patrick.net

Bush has already signed the bill in an oval office ceremony.

Is anyone here going to vote for him again?

Time to organize the backlash. I want to set up (or contribute to) a grassroots fund that organizes donations to the election campaigns of opponents of every Congraftsman and Senatwhore who voted yes on this bailout.

Ideas? Volunteers?

Brick Top: Do you know what "nemesis" means? A righteous infliction of retribution manifested by an appropriate agent. Personified in this case by an 'orrible cunt... me.

Does the bill have any provisions to limit exec pay and golden parachutes? Any with teeth?

I personally pledge $100 to anyone running against each of the 263 "members" (pun intended) of congress, and the 74 sphincters from the senate.

Another $ 100 if you pledge to reverse this travesty.

If you also manage to get Paulson on trial for treason, let's negotiate my campaign donation then.

Maybe this is just the end of America and it's pointless to resist.

Our congressman have repeatedly (Iraq, bailout) sold out, and now the sell out is literal, in the trillions in cash, taken from the people and handed to the banksters. It's getting to be more and more like Zimbabwe.

And they were democratically elected. I'm doubtful that the system can be reformed once the corruption hits this point, with the very rich robbing the people using the taxman's gun.

The only question now is how to get some degree of protection and security, and where to wait until the shit settles.

It would seem that after this bailout, the last thing anyone wants would be a reurn to easy home credit.

Alas, Freddie/Fannie has now said they will roll back the .5% fee they were going to impose on risky loans. Next on the list is a rollback of down payment requirements. Apparently, builders, realtors, and loan officers have complained that the fees and downpayments are to much a drag on the housing market.

The paper Paulson plans to buy will only have value if house prices rise to be worth the mortgages owed on them. Therefore, the only way the lawmakers can keep thier promise of taxpayers getting thier money back will be if homes shoot up in price. Thus, a side effect of this bailout is the gov has a new vested interest in driving up home prices.

It's not just $700B.

As a code monkey, I know when hundreds of us write tens of thousands of lines of code in a week, it's full of bugs and security holes. Now those hundreds of law monkeys wrote laws from less than 3 pages to more than 400 pages in a week, who knows how many bugs and loopholes they've (intentionally) put into place for the rich to take advantage of?

# Administrator Says:
The only question now is how to get some degree of protection and security, and where to wait until the shit settles.

1. Keep your money in Switzerland. Not in USD or any other fiat. Some in SFR for liquidity, some in PMs. Invest the rest as usual. Take profits every year and sock them away.

2. Look for a job in some country where they don't have currency controls, and have a decent living environment. Every quarter, empty out your savings account and transfer it to Switzerland.

3. Acquire and maintain your permanent-residence/citizenship some place where you can retire when you are ready.

Decouple Savings (1), Earnings (2) and Retirement (3) as much as possible, and you can cherry-pick the best combination. Above all, don't let your love for an America that no longer exists hold you back from moving forward to where you need to be.

Thanks SP,
doesn't Switzerland have a fiat currency as well?

How about New Zealand as a place to live? Not sure whether they had the same bubble trouble.

Not to beat a dead horse here: is it FINALLY time to buy a house? If our currency is as doomed as some say, why not buy something with the currency while we can? I have been renting & saving the past few years and really want a SFR to LIVE in not as an investment. If we are going to hyperinflate why not buy a home NOW?

Or do we think this bailout will have very little effect and prices will continue to plummet?

"Ed Forst, the former Goldman Sachs Group Inc. executive Paulson hired to head the transition team, started work last week and is charged with establishing the new Office of Financial Stability."

Office of Financial Stability. That's quite a name that Paulson chose.

Office of Financial Stability

To Forst, I presume falling house prices are "de-stabilizing." As is falling executive compensation.

Looks like the Dow fell ~400 points after the Bailout Bill was signed.

Monday will be interesting.

Stretch002,

IMO, definitely not time yet. Houses will continue to drop in this environment, just not as quickly as they would have. It will take awhile for the serious inflation to set in.

I would think the sweet spot would be this time next year, all things considered.

Disclaimer:: it's impossible to predict with the rules changing every week.

Office of Financial Stability, Ministry of Love, Ministry of Truth...

We need a list of all the reps who voted for the bill. We pick one or two of the most vulnerable and create a web site attacking them for this choice and demanding the voters votes them out this election. It would make headlines and put fear into most of them. I am serious about this. Who else wants to be part of this?

My key lesson from all this is that if you correctly predict how things will turn out (mass defaults) and bet on that position (cash on hand to buy), the powerful interests that lose will change the rules (banker bailout) such that they don't lose and you don't win after all.

