding a majority of legislative seats.

jack

Jack: As I said above, you got it right. The republicans were not effective to check Bill Clinton's agenda. In theory a majority can pass legislation, but in practice a minority can filibuster things to a stand-still. There was a republican effort to regulate the Government Sponsored Entities (F-Mae & F-Mac) in 1995, by republican senator Chuck Hagel of Nebraska, but a democratic party-line vote kept the bill from reaching the senate floor for a vote. Meanwhile, the relaxing of credit criteria by Bill Clinton needed no legislative approval, but was strictly administrative rule making. The only overt complicity was within the Clinton administration.

Keep in mind that it takes a super-majority to squelch a minority party-line voting block backed up by the threat of a filibuster. The republicans may or may not have supported Hagel's bill 100%, but we'll never know. However, all Clinton had to do if it passed both houses was to veto it as being contrary to his administrative policy, and the republican majority was short of the super-majority necessary to over-ride the veto. Checkmate!

It remains to be seen if a republican minority in the next congress will be equally effective to reign in BHO's agenda.