'Cash for Clunkers’ — It’s a Lemon

[cobra de capell]

'Cash for Clunkers’ — It’s a Lemon

http://pajamasmedia.com/blog/cash-fo...4-its-a-lemon/

Interesting article - how it works, why it's not going to work very well.

Are Congress people morons or what?

[joe g]

Eventually it will come down to only using the money for GM cars
joeg

[Dan40]

The "cash for Clunkers Act" is the "Community Reinvestment Act," for cars instead of houses. It will do for Congress exactly what the CRA did for Congress. Buy votes from poor people. The unpleasant fact that it will put the poor in debt and screw the auto industry as bad as the CRA screwed up the home mortgage industry is just a shame, as long as the re-election votes come in.
Congress will come up with a "fix" for that problem when it can no longer be ignored [probably not so many years on this one]. The "FIX," of course, will not work as hoped..............................

[1ntCobra]

Originally Posted by Dan40

The "cash for Clunkers Act" is the "Community Reinvestment Act," for cars instead of houses. It will do for Congress exactly what the CRA did for Congress. Buy votes from poor people. The unpleasant fact that it will put the poor in debt and screw the auto industry as bad as the CRA screwed up the home mortgage industry is just a shame, as long as the re-election votes come in.
Congress will come up with a "fix" for that problem when it can no longer be ignored [probably not so many years on this one]. The "FIX," of course, will not work as hoped..............................

One of the problems with the mortgage industry was that they assumed that houses would keep on appreciating in value indefinitely, and then changed lending rules to along those assumptions.

I doubt that lenders are going to start assuming that cars will appreciate in value after you drive them off the lot. If anything some of the big suvs and trucks depreciated faster then expected when gas was over $4. And that messed up lenders who made leasing deals. Just think about the lender who takes back and then resell the cars when the lease is over. Many of the lease lenders could have been upside down when they needed to unload the returned vehicles.

[Dan40]

The industry assumed that the houses would continue to appreciate. They should have got their fingers burned for their wrongful assumption on "Good" mortgages.

The sub prime, WORTHLESS, mortgages were forced by Congress passing and or repealing laws to prevent poor lending practices.

What the industry did should have caused them to loose money and fire some executives for poor leadership. That's the normal, natural cycle of business.

What Congress did was to Create worthless paper and put people in houses they would never be able to afford. Congress created an imaginary market with imaginary money. And now they are borrowing more money to pay our outrageous debt. And promising that the totally impossible will work fine.

Congress GAVE [in exchange for VOTES from the poor] the financial industry a license to steal. And now express SHOCK, that they did steal.

[cobra de capell]

Originally Posted by Dan40

The "cash for Clunkers Act" is the "Community Reinvestment Act," for cars instead of houses. It will do for Congress exactly what the CRA did for Congress. Buy votes from poor people. The unpleasant fact that it will put the poor in debt and screw the auto industry as bad as the CRA screwed up the home mortgage industry is just a shame, as long as the re-election votes come in.
Congress will come up with a "fix" for that problem when it can no longer be ignored [probably not so many years on this one]. The "FIX," of course, will not work as hoped..............................

See post above - no appreciating asset factor, like houses.

Anyway, I'm just not seeing how people driving an old clunker can all of a sudden afford a new car, period. When this bill was signed into law they were talking about 1 million gas guzzling cars off the road. It's a really stupid idea with the rules framed by morones.

[cobra de capell]

Originally Posted by Dan40

The industry assumed that the houses would continue to appreciate. They should have got their fingers burned for their wrongful assumption on "Good" mortgages.

The sub prime, WORTHLESS, mortgages were forced by Congress passing and or repealing laws to prevent poor lending practices.

What the industry did should have caused them to loose money and fire some executives for poor leadership. That's the normal, natural cycle of business.

What Congress did was to Create worthless paper and put people in houses they would never be able to afford. Congress created an imaginary market with imaginary money. And now they are borrowing more money to pay our outrageous debt. And promising that the totally impossible will work fine.

Congress GAVE [in exchange for VOTES from the poor] the financial industry a license to steal. And now express SHOCK, that they did steal.

All true - I wonder what those people that ended up in the middle of a foreclosure think about who may have given them a little indirect push to buy? Yes, it's their fault but relaxing standards allowed them to go that route - a foolish move at best. It seems that those who profess to look out fore the little people, democrats and liberals, appear to screw them instead and on a regular basis. A leg up, not a hand out is the only way to go.

I suppose the liberals thought that poor people or low income people would go for, for example, a $100,000 house but instead they went for a $200K to $350K house on the come. It seems that whenever laws are passed that attempt to influence the behavior of people, especially poor people, they end up screwing them versus helping anyone.

[stuartb]

The biggest problem with the democrats is that they have to keep their constituants poor to keep their votes, but make it look like they are trying to help the poor folks. Hence it just cost everyone else more.

[Ron61]

After reading the bill it is hard for me to see how even if you qualify for the maximum of $4,500, that is going to make it possible for the unemployed and poor to buy a new $45K car. And of course the dealer will most likely add just a little more to the car since they will handle most of then transaction. Another publicity grabbing plan to show how the politicians are trying to save the world, and improve their bank accounts.

Ron

[Tom Kirkham]

Signed into law.

http://www.popularmechanics.com/auto...s/4322912.html

What clunkers will you be sad to see go to the shredder?

[Ron61]

Some of them I don't care about but I had rather see politicians go to the shredder. That would do far more good for the country and environment than all of the so called clunkers in the country.

Ron