June 21, 2007

FLASH: Treasury Secretary Paulson says housing crash over, everything fine. RELATED NEWS: Iraq war going great, US debt paid off, global warming over

I think it's entertaining to watch the worst Presidential administration in the history of the United States do their thing. They keep on shocking and surprising with their incompetence and mismanagement.

But at the same time, it's so sad. So very sad.

Folks, your leadership is clueless, incompetent, corrupt and negligent. This cozy little club lies with such ease, it's borderline psychopathic.

Here's Hank, trying to sell Americans a bill of goods. Note to Hank - they're not buying. And if you haven't read it, HP recommends Manias, Panics and Crashes. Idiot.

Paulson: Housing slump likely near end

WASHINGTON - The major slump in the housing market is nearing an end and should not have a significant impact on the overall economy, Treasury Secretary Henry Paulson said Wednesday.

Paulson refused to comment specifically on the market impact of troubles confronting two large Bear Stearns hedge funds that invested heavily in subprime mortgages — loans made to borrowers with spotty credit histories.

"We have had a major housing correction in this country," Paulson said in an interview with a small group of reporters at the Treasury Department. "I do believe we are at or near the bottom."

Paulson said he realized there would be losses along the way but said he believed those losses have been "largely contained."

"It doesn't pose a risk to the economy overall," he said.

60 comments:

Frank@NeverColdCall.com said...

As bad as it seems, that's part of their job, just like the FDR administration sent the press a bunch of propaganda about an economic recovery during the Depression. It was done to prevent panic and hysteria, and actually helped to keep people positive and pull out of the Depression.

The problem today is that the fundamentals aren't there. You can't spark a housing recovery by filling people full of hot air about how great everything is. No fundamentals = no recovery.

Never before has so much money been made on such weak fundamentals before this bubble/crash so it's gonna be a long way down still.

Anonymous said...

Paulson is trying to bluff the market into turning around.

He's more worried about overseas creditors believing the headlines leaking out (different from the rosiness painted by government figures) and potentially becoming weak-kneed and balking at U.S. Treasury auctions.

Anonymous said...

Why would someone ruin a distinguished career by working and lying for Bush?

Anonymous said...

The S&P/Case-Shiller Home Price Indices found that prices fell in the first quarter in 13 of the 20 metro areas the group studies, with prices down 1.4% nationally from March 2006.


My oh my prices fell 1.4%. What's the point of living anymore? After 100% rise, a 1.4% fall is like oh I dunno the end of the world.

Anonymous said...

What was that about 8% mortgage rates? OH MY GOD the rate is exactly where it was a year ago. Run for the hills everyone!

NEW YORK (CNNMoney.com) -- Mortgage rates eased slightly after taking their biggest jump in four years a week ago, Freddie Mac said Thursday.

The government-sponsored loan buyer said the average rate on a 30-year fixed-rate loan slipped to 6.69 percent for the week ending June 21, from 6.74 percent the previous week.

Last year at this time, 30-year mortgage rates averaged 6.71 percent.

keith said...

"After 100% rise, a 1.4% fall is like oh I dunno the end of the world."

The obviousness of your own statement should be, well, obvious

Desperate In DC said...

Official statements are calculated propaganda.

Whether to whip up the masses into a bloodlust frenzy to support a war or calm the herd nervously eyeing the exits:

#1 - Propaganda feeds delusion.
#2 - Delusion feeds denial.
#3 - Denial leads to disaster.
#4 - Disaster ends in despair.

Currently transitioning from #2 to #3.

Anonymous said...

What's he supposed to say, "Run for your lives!"? He's the friggin' Treasury Secretary, get a clue.

Anonymous said...

"I do believe we are at or near the bottom."


Prices are still astronomically high- there is simply no way we are at or near a bottom- sorry Mr. Paulson, but you are an asshole.

corvinus said...

And Bear Stearns' hedge funds, loaded up to the gills with subprime toxic waste, are going bust:

http://tinyurl.com/222lgv

No, there's no problem in the economy. None whatsoever! Pass me some more ramen and Kool-Aid!

Anonymous said...

"Why would someone ruin a distinguished career by working and lying for Bush?"

So true. With $700 million I could think of better ways to pass the time than turning tricks for the chimp.

g said...

