patrick.net

Peter P,

Agreed, but let's level the playing field and do it across the board. :)

PAR,

I for one am not assuming there will be any scenario that leads to, as you put it, where "JBRs are going to get envelopes in the mail so that we can send checks directly to FBs."

I believe that this is just a lot of political grandstanding by a Dem who envisions himself a "fighter for the common man," and who's more "common" than a FB. I'm sure he'll get some good political mileage out of this proposal, but I bet, and I pray that this thing dies in Committee. FBs (especially subprime) hold absolutely no political clout - heck, does that segement even vote? - but let's hope Dodd's idea doesn't snowball.

On the other hand, the real political clout is held by the brokerage houses, HFs, institutional investors that will probably bear a significant part of this fallout.

DinOR,
Thanks. You're being overly optimistic, though!

Agreed, but let’s level the playing field and do it across the board.

Hmm.....

I got it done–thanks for the link. Whew, they ask for a lot of identifying info–guess they want to cutback on the threats that he’ll be getting now?

Doesn't mean you have to give him your true identity. :lol:

It's like - Sen. Dodd to all the FBs : "Help is on the way".

Does anyone else remember that slogan from almost 8 years ago ? You know how the guy helped the people he promised to help.

I said real estate is our new religion. Christian Weller says it's a game of Jenga:

"Christian Weller, a senior economist at the liberal Center for American Progress in Washington, likened the housing market to the parlor game of Jenga, in which wooden pieces are piled into a tower, then removed one by one.

Fewer loans. Fewer sales. Lower prices.

"We know the bottom part is being pulled out," Weller said. "We don't know if the top is going to come crashing down on us."

http://tinyurl.com/yveppo

Real estate is a souffle. It rises and rises. But when you poke it with a spoon, it will lose some air.

They should take a vote on what everyone wants with their names and addresses:

1) FB bailout.
2) No FB bailout.

All those who vote for 1) will fund it. The only ones who will fund it will be the FB's.

@ skibum,

Well, no argument there! However I do feel it's important to get to the root cause of issues and the more of us that chime in the harder it becomes to sweep it under the carpet!

I mean, what WOULD motivate a guy to buy a house when he knows his credit sucks, the payments are out of his comfort zone, will likely re-set (driving them further out of reach) and pay an inflated price along w/inflated taxes?

C'ain't be but one thang and that's FREE MONEY!

How many of them would still have thunk it's a "bargain" to go out on a limb like that if there wuz a balook'in tax bill at the end of it?

Mama-lukah-boo-boo-day! (I rest my case) :)

The only "victimized" borrowers are those who were forced to sign up for a mortgage loan at gunpoint. Anyone know any such borrower?

Everyone else chose to get into a loan worth millions of dollars over a period of thirty years, of their own volition. They are supposed to do the research; it is their responsibility. If you walk up to a stranger and offer him one hundred dollars of easy money, his first question would be "whats the catch?"

These people, in their greed, took on loans that they shouldn't have taken on. Some managed to sell at the peak and consider themselves to be real estate moghuls.

Those who didn't are suddenly victims? If someone's greed and stupidity blinds their innate sense of caution, how does that make them victims?

Sriram G,

Exactly.

Mama-lukah-boo-boo-day!

BTW, good analysis on this topic

http://globaleconomicanalysis.blogspot.com/2007/03/1st-helicopter-drop-now-being-organized.html

A generally good economic blog.

The only “victimized” borrowers are those who were forced to sign up for a mortgage loan at gunpoint. Anyone know any such borrower?

This is exactly right! I have been saying this for years!

Borrowers who play this babe of the woods routine piss me off!!!

They commited a crime by lying on the application with help of a broker. Now they're going to get away with it?

I think I am going to hook up with a bunch of thugs and rob a bank! If I don't get caught, I'll be rich! If I get caught, I'll just say that they made me do it, they'll let me go and I'll be no richer or poorer! Sounds like a solid business plan to me.

