Dow down 230 points at the moment. Go figure.
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It hasn’t passed the house yet. I don’t like this bailout plan – but I see little alternative. If capital is not available then people can’t buy houses and cars and other big ticket items and the economy grinds to a halt.
On the other hand, did they fix the problems in the banking and the loan industry that got us into this mess? I don’t want to reward a bunch of greedy mortgage companies and financial institutions for gambling on bad debt.
One thing they could do would be to repeal the Community Re-investment Act. That’s one of the ways these toxic loans got on the books.
Here’s a good article on the subject.
http://www.realclearmarkets.co.....nding.html
What about the argument that we should let this play out naturally so that housing prices return to more affordable level? All of this started when the housing bubble burst. From what I’ve read, prices still have a ways to drop. I’m worried a bailout will stop that drop and keep them artificially high, which sets us up for the next bubble.
I’m not a big fan of this bill either. It doesn’t go to the heart of the problem, the “exploding mortgages” caused by APRs, balloon payments, and the depreciation in housing prices which puts many homes “under water” (mortgage total exceeds house value), thus making re-financing impossible.
I’d be in favor of scrapping the whole thing and going back to square one, with Congress comin up with it’s own plan which addresses those issues. But the Republicans in the Senate would filibuster it, and Bush has already said he would veto any plan other than the current Treasury Dept. plan, so that just leaves us with the choice between this plan and nothing else until January. Talk about a Bobbesean choice!
In the meantime, as of 8:30 this morning PDT the DJIA is still in negative territory – not just for the session, but for the entire Bush presidency! Investors would have been far better off parking their money in a money-market fund for the entire eight years of the Bush administration than investing in a broad-based large-cap industrial fund.
Rog Rabbit–
Now stop pretending to be me.
I cannot handle all the flattery.
PS
My broker bought NOV for me @ $40.50 Rog.
We’ll see what happens.
We are also looking at Apple if it dips below $100.
Unlike you Rog, I refuse to fall in love with a stock & ride it down, down, down. You should have sold @ $92 like I told you to. At least you took my advice & took 1/3 of your investment out of NOV when it was in the low 80’s. Oh well, live learn. You should have also never invested a dog like BOOM…and then held it as it crashed. It was down to $20.50 today.
But I am concerned about your obsession with me Rog. I would never pretend to be you. Perhaps you have a deep desire to be me??
As my granddaughter would say, “That really creeps me out!”
Roger Rabbit & Mr. Cynical,
I notice you guys are always trying to show who the smarter investor is. Are you actually making any progress? After all, it doesn’t pay to double your money on one stock only to lose big on six others.
I suggest you guys work with Excel’s XIRR function. It tracks cash flows (in and out of the portfolio) and the dates of those cash flows. It returns the average percentage growth (or loss) from the start date until the end. Excel’s Help menu is easy to understand, and it would give you both a perspective about overall portfolio management rather than a simple stock trade or two.
After all, if you’re not increasing your wealth with this business, you don’t have an investment program: you just you have an interesting hobby.
@4
So why should the home owner who is barely making payments now on his house and watching his ARM rates going up want to hold onto a house that looses half its value?
So what does a bank do with more and more of these houses with buyers who have just walked away, leaving the bank with lots of bad loans and houses they can only sell for half price?
So what does your company do when it goes to the bank to borrow some money and can’t because the bank is stretched thin and is forced to lay off employees?
So what do those laid off employees do when they run short of money and can no longer pay their mortgages?
I’m not saying that a downward economic spiral is real likely, but it does scare the hell out of me.
Now that I’m rich I’m looking to buy my own goat. Anybody got one for sale? Used is ok but I would prefer still alive.
Troll @ 4: That might work regarding Wall Street numbers. After all, as Bill Gates Jr. once said, it’s just paper numbers until you actually sell, so it doesn’t really mean anything.
But housing is fundamentally different. A sharp depreciation in housing prices, sustained over more than a year or two, has all sorts of additional bad consequences.
First of all, you would be saying goodbye to the housing industry for a while. It’s not a small part of the nation’s economy, between construction, real estate agents, title insurance firms, and the mortgage banking industry in general. Sure, there might be some buyers out there picking up bargains, but the new home construction would come to a standstill, and you need to have people selling in order to have sales of existing homes. That’s what we have traditionally feared when we look at “housing starts” and “new home construction” figures from the commerce dept. as a measure of economic performance.