"And Bear Stearns' hedge funds, loaded up to the gills with subprime toxic waste, are going bust:"

That's why he is coming out with these lies now. With the hedge fund implosion and possible repricing of hundreds of billions of junk paper, the massive amount of improperly hedged system risk built up in the financial system is suddenly evident to all the geniuses who built the house of cards in the first place. Why else would Morgan and Merrill first seize collateral, then decide to eat shit and not auction it off for pennies on the dollar after all?

It is obvious. Paulson and friends are DESPERATELY trying to avoid a MAJOR financial crisis here. If that means risking going down in history as an infamous lier, so be it, as long as friends and family can escape their positions in time and retire in style. Sickening.

Anonymous said...

The Twin Debacle - How the housing collapse is like the Iraq war.
(http://www.slate.com/id/2168417/nav/navoa)

"Even since the war went bad, the intellectual promoters of America's Iraq adventure, from Donald Rumsfeld on down, have been asserting that the faltering situation is stabilizing, and will improve soon—perhaps in six months or so. Six months later, progress having failed to materialize, they unironically repeat the same projection"
......
...
"In both Iraq and housing, folks who got us into the mess have repeatedly reassured the public that the debacle is contained, and that it is not contributing to instability and insecurity in adjacent areas. Both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson have promised that (a) the problems in housing are confined to the subprime market, with little contagion; and (b) the decline in housing activity isn't affecting the economy at large."

Mark in San Diego said...

Home prices may indeed be down only 1.8% in Grand Forks N.D. .. . but here in the real world (80% of the population - CA,FL,CO,AZ,NV,NY, etc. ) they are down anywhere from 10% to 30% already - then there is Sacramento, where auction prices at HALF of what homes sold for still don't sell!!!!

anon 6:05's mom fellates said...

But the people believe it.
Check out this story from cnn who, up until today, have been cheerleading the bubble.

http://tinyurl.com/2o5r3d

decaffeinated said...

Why would someone ruin a distinguished career by working and lying for Bush?

That's a question that really makes you stop and think, doesn't it?

Is it for love of country? C'mon, Paulson works on Wall St.

Is it for the ego trip? Maybe, but I would think that Paulson's previous gig as the head of Goldman Sachs provided more than enough gratification.

How about this...maybe it's just Paulson's turn in the barrel, so to speak. Maybe Paulson was selected by Wall St. to go down to DC and keep the hot money, minimalist-regulation machine running smoothly.

gekko said...

if people had a clue it would be obvious everything the bush administration says is the opposite. hence, "we're at the bottom" means "you're at the top"
he doesnt even explain what 'the bottom' is...the bottom of what? bubble, panic, bottom of the top?

Anonymous said...

yeah, ok, idiots!
He is wrong and you brainsugeons are right!
.
.
.
.
DOPES!
keep on renting.....HAHAHAHAHAHAHA!

Anonymous said...

Same goes for interest rates. Keith keeps squeeling about how they are going through the roof? Are you kidding? Even at 8%, it was not that long ago that 9% was a super-bargain-rate (1999? 2001?)

You wankers have nothing else to whine about? "OH MY GOD... house values are falling to zero and interest rates could hit high single digits again!"

Wankers.

Roccman said...

You will shit your pants!!!!

Bwhahahhahahahahahahah!!!

http://www.jibjab.com/view/125614

Anonymous said...

The best response to this insult to everyones economic sensibilties was on CNBC:

http://www.cnbc.com/id/19342644

Anonymous said...

did you liberals feel the same way about the nasdaq crash in that it was Slick Willie's fault? no of course not.

hypcorites

Anonymous said...

Why else would Morgan and Merrill first seize collateral, then decide to eat shit and not auction it off for pennies on the dollar after all?

Because Somebody Powerful Told Them To Stop The Auction If They Knew What Was Good For Them.

It could have been "cueball" Hank himself.

The reason is simple: everybody and their dog has these CDO's on their books. But NOBODY has an up-to-date- market price. An auction would certainly give a market price and a mark-to-market datum.

Somebody was scared shitless of this happening. Probably Merrill got some Very Important Calls from Very Weatlhy And Important People who threatened various things if Merrill went through.

Like, e.g. being cut off from the Big Fat Government Checks to come in The Mother of All Bailouts.

Actually trying to find the market clearing price is "treason" to this crowd.