Siriam,
Exactly. It's like the "victims" of all those spams from some Nigerian finance minister begging for help to free up his millions of dollars with a promise of a cut of the pie. These "victims" are victims of their own greed, stupidity and lack of common sense. Yes, some foreign "dignitary" has searched out YOU, Mr. Amerikan dude, as the best way for him to redeem himself in his noble effort. Go for it, but don't cry when you've lost your shirt!

allah,

Why rob a bank when you can just walk in during regular business hours and rob your OWN home w/a cash out re-fi?

Real estate is a souffle. It rises and rises. But when you poke it with a spoon, it will lose some air.

Does that mean if we open the oven door and peek at it, it will deflate?

(BTW...isn't the souffle analogy what that idiot "economist" from UOP keeps using-I forget his name?)

the "other",

Why waste your time here! You should be trying to outbid Casey when the spring bounce arrives! Buy now!

allah,

Why rob a bank when you can just walk in during regular business hours and rob your OWN home w/a cash out re-fi?

Less paperwork.

If they must bailout something, they should bailout the large banks.

Why? If individual FBs don't get a free pass, why should the banksters? Isn't letting bad BUSINESSES fail a critical part of the free market's "creative destruction"? Won't the FDIC reimburse middle & working-class depositors in the event of a bank failure (the only true innocent "victims" we should really be concerned about: people like us)?

Hell, I'll even go one further: If you had to choose between bailing out average dumbass FBs or the high-flying greedbag banksters at BofA, Wells-Fargo, Morgan Stanley, hedge funds, etc., which would you choose?

(A: Neither --yeah, I feel the same way.) But if you HAD to hold your nose and choose, which would it be? I'd take the regular schlub over Boomer McGreedbag any day.

Thanks to skibum & others for the write-your-Congress rep links. The idea of drafting a form letter or cut-'n-paste is a great idea. Anyone have any model examples they'd like to share here?

PAR - I understand what you are saying. But it took under 5 minutes to draft a couple of emails and send them out. Maybe it won't help, but it certainly won't hurt.

Thanks for Sue McAllister's email.

Why? If individual FBs don’t get a free pass, why should the banksters? Isn’t letting bad BUSINESSES fail a critical part of the free market’s “creative destruction”?

I said "if they must".

But if you HAD to hold your nose and choose, which would it be? I’d take the regular schlub over Boomer McGreedbag any day.

Honestly, would you like to see billionaires losing billions (and still remain billionaires) or would like like to see your peers (i.e. resource competitors) losing their shirts?

Fine, I am being evil here. :twisted:

HARM,

Mish (Mike Shedlock) did a great piece that took the impacts of a bail-out to their logical conclusion and as you might suspect... it isn't pretty!

PAR - I understand what you are saying. But it took under 5 minutes to draft a couple of emails and send them out. Maybe it won’t help, but it certainly won’t hurt.

They probably have spam filters that look for stuff like:

"bailout"
"bastard"
"taxpayer"
"subprime"
"pissed off!"
"ARM rest"

that eats the email before it even gets to them.

In the U.S. Senate, Banking Committee Chairman Christopher Dodd (news, bio, voting record) said he may offer a bill to protect consumers who were "victimized" by subprime mortgages they can no longer afford.

I'm normally the biggest 1st amendment supporter, but this guy should be burned in public for sedition.

IIRC Senate staffers do a rapid for/against sort in high-volume email situations. Some mark thoughtful notes for a best-of folder. Some may filter, but I've never heard of it.

Wow, has Hell frozen over? The LA Times published an editorial I wholeheartedly AGREE with for a change:

No bailouts for sub-prime borrowers:
Trouble in the mortgage market would be bad for the economy. But there's no reason for a federal bailout.

Look at these FB's

When they bought their home in 2004, the Sanons had a feeling they were getting in over their heads - they were right.

