August 31, 2007

Will Bernanke cut rates to bail out mortgage gamblers?

Two words Ben: Moral Hazard.

The Fed chairman made it clear that there would be no rate cuts simply to bail out investors, declaring "it is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions."

30 comments:

Anonymous said...

AH.....


But it's solid gold to act like you're helping the little guy when you're really bailing out Goldman Sachs and Bear Stearns for their poor decision making.

Remember, investment banks have one of their own, Hank Paulson, in charge of the treasury... what a coup that is!

SPECTRE of Deflation said...

If they do the bailout, let's all decide not to pay our federal taxes. I don't understand the instructions, plus I took a vacation, bought a second home, bought a boat, bought some Sea- doos, and how am I supposed to pay taxes after all that Mr. President?

Anonymous said...

Fed Funds rate will not be cut in Sept.

Bernanke is not Greenspan. The Fed is fully aware of the spot it caught in.

It will choose resession before creating Armegaddon on the U.S. dollar.

Congress and Exec branch will talk a story on helping foreclosure losers. But even the Fed gov't can not stop the law of gravity.

They real goal is not to stop the fall of real estate. It is to avoid a violent, sudden crash. They want an orderly fall in real estate because it has to happen.

And it will. It will simply take more a bit time. It will go not in a bang, but in a whimper.

BTW Keith, BRIC-PANIC is still a go!! Just wait until these "Emerging Markets" tumble!!!

Anonymous said...

Bailout is here guys, unless hp'ers stand in line and picket its going to happen. Now lets see all you hp'ers stand in line and picket for what you believe. Its time to put up or shut up or fade away!

howard said...

told you that the bailout was coming. how's that rental?

Anonymous said...

I fear the government will put the US taxpayer in a rape stand similiar to what Michael Vick did to Pit Bulls.

I believe a real estate crash is much better than a prolonged slow march down in prices. How about prices decline by the hour just like they increased by the hour in some F%#$ed places?

Lord-of-deflation said...

The Fed's private owners will want to save the dollar. They couldn't care less about your money problems.

Anonymous said...

Uh Howard my rent is still lower than my mortgage would be by half. Plus no maintainence and I can move without a 30000 sign in my yard. At the time of my choosing. My money I save goes into my 401K. I call it my money because unlike fake home equity I own mine. Your mortgage company owns you till you make your last payment.

Sequoia512

Anonymous said...

Listen bud until the check is in the mail they have not bailed out squat, so dont get to smug yet.

Joon said...

Protest by refusing to pay taxes!

k.w. - southern ca. said...

Even if there is a bail-out, it will come far too late for those house debters deep in dept who are now struggling month-by-month to meet their monthly mortgage payments.

A massive number of ARM's start resetting next month.

Anonymous said...

buy gold

HauspocalypseNow said...

Bailout will be about as effective as 'sweeping bathroom stall behavior reform laws' would be.

kilgore said...

He says all hte right things but if you've ever watched him talk, he looks like a deer caught in headlights.

If Bernake cuts rates the dollar will plummet - which may be the plan. Cause how else are we going to pay off all this debt, with REAL dollars?????????

Anonymous said...

Geee Bernanke, you affirmed 3 weeks ago that the subprime mess was CONTAINED. So you were lying all along.

Why should anyone believe a word that comes out of Bernanke's mouth?

That goes to you also, Paulson. Bunch of liars who are destroying the country!

whitetower said...

Notice how the interviewer gets agitated when the economics professor being interviewed suggests that sub-prime and toxic loan lenders made "stupid" investments and shouldn't be bailed out with rate cuts:

http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vOOuDOnnHskA.asf

Anonymous said...

THE MESSAGE FROM THE WHITE HOUSE, CONGRESS, SENATE, AND FED:

IT PAYS TO BE A CRIMINAL IN AMERICA.

Anonymous said...

Out of 2 million ARM reset, perhaps only 240,000 might be helped. I doubt if many of those will qualify. Anyone who HELOC'd will not qualify. Anyone who cannot afford 6.5% 30-year fixed cannot qualify. All income must be fully stated. This is just a token gesture and much ado about nothing

Anonymous said...

Remember, the U.S. govt also bailed out and helped the Katrina hurricane 'victims'.

The Feds promised the world, and has delivered pennies on the dollar in real aid.

Same will happen for real estate foreclosure bag holders.

Feds = full of sound and fury signifying nothing.

SeattleMoose said...

Housing is toast.....now it is just a matter of whether the dollar joins housing.

FED won't let both go...and there is still at least some small hope left for the dollar.

Anonymous said...

It doesn't matter what Ben does at this point (IMHO). From where I see things, a Fed rate cut or Bush backed "bailout, bootstrap, boondogle plan for asshats" is about like building a little sand castle on the beach just before high tide comes in and washes it out to sea. The "market" is a lot bigger than the sum total of all of these idiots' ideas and they know it.

Hey Keith, got pre-paid debit ready? Wells Fargo loves to silently fund check into cash outlets and pawn shops - Buffet's one of WF's biggest share holders. The demand side of the equation is building momentum.

Smug Bastard

Owner Earnings said...

Why would anyone pay their mortgage now? Just wait 90 days and get a new one from the government.

DAGG said...

he doesn't have to balls to not cut rate

smitty said...

I guess that I don't care... it's still more expensive to live in a house than rent. it's not like bush is offering to cut local taxes or the principle owed. unless salaries go up, the "home owners" will probably still loose principle unless the "next generation" of buyers have enough money to support the market's market cap and the "home owners" will probably take out home equity loans and get f**cked.

Anonymous said...

Fed funds rate will stay where it is for some time to come.

Bernanke knows FBs are already under water and no bailout is going to bring back trillions of home values.

He also knows he has the boomers beginning to retire 1/1/08 and the last thing the economy needs is inflated medical and consumer costs for the retirees.

We are only in the previews. A new fresh batch of popcorn will be served in the lobby on September 18th when the stock market finally realizes it's over. Enjoy the popcorn! What a great show! I am confident we will all make the closing credits.

Anonymous said...

M3 is going parabolic

http://www.nowandfutures.com/key_stats.html

Inflation is coming boys and girls. Got gold?

Anonymous said...

Get hedged with oil. The world runs on oil, not gold.

Anonymous said...

sure the house prices will fall but it will take 15 years or more to hit bottom, and thats a lot of orchard planting time and time for its maturity.....

Anonymous said...

oil at 8 times the price it was 7 years back, and the paid for govt says their was no price fixing, so it must be cheap>.

Anonymous said...

Nah....no cut. Bennie-haha is too worried that the hyper-devalued dollar that a cut would cause would lead our Asian treasury buyers to go elsewhere, and our civil service miscreants would get an I.O.U. on payday when the government is forced to shut down.