It's like the honest nerd who gets beaten up because he was going to tell the teacher about all the students' cheating.

Anonymous said...

The S&P/Case-Shiller Home Price Indices found that prices fell in the first quarter in 13 of the 20 metro areas the group studies, with prices down 1.4% nationally from March 2006.

The Case-Shiller Home Index is flawed. If a house was bought in 2002 for 200k, then in 2005 it was worth 400k and if it was sold just today for 300k, the Case-Shiller Home Index would count it as 40% increase (0.8x50%), while there really was a 25% decrease from the top!

So, if the Case-Shiller Home Index is just starting to show some negative numbers, all it means is that the slump is already at full speed! According to other data, we are already 10% to 15% down from the top (not including foreclosures and builder incentives!)

i do believe > > > said...

In Bush/Cheney BS government code: "I Do Believe" means "there is no possible way in hell."

The bush criminal network is STILL loose on the streets? What a bunch of BS!

How long can they survive on lies after lies? Who will ever stop them?

Metroplexual said...

my question is does this make for a solid Democrat base for the next 20 years. The repugs have had the run of the WH with blips in between for quite awhile. Does the incopmpetency of GW and friends make the coming decades D friendly? I think so! so F bush and anyone who believes in him still, you all screwed the republican party. Nice job, you should once in a while question your leaders like dems did with Clinton, you got what you deserve.

Anonymous said...

two men headed for the gallows........

Anonymous said...

hey how did that shorting Chinese stocks go for everyone?

DOPES.

Anonymous said...

>>>"Even since the war went bad, the intellectual promoters of America's Iraq adventure, from Donald Rumsfeld on down, have been asserting that the faltering situation is stabilizing, and will improve soon—perhaps in six months or so. Six months later, progress having failed to materialize, they unironically repeat the same projection"<<<

seems like the war is on the back burner now.....and for good reason.........the surge is not working and we have had many more casualties than have been reported.

fliptards lose said...

Can the anonytroll please tell us which year national housing prices increased by 100%?

Anonymous said...

There's no problem with housing except for the 90% increase in foreclosures. Perhaps that says something about homes being too expensive and prices needing to drop?

Anonymous said...

It is unfortunate that the current administration is so delusional. These guys don't have an objective or honest bone in their bodies. Wouldn't it be nice if one day they gave a press conference... and nobody came.............

Anonymous said...

Nationally prices were down 1.7% plus 5% selling fees plus 4% closing costs plus 3% inflation

A seller loses 13.7% over a year.

Wow, the fees and costs associated with real estate can really add up. Can someone tell me when housing went up 100% nationally? Maybe it did over the past 15 years, but that's still well below the stock market or gold/silver. RE is the worst investment.

RJ said...

Anon said...
"My oh my prices fell 1.4%. What's the point of living anymore? After 100% rise, a 1.4% fall is like oh I dunno the end of the world."

I think this anon is the same author of all the posts that downplay the significance of the "correction" in housing. At least I hope so. Otherwise there are way too many ignorant people out there.

The credit market drove our so called recovery from 2002. Equity withrawal totalling well over one trillion dollars helped spur spending which supported GDP. For the sake of argument, let's say new orders for the major builders aren't down up to 30% YoY, and new mortgage applications aren't down near 20% YoY, and sales based on closings aren't down over 20% YoY - this economy now depends on asset appreciation to stay afloat. Without double digit appreciation in housing, the economy will do what it is now doing - contract. Real GDP is negative, not the 2.6 - 2.8% stated by the government.
Paulson and Co. are trying to keep the equity markets stable and bond yields under control. Ultimately fundamentals will catch up with the markets wiping out small investors, pensions, and retirement accounts. The timer on the hedge fund bomb is ticking.

In any case, time to start ignoring the uninformed and delusional. Prepare yourselves and your families for an economic meltdown.

burn baby burn said...

That was a close call! I am going to run out and buy a house this weekend hell maybe two since the government says everything is alright.