As for deflation generally, we’ve gone through deflation on a small scale before here in the N.W., especially in the early 1980’s and again in the early 1990’s.
The problem with deflation is that it suddenly makes it impossible for many people to sell their homes or refinance their mortgages. Their homes are “underwater”, unable to be refinanced or sold at any price. If the APR suddenly rises to unpayable levels, or if a balloon payment comes due, or if the owner has to move because of of a job loss or change, divorce, medical reasons, whatever – their only option is to abandon the property to foreclosure. The number of properties which fall into that situation expands geometrically as deflation increases.
Once foreclosures hit a critical mass, then a spiralling affect sets in. How can a person sell a house if there are six others on his street that are already vacant due to foreclosure? The foreclosed properties drag down the value of the non-foreclosed properties, until properties which were “safe” before fall into foreclosures themselves.
So why is this downturn different – and worse – than the ones experienced in the early 1980’s and the early 1990’s? One part of the answer is that a lot of new buyers were pushed into the sub-prime mortgage market even though they qualified by traditional mortgages by real estate agents and mortgage brokers who received large “finder’s fees” for the referrals. These mortgages were especially risky to the buyers because the DEPENDED upon continued appreciation in the housing market so the buyer could re-finance before the interest rate re-set of the balloon payment was due.
Secondly, existing homeowners were lured into similar loans by the cheap APR rates on re-financing, which along with the “remodel” boom encouraged homeowners to surrender the equity in their homes to Home Depot or Lowes.
Finally, the depreciation is hitting levels in some areas not seen since the Great Depression. Here it’s looking like it’s 15% or so of it’s high two years ago, meaning that if you bought a home with even 10% down you are well under-water, and you had better pray you can ride out the downturn without having to sell. In some areas, the depreciation is as much as 50%, erasing the better part of a decade of depreciation.
(Checking on Zillow, I found that my childhood home in the South, pegged for tax purposes two years ago at $148,000 in value, just sold last March for $93,000).
In short, there are a LOT more homeowners affected this time, and the consequences are already reverberating through the entire economy.
Now, if you want to seperate the amount of the mortgage in excess of the house value, I’m all for that – there are several options available to do that. That way housing values can find their own floor without restricting the ability to sell (or purchase) the property. I think something along those lines is the real answer to the current situation.
CRA Loans the problem?…FALSE
http://www.alternet.org/workpl.....l_crisis_/
@10
Do you think that if mortgage-backed securities were outlawed (if that’s even possible), that that would help the situation?
Politically Incorrect”
My broker’s system allows for what you suggested.
I got out of the market last year when it hit DOW 14,000. I actually put much of my sales proceeds into a series of Promo CD’s which only allowed $100,000 max in each @ 5.25% and in Tax Exempt Muni Funds.
I kept the rest in other money market funds…the dry powder for short-term buying/selling opportunities.
It has been a hobby…highly successful.
I have regularly posted my trades.
I could care less if the LEFTISTS believe me or not..
I currently own 2,000 shares of Wells Fargo, in which I have made a series of trades all while Rog Rabbit ridiculed me.
Today, I bought 2,000 share of NOV @ $40.50.
I did a short term trade recently that netted $8,000 profit in about 1-day.
I’ve been looking at Apple if it dips below $100.
I believe the time to buy is when everyone is most negative. That’s why I bought Wells Fargo…best of breed!
It ain’t that complicated…but there are no guarantees. I have a small % of my liquid assets in the market….so you are right, it’s more of a hobby. If I was sooooooooo confident in my predictions, I would have gone “All In”. I’m really not much of a high risk taker PI….when you look in terms of % of investable funds. It’s just that these KLOWNS tend to think soooooo small and are the reactive SUCKERS who buy HIGH (Too Late) and sell LOW (Too Soon) based on noise from Wall Street. They also tend to love to see the “sky is falling” so simply are mentally incapable of buying when bad news is prevalent (when they should)!
I know I’m wasting my energy trying to educate most of them.
GBS is the only Lefty Poster here who really gets it. Rog Rabbit can intellectualize the market…but is too angry & emotional to make real money.
@7 Nice post. I was initially irritated with Roger’s posts on this subject but then realized he uses this to make a point. Cynical, on the other hand, is just stupid.
