patrick.net

I REALLY SERIOUSLY think that we need to wildly exaggerate the link between subprime mortgages and terrorist funding, in order to make it more difficult for candidates to take any position that appears to benefit the subprime idiots - f.borrowers && f.lenders. While I do not generally like using the 't-word' (as a revised Godwin's law), that seems to be the only quick way to discredit these half-arsed or ill-motivated bailout schemes. Especially to get through to Joe & Jane Sixpack.

SP

I cannot trust any president who calls himself a democrat.

OK. Barack Obama is supporting a bail-out. What are the alternatives ? Which candidate has a sane position on this issue ?

Mr. Obama said:
If we are serious about stopping this crisis […]

Crisis? What Crisis? This is no crisis, my dear chap. The spectacle that we are witnessing is actually a long-overdue END to the crisis. The entire edifice was overrun by vermin - and just as the process of decontamination has begun, you wake up and advocate that we "help" these vermin maintain their undeserved occupancy of the premises?

Washington needs to stop acting like an industry advocate and start acting like a public advocate.

Ah, so you too are a hopeful for the Orwell Award. Well played.

SP

Ideally, we want someone like Sarko.

Which candidate has a sane position on this issue ?

I wonder what Ron Paul has to say about that.

I don't know who said this, but it was quite well put. (paraphrasing)

"Since the poor vastly outnumber the rich, and yet the rich wield vastly greater influence than the poor, it is essential for any politician to advocate a policy that promises to take from the rich and give to the poor - and implement the policy in such a way that it actually achieves the exact opposite. ... This stratagem has the effect of increasing the number of poor and strengthening the influence of the rich - so that the same approach can be used to even greater effect for the next election."

SP

I cannot trust any president who calls himself a democrat.

Both major parties are so corrupt, entrenched with special interest and ossified that, aside from Culture War issues, it's becoming hard to tell them apart.

Sometimes, it really cracks me up when people say that the market has failed us. I agree that the market does not solve all problems, but this is why we still need military power.

In most cases, the market fails because we fail the market. We keep intervening for populist reasons and throwing the market out of whack.

The subprime crisis is a direct result of us tinkering with Free Market. We changed the risk-reward equations and we have created moral hazards.

Argh!

SP, that is very true. If I become a politician one day, I will keep that in mind.

Both major parties are so corrupt, entrenched with special interest and ossified that, aside from Culture War issues, it’s becoming hard to tell them apart.

Very true. I cannot trust any politician who calls himself a politician.

And speaking of Culture War issues, are these the people you DO trust, Peter P.?
http://tinyurl.com/2yqyks

I would love to see Ron Paul's take on this mortgage issue. It's probably one of the more sane.

Will Obama also bail out the poor women who were enticed to buy Hermes bags because salesgirls told them they could just charge it and they needed one to live the American Dream? What about people who charged big screen TVs and cars they couldn't afford? If someone was forced to buy a house with a gun to their head, or the few cases where mortgage brokers did insert other loan terms in the middle of documents then fine, help the people, but otherwise people will have to learn a lesson they should have learned at age three- there are consequences to your actions, not all of them what you'd like.

And speaking of Culture War issues, are these the people you DO trust, Peter P.?

There should not be a Culture War. But such issues do not concern me, unless any party is going to promote vegetarianism.

You need a lot of trust from your Fugu chef, but probably less so from a "decider." :)

Unfortunately, they could use a few bad fugu chefs in Washington these days.

"long-overdue END to the crisis"

Exactly! What is this? A "Save the Dodo" campaign? I've got to agree with "Mo-Town". We already have a multitude of regs. that deal with this issue. The real answer lies in just how flexible the lenders will (or can afford to be) in granting loan work-outs.

SeekingAlpha and CR are awash in commentary on why any form of bail-out only prolongs the agony or makes it even worse. We called this thing on the money. At what point is our credibility no longer in question?

I can just hear the victims - "I make minimum wage and I only bought the million dollar house because my broker told me I could afford it."

"Never mind that I got greedy because everyone told me it would be worth $2 million in 5 years."

"Never mind that I knew I had other options like renting."