Anonymous said...

this is the mail lady, today the mail made me sad because the majority of the mail (return to sender) was foreclosure notices, reposessed cars, and bankruptcies. The reason I am saying this is because that great big 2 million foreclosures is looking like it is on it's way (if mail volumne means anything). Although people have to be notified with certified mail, people are ignoring certifieds because they know what it is. So the same companies are making sure they are sending regular mail and the saddest are the notices from the sheriff that post information on the envelope cover your house will be auctioned on a certain date, time, place so you can't miss it. Regular mail. In my five years of working this mail I swear it get's worse every week for the last few months. So do not believe that this thing is getting better. Also: didn't anyone hear the news, 2 hedge funds are poised to collapse and unemployment took an UNEXPECTED upwards surge. Judging the mail things are really bad, but people are still shopping? Don't believe it. There is no money to go shopping.

Anonymous said...

I think the correct term is "shocking and awing".

.

Bondo said...

Best follow up article in months from of all places the Wash Post
Mortgage Losses Push Hedge Funds to Brink
Thursday, June 21, 2007; Page D02
yes Virgina there really is a
"The President's Working Group on Financial Markets"
A second great article in the Wash post today also is
"Stocks Give Up Early Gains As Rising Treasury Yields Reignite Fear"

Anonymous said...

Isn't a 'correction' supposed to mean prices have dropped 20-30 percent or so ?

What correction - Edna just started singing her opening number.

BTW - Is Henry Paulson the great grandson of Irving Fisher ?

Anonymous said...

Real Estate is always a good investment:

Joe buys a condo in Ft Myers in 2005 for $320K

Joe's neighbor buys his condo in 2007 for $180K

Did Joe make a good investment? If the condos are worth $250K in 10 years, Joe's neighbor makes a 39% gain while Joe loses 22%

Add in the seller fees of 4-6 % and closing costs of another 4% and Joe takes it on the chin in real estate and his neighbor barely comes out ahead. Mutual funds beat real estate anyday.

devestment said...

The bottom is where you stop digging. It sounds like we are still digging to me.

SPECTRE of Deflation said...

Where to begin with the hallucinogenic comments of Mr. Paulson? Unless he has fairy dust for everybody, nobody is buying this sack of crap.

Wages are stagnant, savings are negative, we have wage inequality not seen since the Depression, housing is crashing, the ABX Market is about to blow, hedgies are closing shop because they made wrong way bets on CDO manure now being "marked to market", and the brokers and bankers are now in some WWF Smack Down with each other which tells you the stakes are huge.

This is just for starters Mr. Paulson. There are many more questions I could ask, but based on your performance, it's clear it's almost time for your next dose of fairy dust.

SPECTRE of Deflation said...

Keith, can you imagine having to stand there and deliver this load of crap while standing next to a President who thinks he's Mexico's Presidente'? I mean Paulson is no fool, and this is all about power and wealth for the elites while the rest can "eat cake".

I think Mr. Paulson has drunk the Kool-Aid of our dear friend David, real estate never goes down, Lereah. I didn't think anyone could lie like Dave, but damn if Paulson isn't giving it the ole' blue blood elitist try.

Anonymous said...

Hey you can't blame Bush he still thinks everybody is still dumb enough to vote for him again.

I realise the war in Iraq is bad New orleans is still a disaster. Also that the USA is a laughing stock for the rest of the world.

However give W credit for his war on the middle class is going great!!!

1 out of 4 ain't bad for a chimp.

Sequoia512

SPECTRE of Deflation said...

Anonymous said...
yeah, ok, idiots!
He is wrong and you brainsugeons are right!
.
.
.
.
DOPES!
keep on renting.....HAHAHAHAHAHAHA!

The really sad part is that with everything going on you are completely clueless. How does it feel to be as dumb as a brick?

dumb realtors dumb said...

There are some delusional morons out there who still believe everything the Bush Admmin says.

search warrants are not needed
we are winning in iraq
housing has bottomed
there is no inflation
jobs americans don't want to do
illegal immigration is good

SPECTRE of Deflation said...

Metroplexual said...
my question is does this make for a solid Democrat base for the next 20 years. The repugs have had the run of the WH with blips in between for quite awhile. Does the incopmpetency of GW and friends make the coming decades D friendly? I think so! so F bush and anyone who believes in him still, you all screwed the republican party. Nice job, you should once in a while question your leaders like dems did with Clinton, you got what you deserve.

As the Clinton's would say, "it's the elites stupid". How hard is it for people to understand that you are being fleeced by both Parties. It's the elites of both Parties VS everybody else. We better be damn quick learners of this fact before it's too late.