But maybe it's possible to predict the rule changes as well.

We need a list of all the reps who voted for the bill. We pick one or two of the most vulnerable and create a web site attacking them for this choice and demanding the voters votes them out this election. It would make headlines and put fear into most of them. I am serious about this. Who else wants to be part of this?

They knew 99% of the public is against the theft, and they did it anyway. The bankers will support them with the stolen money, and the Reps will push the god, guns, and gays buttons, polished by expensive ad agencies, and the Reps will get re-elected by idiot America.

We had one shining moment of democracy this week, but that was the exception.

I think mortgage strike or tax strike would be more effective than anything we could do to Congress. Though if someone has a list of the Reps who betrayed America this time, I'm happy to post it again.

Someone please post the list!

@SP or OO
Time to implement the SP plan.

How safe are EverBank foreign currency CD's?

Yeah it is pretty sickening to have made the right predictions AND have endured the sacrifices necessary to get in good position just to have them change the rules.

Fuzzymath:
I am happy to hear you do not think inflation is going to be roaring anytime soon. That is my major concern: that hyperinflation happens and housing prices shoot through the roof and I am stuck renting forever...

I am wondering if mortgage rates stay this low in the next few months if it is a good time to go ahead and buy. I assume interest rates will be heading upwards (though with bad economic outlook & possible rate cut who knows?)...so it might be a good time to lock in a low rate even if the asset price is falling. If we eventually hit big time inflation then the house should stop losing value and my mortgage will be low comparitively speaking.

The sweet spot would be to get the lowest price on the house possible AND the lowest interest rate (unless they fall so far I can just pay cash - unlikely here in Southern California).

It is difficult to figure out what to do in this environment. I am not even confident my US$ shouldn't be swapped out for another currency...and yet as I say that the dollar is strengthening....

http://www.cnn.com/2008/POLITICS/10/03/california.loan/index.html

This is the future of America. We will go broke suddenly and we will all look at eachother and wonder where all the money went.

Stretch,

one of the main reasons inflation is bad is that it takes too long to get to the average person. If you had pure instantaneous inflation around the economy, there would be no change. The shit you buy would cost more, but you'd make more at your job too. It would all even out.

The problem is the money is created by the Fed and loaned to the government. From there, the government spends it on what they want (not what we want). The people they give that money to are the big winners, because they get the fresh money. Everything is still the same price, but they just got a bunch of money that didn't exist before.

By the time it gets to us as a wage increase, it's already too late. We've taken the hit, because we were paying higher prices for goods while not making more salary.

In this case, the money will go to the banks, who really aren't going to do one single productive thing with it. They've been insolvent for months, and this money is only going to get them back to break even. Essentially, it is replacing money that had already been destroyed in the bank/lending leverage transaction through all of the credit defaults going on.

However, the way the bill is termed, we can assume that the government will not stop at $700 billion. They will keep pumping money into the banks to replace the money that is being destroyed. This is in an attempt to stave off a deflationary spiral, and it's no surprise a student of the depression (Bernake) is at the center of this ploy.

Now look at what happened... there is real deflation going on... we're all losing money. However, the fed is now creating some and giving it to the banks. The way it works out, it's akin to a direct transfer of wealth from the people to the banks. We will continue to go broke, they will stay even keel.

At the same time, our government will go into more and more debt, until their credit rating goes down the shitter. At that point, foreign investment in the dollar will disappear, and THEN the dollar will officially be destroyed. Welcome to hyper-inflation.

This is obviously all conjecture on my part.

Thanks for the explanation of your views FUZZY - I really appreciate it.

Sounds to me that I need to watch what Japan & China do with their US$ reserves. If they start to sell off I need to buy something quick! From what I have read around the net they do not seem eager to unload so we should be okay...

Anyone else weigh in on this?

It's Friday afternoon at 3:24. Do you know where your United States Secretary of the Treasuy is?

Yes, the Suisse franc (CHF) is fiat currency - but of all the paper currency around, it has historically been the least debased of all major currencies.

By the way, I am not saying keep everything you have in CHF - but if it is money that is just going to _sit_, IMHO you are better off letting it sit in CHF than anything else. You probably also want to keep a decent chunk of it in precious metals, including physical. I think we are in a situation that portends a major dislocation - no idea where the USD, JPY, EUR or GBP are going to land at the end of this bust.