Many parties were at fault here - the government, the lending industry and the greedy speculators. However, politicians and media will spin it such that the former and latter were innocent and the only guilty people were the "predatory" lenders.

50 years from now, when kids study about the great housing bubble of 2000s, they will hear about the evil lenders, the victim homeowners and the savior government. And they will believe it. Why not? It worked for the great depression, didn't it? Everyone knows that it was all businesses' fault and the government stepped in and saved the country!

Which button looks better?

http://www.buttonsonline.com/2008/paul.html

I'm sure all of the candidates have the best polling data money can buy......BUT.......A bailout of the FBs (seems to me) would be political suicide.....wouldn't it????

As so many "economists" tell us these days:

"The housing problems are a tiny fraction of the overall picture and shouldn't affect most."

If that view is accurate.......a bailout might not go over well with the vast majority.....

It worked for the great depression, didn’t it? Everyone knows that it was all businesses’ fault and the government stepped in and saved the country!

Actually, several evil men in Europe and Asia "saved" the economy. The New Deal was a bad deal.

I like how Obama's excerpt starts with:

This all started as a good idea — helping people buy homes who previously could not afford to.

i.e., the whole "let's increase the homeownership rate because it's a good thing (by any means necessary)" was a Bill Clinton legacy. Obama's not going to dis his own party while pandering to the crowds.

Peter P, I was being sarcastic. I hope that was clear in my post. Maybe not.

As for the New Deal, I don't like the historical accuracies anymore than the neorevisionism that's popular today.

The world was not a happy place in 1933. The New Deal was, at the minimum, a very important political tool that kept the country unified well enough to enable it to mount the war effort. In comparison to war-build spending, the New Deal spending was minuscule. Most people think far more money was spent on the New Deal than actually did because they confuse ND spending with war effort spending. An example is the "cost-plus" system which compensated manufactures churning out war machines. I always hear this called a "New Deal policy", when in fact it was entirely unrelated to (and not implemented by) the New Deal.

Sometime I think everyone analyzing Depression era economics forgets about the underlying world drivers at that moment in history. Economics may have been the fuel, but a colossal clash of ideologies which would decide how the world would be organized for the next century was the game.

Anyone see this gem (posted over at Ben's). Almost restores my faith in American journalism... almost. Pay close attention to the parts about Liz Seither and try to deduce the author's attitude towards her:

Down, but not out: "I'm not a real estate bum," Realtors say

*inaccuracies*

this little factoid seems to haunt just about every textbook explanation of the great depression. can you explain this statement further? no one else seems to be able to.

The War gave people a new focus. It created demand. It created employment. It set the stage for American supremacy in the 20th century.

Economics may have been the fuel, but a colossal clash of ideologies which would decide how the world would be organized for the next century was the game.

And thanks to the invention of nuclear weapons, a deal was reached.

"all Americans — no matter what their income level — should have the power to reach for that dream."

This statement bothers me the most. First off, calling it a "dream" is perpetuating the image RE agents have been using for decades to play on the emotions of potential buyers. It's not a dream, it's just a house/condo/townhouse. Reminds me of car salesmen who refer to the vehicle as "sexy". A house is not a dream and a car is not sexy. They're just things.

Second, the notion that all Americans, no matter their income, should be able to buy a house is irresponsible. It denies the very real, very un-dreamy financial responsibility that comes with purchasing a house. It's the same kind of rhetoric that got us into this mess.

It doesn't surprise me Obama made that statement. His words have been consistently empty since he started his campaign. All his flowery talk makes me long for another 4 years of Bush bloopers. At least those make me laugh.

His words have been consistently empty since he started his campaign.

I agree. No matter how hard he tries, he is not MLK. He should fire his speech-writer and hire David LeReah.

im talking about the ‘bailers’ from asia and europe. who were they? when and how did it happen?

Who? Huh? The Original Axis of Evil.

Peter

TOB == TOS == Troll

Subsequent Trolling will be yanked.

Sounds like a REIC bailout more than a FB bailout.

Would the 'fund' make the lender whole on the short sale loss? That will popular on wall street. And fraud street.