A little techical analysis is in order. NOV? EMA, MACD, RSI, TDD, Fibs, Highs, Lows, Trends, Stochastic – all very bearish. Candlestick? Bearish Harami. You have to go to a five year chart to find the next level of support at $30. In other words, Cynical repeatedly attempts to “catch a falling knife”.
Cynical either doesn’t know what a stop loss order is or he quite purposely will not tell us where his is set so we won’t know if he was shaken out of a position.
Cynical is either clueless, deceptive, or both. As he’s a troll, we already know the answer.
I don’t particluarly like this bailout plan. I would like to see the market be allowed to correct itself more..
Trying to stifle some of the pain now will lead to more ingtense suffering later I’m afraid.
Make the greedy Wall Street “puppeteers” who seem to own both sides of the aisle pony up.
Allow real estate prices to continue to drop.
Allow foreclosures to occur….increasing the supply of houses on the market, lowering the prices. That’s a good thing…and I own 3 homes plus other property.
14. Steve spews:
“You have to go to a five year chart to find the next level of support at $30. In other words, Cynical repeatedly attempts to “catch a falling knife”.
Steve–
Put your money where your mouth is!
If you really believe NOV will drop to $30, buy puts or sell short.
Seems like you are merely “kibitzing” from the sidelines and not putting up anything other than “static noise!”
Get in the game..
Make your trade today and post it.
We’ll see.
By the way, it looks like the McCain campaign got caught in the “VoteForTheMilf.com” cheap trick.
Source: McCain Campaign, Of MILF and Men
The Washington Post started investigating the site, which has a re-direct to a page on the John McCain site which opens with a video of Sarah Palin.
They found that the site, along with .net and other extensions, was registered on the same day the McCain campaign announced that Sarah Palin would be the V.P. nominee.
Calls to the McCain campaign elicited denials that they had anything to do with the sites, or the link. They pointed out that the sites did not use the same domain as the McCain campaign site (as if that means anything).
But shortly after reporters called the McCain camp, the link between the sites and the McCain campaign site suddenly disapeared, replaced with a link to a Wikipedia article on domain names. When the reporter called back, the McCain campaign denied calling the domain registar to have the link disabled, which again doesn’t mean much – the registar wouldn’t disable a link in a site, the most it would do is pull an entire site down, and then only if it violated the TOS or applicable laws.
Looks like the McCain campaign got caught using a cheap trick in publishing the site with the linke, which in itself is no big deal – just a passing story which dissapears within the daily news cycle (teenagers & young voters might actually appreciate it).
But why lie? Clearly the timing of the link being taken down shows that the McCain campaign knew who was running the sites, and it was someone who would quickly respond to orders to shut down the link. All they did was prove that, once again, they will lie about virtually anything they think might make them look bad.
@16 You’re too stupid for words.
Although I normally consider this nobody’s business, I’m holding only three positions in my Roth-IRA account, including QCOR, which was QSC when I bought 10,000 shares back in 2003. At the time I also bought 10,000 shares of LIFC, which I sold earlier this year before the takover. Do the math. This last month I’ve been accumulating CVM and ONT. CVM just completed construction of their new manufacturing facility and goes into FDA Phase III trial soon for its head and neck cancer “orphan” drug, tubercine. ONT is the Flash video codex leader. Check with me in about five years and we’ll see how I did.
Troll @ 12: I don’t think mortgage-backed securities, by themselves, are the problem. They’ve been around for quite a while. I remember locally there was a local firm that went bankrupt in the early 1990’s selling mortgage-backed securites to private investors -the name was Delta something-or-other.
The problem is twofold: (a) the known value (safety) of the mortgages in general, and (b) that the securities are clearly divided into classes which reflect their relative safety. Much like bonds are classified by Moody’s.
As for the safety of mortgages in general, the old rule was that if you were putting less than 20% down payment, you needed to jump through a lot of extra hoops to prove you were a good risk. Borrowing for the down payment was something the banks dissallowed and took considerable steps to prevent (borrowers had to prove the source of down payments which suddenly appeared in their bank accounts). Income verification, employment history, background checks were all routine details of the application process. But that all dissapeared in past six years, with people being able to buy houses with no down payment and no income verification (so-called “liar’s loans”). Investors looking to make a quick buck flipping houses within a short period (often 30 days or less) drove up the housing prices quickly, pricing regular home-buyers out of the market, and accellerating the foreclosure crisis when the market turned south. We have to go back to the more reasonable mortgage process and regulations as they existed in the 1990’s. That would make the mortgages themselves more valuable due to their safety, even if the profit margins on the loan origination aren’t so high.