Very intelligent people! I have a feeling a company is going to go under....I'm going to go out and buy stock in this company!

Malcolm, please choose your diction carefully. The word "burn" can have many meanings. :)

PAR :

The Sen Dodd bailout plan is a an election minded hoax. He is just trying to be the first one and posturing to be "on the side of millions of people". It's pure BS. Happens all the time in politics.

BUT. "The Bailout" will happen. It could come in any form. The FED has no choice but to reduce rates. Maybe 0.25 or 0.5 to start with and going to 4.0 by the end of the year. It would happen by bailing out the GSEs and letting them buy back all the bad debt from the bagholders. This will save GSE's, this will save the Wall Street banks.

Our friend "theotherside" is jumping here because he thinks it's going to hurt only the JBRs. The truth is, it will hurt the savers due to depreciating USD. But taxes will increase for everyone. And not rain on his parade, but the FBs are not going to get any benefit either. They ARE screwed. The bailout will come too late for any FB to benefit even it comes their way. Only the big banks, GSEs etc will be bailed out.

Isn’t letting bad BUSINESSES fail a critical part of the free market’s “creative destruction”?

HARM, for the record, I don't think anyone should be bailed out, including (especially) the banks and the lenders. Banks are supposed to filled with intelligent, educated people who know how money works. They especially do not deserve to bailed out.

Let them all fail, I say.

Maybe some catastrophe is what this country needs to deter people from (a) looking for the next hot thing to "invest" and (b) spending money that they don't have on things they can't afford.

I thought something productive would be setting up trading positions for the upcoming storm.

Has anyone caught this article?

"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager (Jim Rogers) told Reuters by telephone from New York.

"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops."

http://tinyurl.com/3defcv

I like Jim Rogers, the investment biker and adventure capitalist.

PAR,

(Sets down pitchfork)

That mindset is much more deeply entrenched over at Ben's. I don't think anyone here is seriously hoping for an end to banking as we know it. On the contrary, I've already said that subprime survivors will pick up and carry on where they left off. A little bruised but once you've had a taste of 3 pts. on a 500K loan honest work just doesn't cut it.

Banking as an institution isn't going to fail, here. Individual banks will. It's like saying the housing crash is going to ruin the american homeowner. Not true. It's going to ruin the FBs. People who own their homes outright, or who bought before the bubble will be fine. People who bought IN the bubble without extending themselves beyond their means will be fine, if poorer. They aren't FBers, just people who bought at a poor time. (And who, if they don't wind up having to move quickly, will be able to mitigage that 'poorer' a little bit.)

Individuals banks and individual borrowers who took risky bets on risky loans deserve no bail out. The banks will get bought for dimes on the dollar, and the borrowers will be back to renting.

Incidentally, there really ARE people who were 'victims' of the housing bubble. But the fraud there is more than "Get this loan, and if you can't pay it, sell and make a ton of cash!" That wasn't fraud. There was a place in the bay area offering 'mortgages' that turned out to be worded in such a way that the 'buyer' would never actually own the house. Instead the 'mortgage' company took their money, used it as a downpayment for THEM to buy the home, and then rented to the mark for enough to cover the mortgage. All of their contracts were set up to look exactly like mortgage forms, but they weren't. Helping these people get real mortgages for the original terms by seizing the assets of the company bilking these people and covering whatever else is reasonable.

Helping the idiots who bought into the housing bubble pay off their mortgages is not. Nor is giving taxpayer money to the banks who stupidly bought/funded these guys.

Peter, jokingly I mean it literally. As in tied to a stake, a lit.

Oh, Malcolm, I am sure you did not mean to do anything illegal. ;)

I know, we're just goofing around. This whole notion does have me a little pissed off because it is playing out exactly as I've talked about for years.

1st they paraded the lenders around, and even had Jesse Jackson testify about how all the deadbeats were conned by predators.

Now, the slippery slope reaches the bottom as heroic politicians discuss how they are going to rescue everybody.