SPECTRE of Deflation said...

Anonymous said...
hey how did that shorting Chinese stocks go for everyone?

DOPES.

You come on a housing blog to ask about the SSEC? LOL! Moron!!

SPECTRE of Deflation said...

dumb realtors dumb said...

"jobs americans don't want to do"


One of my very favorite horseshit explanations from El Presidente', and one the Presidente' is now using. Jobs Americans won't do? It's not jobs Americans won't do, but jobs Americans won't do for the wages of illegals.

Econ 101 teaches the Law of Supply and Demand. What happens to wages when 12 to 20 million are added to the labor pool, and you only get one guess. It's no wonder wages have been stagnant for so long.

SPECTRE of Deflation said...

Anonymous said...
this is the mail lady, today the mail made me sad because the majority of the mail (return to sender) was foreclosure notices, reposessed cars, and bankruptcies. The reason I am saying this is because that great big 2 million foreclosures is looking like it is on it's way (if mail volumne means anything). Although people have to be notified with certified mail, people are ignoring certifieds because they know what it is. So the same companies are making sure they are sending regular mail and the saddest are the notices from the sheriff that post information on the envelope cover your house will be auctioned on a certain date, time, place so you can't miss it. Regular mail. In my five years of working this mail I swear it get's worse every week for the last few months. So do not believe that this thing is getting better. Also: didn't anyone hear the news, 2 hedge funds are poised to collapse and unemployment took an UNEXPECTED upwards surge. Judging the mail things are really bad, but people are still shopping? Don't believe it. There is no money to go shopping.

Thanks for sharing this. Very informative!

SPECTRE of Deflation said...

Anonymous said...
Real Estate is always a good investment:

Joe buys a condo in Ft Myers in 2005 for $320K

Joe's neighbor buys his condo in 2007 for $180K

Did Joe make a good investment? If the condos are worth $250K in 10 years, Joe's neighbor makes a 39% gain while Joe loses 22%

Add in the seller fees of 4-6 % and closing costs of another 4% and Joe takes it on the chin in real estate and his neighbor barely comes out ahead. Mutual funds beat real estate anyday.

It's gonna leave a mark!

Anonymous said...

Real Estate is the best investment for most people because it's simple.

To borrow 400K when you make only 100K per year before taxes to purchase real estate is plain stupid.

All the real estate I purchase is at around 60/40 LTV max.

Anonymous said...

Ano: "Real Estate is always a good investment:"

Check out this video: www.msnbc.msn.com/id/11843382/

Jambu said...

Can someone tell me when housing went up 100% nationally? Maybe it did over the past 15 years,

No. Not even close.

National Median Home Price:

1970: $23,400
1980: $64,600
1990: $122,900
2000: $169,000
2006: $213,900

1970 to 1980 up 176%
1980 to 1990 up 90%

When compared to those rates of growth, 2000 to 2006 is really not that much at 26%. Aside for a couple of places that went nuts, ie Phoenix, Las Vegas, Miami, real estate in the 2000s was pretty dull compared to previous decades.

Stephen said...

"How does it feel to be as dumb as a brick?"
---------------------------------
It's "thick as a brick." Get some culture, you turd niblet.

flipturds said...

The true dopes are happily feasting on the manure coming from the Bush cronies and NAR. They think it's caviar.

how will those letuce pickers afford the $700K house now that it's no longer appreciating at a higher rate then their option ARM?

Anonymous said...

"My oh my prices fell 1.4%. What's the point of living anymore? After 100% rise, a 1.4% fall is like oh I dunno the end of the world."

Time for you to buy a bunch of properties and put all your money in REITS. Are you all talk? Man, these trolls must be bleeding...

Anonymous said...

"But the people believe it.
Check out this story from cnn who, up until today, have been cheerleading the bubble.

http://tinyurl.com/2o5r3d"

Good article. Yeah man, that poll shows that the sheeple always will be sheeple. And they will vote Giuliana into office. This country is going down fast.

Anonymous said...

Ha ha ha ha. Ha ha ha ha ha ha. Ha ha ha. Oh god, ha ha ha ha ha ha.

james dean said...

Love the trolls who assume every current homeowner bought in pre-2000 and whose counter arguments compare local bubble-market price appreciation with national price declines. Love it. Apples and oranges anyone?