As for bundling the mortgages into mortgage-backed securities, a good part of the current crisis is nobody really knows how bad the problem is. Wall Street has to assume the worst, until proven otherwise. By bundling good, traditional mortgages with sub-prime mortgages, Wall Street hid the ticking time bombs within the packages and thus misled investors in those securities. That lack of trust is why the bottom fell out of the banking and investment markets last week. Reasonable regulations requiring that mortgages be bundled into the same class of risk before being offered as securities would be a good first step. We may need to “un-bundle” the current problem securities in order to help solve the current crisis.
Regarding banking stock: I asked my friend (a retired stock broker) why WAMU stock went up a bit this week, after selling off it’s operations and with the remaining shell of the company filing bankrutpcy.
He explained that investors who bet against the company (buying “puts” in the market) still have to deliver the stock to the sellers when the puts expire. The slight rise in the stock price from it’s nominal value as scratch-paper can be attributable to that.
Signs point to global recession, independent of bailout bill, and market declines. Go figure.
We need to start building things here again.
But the financial ecology promoted by the republicans is killing our jobs.
IE, if you keep deregulating and deregulating, eventually it’s cost effective to ship those jobs overseas.
Thanks, Troll and Marvin.
One thing we are sorely missing in comparisons between 1933 and 2008 (75 years!) is an excessin in manufacturing capacity. Our factories have been closed, the land sold off to condo & retail developers, the tooling sold for scrap, and the trained workforce sent to put boxes of Chinese-made goods on the shelves at Wall-Mart.
One of the essential elements of a long-term U.S. resurgent economy is to renew our industrial base. That’s going to take a lot of work. For one thing, we have to persuade our “best and brightest” youth that there is a long-term profitable future in industry which justifies their investment in time, education, and energy. Currently, students expect that pursuing “industrial engineer” degrees have the long-term market potential somewhat akin to a that of a philosophy degree.
23 You got it. In spite of the fact that our financial institutions have all been allowed to become rotten to their very cores, what’s happening on Wall Street is still really a symptom of the fact that our economy itself–you know, the real one, where people grow lettuce, buy lumber, cut other peoples’ hair, build airplanes, drive trucks, eat Happy Meals, and so on–has been a dead man walking for quite some time. We can spend $700 billion or five trillion or however much treating the symptoms, but we’re still fucked unless we do something about the underlying disease.
The bailout is still another BLANK CHECK (for all intents and purposes) to a mis-administration that cannot be trusted.
I’m calling Jim McDermott’s office (who has been a disappointment on this issue) and telling him to vote NO.
Those assholes are pissed off that we told them to go screw themselves over Social Secuity and THIS IS THEIR CHANCE!
Steve–
Good for you!
But you were saying NOV would drop to $30.
If you believe that, sell short or buy puts.
Gold is DOWN to $846 …DOWN over $41/ounce
Oil is DOWN to around $95 and Gasoline futures also dropped 10 cents/gallon.
This economic thing has always been a bit like chasing your tail. Spikes in Gold are usually the result of major insecurity in the economy, markets and world situations.
The fact that it is DOWN so much today is encouraging.
Same with Oil and Gasoline futures.
I think those are good signs.
Hey …on CNBC we have none other than Carolyn Cheeks-Kirkpatrick (D) speaking on the bailout. She is the mommy of the Detroit Mayor…errrr…FORMER Crooked Detroit Mayor.
Nice of her to crawl outta that hole she has been in. She was only ashamed for a little while.
6, 7 – My portfolio has gotten slammed but is still worth 8 times my original investment. That sure beats earning bank interest — or working for low wages with no benefits.
Here’s just a few thoughts for these unsettled times:
1. Paper losses don’t matter very much. You don’t lose real money if you don’t sell your shares. I still own the same shares I did last week.
2. Even though the quick-sale value of my shares has gone down, my pension and social security haven’t. So the market crash isn’t affecting my income or purchasing power at all. (But the Bush Inflation is, and that’s a problem.) Anyone who still believes 401(k)s are an adequate substitute for defined-benefit pensions or that privatizing social security is a good idea has rocks in his head.