The downside is that this makes it more difficult to "play with stocks" and stuff like that, but if you are a "buy some BRK-A and wait" type of guy, moving it into a swiss account and buying equities from there works out. Even better if you aren't stuck with a US citizenship, because the Suisse report all your trades back here to prevent insider trading by schmucks like us (real insiders do just fine anyway).

You guys are not going to believe what the media is talking about. More Fiscal Stimulus.

Stretch002 Says:
Not to beat a dead horse here: is it FINALLY time to buy a house? If our currency is as doomed as some say, why not buy something with the currency while we can?

Probably one of the few asset classes that will do just as badly as USD will be US-RE. So, good luck with _all_ that.

This bailout does nothing for home prices, foreclosures or any of that crap - by tomorrow, the money will be already on its way to China.

Baltimore Says:
We need a list of all the reps who voted for the bill. We pick one or two of the most vulnerable and create a web site attacking them for this choice and demanding the voters votes them out this election. It would make headlines and put fear into most of them. I am serious about this. Who else wants to be part of this?

Where do I sign up?

Seriously.

You guys are not going to believe what the media is talking about. More Fiscal Stimulus.

Sounds about right to me, being that the DOW took a dump. That's what they all care about - the DOW.

The Original Bankster Says:
Baltimore, many people currently believe that the bailout was good and necessary measure.

You can thank the Main Stream Media propaganda machine for this. I am already volunteering some time and intellectual-property for an organization that is trying to break the oligopoly that controls public opinion.

Do everything you can to get the sheeple off the media and into credible blogs.

it might be a good time to lock in a low rate even if the asset price is falling

It makes mathematically more sense to wait for asset prices to fall first and buy when interest rates are higher. This assumes that you are what you say you are - a responsible saver with a decent down-payment, and not a howmuchamonth realtor.

Since someone asked - here is the vote roll call:

http://clerk.house.gov/evs/2008/roll681.xml

And for the record, I'm all on board with any future campaign to toss out all of the Yay voters.

Stretch002 Says:
Sounds to me that I need to watch what Japan & China do with their US$ reserves. If they start to sell off I need to buy something quick!

Seriously, are you a realtor?

When you say "buy something", I sure hope you are not suggesting taking all your liquid cash and exchanging it for an illiquid, non-income-producing "asset". If you believe hyper-inflation is coming, you are infinitely better off moving to the sidelines and parking everything you have in some other denomination (gold or even some less f*cked currency). The _last_ thing you want to be stuck with is an immovable pile of bricks that represents all your life's worth.

From what I have read around the net they do not seem eager to unload so we should be okay…

Don't be so sure. Part of the quid pro quo could have been that they will refrain from unloading their reserves as long as Paulson promises to get them a bailout at taxpayer's expense.

New Zealand has the Southern Alps.

slantedview Says:
That’s what they all care about - the DOW.

That's all the idiots you can see care about. Bonds are where the smartest traders are - the equity market is for the short-bus gang.

I am most definitely NOT a realtor. Search my name in google and read my other posts on Itulip, calculated risk, and Ben's blog and here on Patrick's site.

I am a guy who sold his house in 2006 and have been renting and saving. I am have a large amount of money in CD's and have been watching happily as prices moved in my favor. The last few weeks of economic news and blog posters screaming about "economy doomed" "USD is toast" and other stuff has me worried.

I am NOT a sophisticated investor and know nothing about putting money into foreign currencies or foreign banks. I am reluctant to buy PM's becuase of their surge and also do not wish to store them in my home. Given the governments willingness to change the rules as we go perhaps gold will not even be legal at some point.

So that said, it sounds like housing will continue to decline. It sounds as if the US$ will also continue to decline. Given that the housing decline is outpacing the $ decline then I should be okay...

Here's some food for thought:

John McCain's stump speech (as seen in Colorado today) includes a segment about energy independence, and he talks about how we send 700B out of the country every year to pay for foreign oil.

Stop and think about that for a moment. 700B for oil, versus 700B for Wall St bailout.

I say, when we bought oil, at least we got something for the 700B. And I'm not even a fan of
oil consumption.

I suppose I just want to be sure I am not left holding a bunch of worthless dollars when the smoke clears. Alternatively holding a bunch of metal that has lost its value, or holding some other countries worthless currency is also unappealing. Holding an illiquid chunk of stucco at least provides my family with some shelter...

When the music stops, I want to be sure I get a chair to sit in. I am ultimately wanting that "chair" to be a house. I want that house as cheaply as I can get it. So far sitting in the US$ chair has worked for me. I have begun to wonder if it will continue to work. If not, suggestions are MUCH appreciated.