I believe the reason the short sale is very difficult to get approved is due to lender has to agree to a real loss and the FB has tax consequence.

When these are removed you would see a MASSIVE abuse of the new federal short sale make whole system. Probably realtors/investors asking for short sales (and getting them!) for insane reductions.

The new mortgage rating system is just mumbo jumbo - non monetary so who cares.

who were the ‘evil men’?

A. H.
B. M.
Emperor H.

Bernanke (politely) brushes off Senator 'Bailout please' Schumer with a "Dear Chuck" letter:

http://blogs.wsj.com/economics/2007/08/29/text-of-bernankes-letter-to-schumer/

The short version via the 'ol bullshit-filter:

"Yeah, those FBs and hedgies sure are in a pickle, huh? Must suck to be them...

Oh, wait, a lot of reckless, irresponsible subprime lenders 'n hedge funds are based in your state, aren't they? And a lot of your buddies are up for re-election next year, aren't they? Damn, it must sure suck to be you too!

Hey, maybe you bleeding hearts in Congress can turn the FHA into some kind of subprime borrower payment-reset refi squad or something... I mean, assuming the borrowers are like "creditworthy" 'n stuff (most obviously aren't). As long as it's off *my* plate, I could give a rat's patoot.

Oh, and btw, I'm *still* not lowering the FF rate or encouraging Fannie/Freddie to start buying more Alt-A toxic waste. But you have nice day anyway, m'kay?

Peace out,
Ben"
XOXOX"

I'm gaining more respect for old HeliBen day by day.

I’m gaining more respect for old HeliBen day by day.

Same here.

I do think the 417K FHA limit is too arbitrary. It should be 0.

The real victims in this crisis are the millions of borrowers who followed the rules, whose only crime was taking out mortgages lenders told them they could afford.

It's the house FBs can not afford. I really object to this language that it is the loan that is a problem. There is a minority of borrowers whose problem is the loan but that' is not the common case at all.

Normally these borrowers could avoid foreclosure by refinancing their mortgages or selling their homes.

I fail to see to how being forced to sell your house because you can't make the payments and being foreclosed on is really any different when FB put 0% down. They have nothing to lose. Yes, their credit will be foobar but that's an accurate reflection of their ability to handle credit. The biggest problem foreclosed FBs have is the 1099 from the bank for the loan forgiveness amount. But Obama concerned about that, no. He'd prefer a massive intervention in the mortgage market by the federal government.

Perhaps Obama thinks the natural order of things is that asset prices only go up which would make him a President who is very dangerous for the economic health of this nation.

Too bad Ron Paul makes so much senses that it is difficult for him to get elected.

A housing bust will be good for the environment. A massive shutdown of home equity will reduce surely carbon emission.

Any bailout will directly or indirectly contribute to global warming.

Normally these borrowers could avoid foreclosure by refinancing their mortgages or selling their homes.

No. Normally, these borrowers could avoid foreclosure by being financially responsible. The past few years were not normal.

FYI: Right on target for this thread, SLATE is co-sponsoring a candidate Q&A forum and taking questions via email:

http://www.slate.com/id/2172924/nav/tap3/

My Question for Senator Obama (Wild Card):

"Senator,

You recently expressed interest in proposing some form of federal bailout program for distressed mortgage borrowers who took out subprime or "liar loans". I have a 2-part question for you on this subject:

1) Do you really think that all subprime or "liar loan" borrowers were really "victims", or just victims of their own greed and overconfidence?

2) Should all taxpayers, including responsible people who did NOT participate in the housing bubble, be forced to subsidize the irresponsible people who made large, reckless gambles and lost?

Thanks,
(HARM)"

Obama doesn't stand a chance of getting elected, America is not ready for a black President yet. His name sounds like Osama, a bad sign. Case closed.

Can we talk about more likely candidates? I don't think Hillary stands a chance either, she provokes too much dislike in non-supporters (myself included), and I don't think she has a Karl Rove behind her.

What is Edwards' stance on this? Romney's? Plus, whoever is going to be the next President is almost doomed from the very beginning, an one-termer most likely. Let's concentrate on the likely candidates for 2012.