3. I have a well-diversified portfolio but that’s no protection against a market like this. For example, my shares of IBM have lost almost $20 in the last 3 days. I also own GE, Microsoft, and other blue chips — and they’re all getting clobbered. This market is sparing no stock or investor.
What’s probably going on is that leveraged hedge funds and other institutional investors are being forced to sell large blocks of shares at any price to meet margin calls, redemptions, and other legal claims on their resources. For example, insurance companies whose stock in Lehman Brothers and WaMu is now worthless still must pay insurance claims, and to do that, they have to sell other holdings.
There is also well-founded investor fears of a major recession. The big picture is that wages haven’t gone up since 1970 and the credit that propped up consumer spending has dried up. In addition, consumer spending has increased in importance as an overall percentage of the economy. Consequently, we are facing a major consumer retrenchment — and that means a deep recession.
The underlying cause of this malaise is stagnant wages. U.S. real wages have been flat since 1970, and have actually declined since Bush took office. That can’t be blamed on poor economic performance; worker productivity is way up, and economic output as measured by GDP is way up. What has happened is that Capital has taken all of the economic gains of the last 40 years for itself, and then some. Capital, by getting so greedy, has shot itself in the foot because this is absolutely undercutting the ability of consumers to support economic growth, and until this situation is reversed and more of the nation’s economic output goes to labor, the economy will continue to sink. Then nobody will have anything. Except us rabbits will still have our holes and free grass, and after the Human Die-Off, we will occupy your niche and become the dominant species!
My long term strategic plan is not only still on track, it’s accelerating! The plan calls for waiting for you humans to destroy yourselves, making room for a new dominant species, which of course will be a species that can reproduce rapidly. Therefore, the idea is to fuck as many cute fluffy female rabbits as possible every day! Sure, a lot of the bunnies will get run over by cars while you humans are still around, but that situation is only temporary. Eventually the world will run out of oil or humans, or both, and then the rabbit population will explode! There will be so many of us no other species will be able to compete and we’ll crowd them all out. We don’t need other animals on this planet; all we need is dirt to dig burrows in, and grass to eat. There will be plenty of both even after every square foot that isn’t inundated or frozen is jam-packed with rabbits! Mark my words, rabbits are gonna run this place! And I’ll be their king! Look at Australia as an example. That’s our model for the rest of the world. It’s foreordained. When Jesus said “the meek shall inherit the earth” what he meant was “rabbits shall inherit the earth” because “meek” and “rabbits” are the same thing. I’m sure gonna have a sore pecker from all that fucking before this is over, though.
The rot on Wall Street that worshipping the Bitch Goddess of Deregulation has led us to is that every major financial institution has become a catch-all of disparate and sometimes conflicting functions–commercial bank, investment bank, brokerage, mortgage broker, hedge fund operator, insurance company….hell, just about everything except bookie joint, and the way some of them operate, they’re pretty damned close to that. Every dollar that goes in becomes part of a byzantine scheme of manipulation, leverage and bookeeping sleight-of-hand, the objective of which is to maximize the income of the folks sitting at the top of the food chain. Any responsibility to the larger society in which these institutions operate is oh, so last century.
29 The thing to keep in mind, is that every penny of that $700 million is going to disappear into the gaping jaws of the Great Wealth Gobbler, therein to be digested with hope, but no guarantee, that the whole thing is going to poop out a few particles of benefit for the man on the street.
Shortly before noon, DJIA down over 300 points. As of 12:08 PDT, down 291.67 points to 10,539.40.
I really expected a rally today, based on the news of the Senate vote. But maybe it’s not the institutional investors who are leading the charge? Maybe a lot of individuals are deciding that they don’t want to ride this roller-coaster any longer, and are putting sell orders into their broker?
A fellow I know got a 30-day notice to vacate on his rental house. The landlord is in trouble, and plans to sell the house immediately, even if he takes a bath. Seems he lost a lot in the stock market when the drop last week caused margin calls, and he had to sell at a loss. He lost the rest when WAMU collapsed. Now his banker has pulled his line of credit, and has demanded immediate repayment (his line of credit was secured by his stock holdings).
My friend offered to buy the house, but the landlord can’t self-finance (he needs the cash now), and the bank isn’t lending on mortgages right now (except on perfect credit and very large down payments 20% plus, which he can’t raise in the short amount of time). So he’s looking for more rental housing, and he doesn’t have much time. We are going to help them start packing this weekend.
Just another story in the life of the Bush financial miracle machine.
@26 “Steve–
Good for you!
But you were saying NOV would drop to $30.
If you believe that, sell short or buy puts.”
No thanks. I was simply offering some technical analysis for consideration. I have no idea where NOV is headed. So take it with a grain of salt. I last “traded” a couple years ago. Before that, in 2000. During the SARS scares a few years ago I was playing AVII like a fiddle, as well as a few trades on XOMA. I wouldn’t touch either of them now. I’ve had my share of losses. EMLX back in 2000. Forgot to set a stop loss – ouch! The day I bought it, it went from 210 to 240. The next morning it dropped 100 points while I was pouring myself a cup of coffee. Dropped another 40 points before I unloaded.
I seldom discuss this stuff anymore as my best friend and mentor died last year.
Good luck with your trading. I mean it.
Rog–
Some decent insights…but I doubt you are including COST OF BENEFITS of workers in your analysis. Benefits should always be included as a part of Wages…but aren’t. We all know what has happened with Health Care…but there is also more paid time-off & other perks.
If I invest capital, I expect a reasonable return. Playing around with short-term market opportunities is not really investing capital..it’s legalized gambling. I know that. But it’s part of the vast overall market. There are “speculators” in everything you can think of…commodities like Gold, real estate, stocks & bonds, Baseball cards…..you name it.
It is interesting that folks like yourself Rog, who complains about greedy Capital has often benefitted. Not just in your personal investments…but also in your State Retirement. Workers have received pension benefits in various forms when the market prospered. When it flounders, the underfunding increases meaning someday someone must pay unless investment returns drastically imprive.
The DOW is DOWN 356.
I expect it to close DOWN much less.
Hell, what do I know. It doesn’t really matter when you only own 2 stocks currently….speculating like I am doing.
OIL is under $94
Unleaded Gas Futures are DOWN to $2.24/gallon.
Investors are losing money.
Consumers, at least of Gas, are benefitting today.
Cynical @ 33:
Dow closed down 348.62 at 10,482.45. I doubt that was the rally you were expecting.
rhp–
Nope…but really all I care about is NOV (which I bought 2,000 shares @ $40.50 and it closed @ $41.15…so I made $1300) and Wells Fargo which was DOWN $1.54 today or a Loss of $6,160. Wells Fargo is UP .29/share in after-market trading however.
I’ve got some homework to do tonight.
I think we are in for some kind of snapback rally. Apple did hit $100/share today.
I had an order in @ $98.85.
May try again tomorrow…not sure what price.
33 So, why should benefits “cost”…or at least why shouldn’t there be some ROI on ’em? Presumably healthy workers are more efficient than sick ones. Besides, the provisioning of health care is insurance, whether it’s being handled by a private company, the employing corporation or the government. Likewise, a pension is nothing more than an insurance policy against someone failing to croak in a timely manner after retiring. Now, an insurer simply takes in an up-front premium, invests it in something that grows and holds the proceeds in reserve against the possibility of having to pay off. By screaming that employers or the government can’t reliably play that game and come out ahead, the right is essentially admitting that nobody can. Apparently the “solution” is simply to leave everyone to his or her own devices.
Back in the “Leave It To Beaver” age, which seems to be the time everyone harkens back to, there was a hard-won compact between business and labor under which companies (the better ones, anyway) took care of their employees from cradle to grave, and the employees in turn were obligated to years and years of enthusiastic and diligent service. Now, that’s been replaced with KMAGYOYO, and you know what? It isn’t working for sour owl shit.
Go Art. Great posts!
Gawd I hate day traders. They are systemic of what’s wrong with America. Just sayin.
38 “Day traders”? You mean “compulsive gamblers”?
Sorry, kirk91 @ 11, but the CRA is partially to blame. You can’t loan money to people who can’t pay it back and then expect things to be hunky-dory.
The first domino in the chain to this disaster is the CRA, followed by slicky-boys selling CMOs, and Fannie and Freddie asleep at the wheel.
You have to apply sound logic to granting loans. There are people out there who simply have no business borrowing money.