It's now officially HousingPANIC Time (HPT), as the US Treasury Secretary admits that a significant real estate crash is underway and will not be going away soon.
But if one f*cking taxpayer dollar is spent bailing out housing gamblers and failed flippers, or the reckless lenders who made the stupid loans, then the government of the United States will no longer have the moral authority to govern.
Here's Paulson's housing mea culpa today, with some confused language regarding a bailout. "We should help" combined with "I have no interest in bailing out lenders or property speculators".
Walter - you can't have it both ways. Pull your head out of your ass and stay away from this mess.
Paulson: Aggressive Action Needed for Housing Crisis, Which Is 'Significant Risk' to Economy
WASHINGTON (AP) -- Treasury Secretary Henry Paulson called Tuesday for an aggressive response to deal with an unfolding housing crisis that he said presents a significant risk to the economy.
In the administration's most detailed reaction to the steepest housing slump in 16 years, Paulson said that government and the financial industry should provide immediate help for homeowners trying to refinance current mortgages before they reset at much higher rates.
"Let me be clear, despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant current risk to our economy," Paulson said in a speech delivered at Georgetown University's law school. "The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth."
"We must help as many able homeowners as possible stay in their homes," Paulson said. "Foreclosures are costly and painful for homeowners."
But Paulson also stated, "When investors are relieved of the cost of bad decisions, they are more likely to repeat their mistakes. I have no interest in bailing out lenders or property speculators."
49 comments:
Sorry if this was already reported, but I saw that last week the NAR president said:
"Despite some differences, the current market looks pretty good, when you compare home sales and prices to 2002 levels, which set a record at the time."
So if you wipe out the bubble to 2002, things look great!!
Well, well. Once more we are attempting to distinguish between lenders and speculators on the one hand and people who made stupid home buying decisions on the other.
It doesn't take a genius to figure out that a bailout of the latter is a de facto bailout ofthe former.
I guess the question is: what is Paulson's definition of an "able homeowner"? The answer would help illuminate just how much of a bailout he's talking about.
bailout is here
"Let me be clear, despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant current risk to our economy," Paulson said...
____
Ha ha!
Which strong economic fundamentals would those be?
Massive federal budget deficit - CHECK
Massive trade deficit - CHECK
Insanely expanding money supply (aka "creating money out of thin air) - CHECK
Crashing US dollar - CHECK
Price of oil spiraling upward - CHECK
Big banks losing their minds entirely...can't sell worthless asset-backed commercial paper but creating new vehicles to sell more asset-backed commercial paper - CHECK
Yup, strong economic fundamentals!!!
home "OWNERS" don't get foreclosed on like Paulson says.
Only home "DEBTORS"
Maybe a bailout isn't really a bailout when it applies to only to "able homeowners," as in "we reject the idea of a bailout, but recognize the neeed to help struggling homeowners".
That's what all this "no bailout" doublespeak bulls#!t is amounting to.
"We should help"
If by "we" he means all the people responsible for this mess- Greenspan, the lenders, the brokers, the Realtwhores, the specuvestors, the ignorant FB's, and finally, old Hank himself, then I am all for it.
That said, keep your damn hands out of my pockets!
Where's dopes now? Hoping Paulson's double speak really does mean a bailout no doubt! Humm!!
"But if one f*cking taxpayer dollar is spent bailing out housing gamblers and failed flippers, or the reckless lenders who made the stupid loans, then the government of the United States will no longer have the moral authority to govern."
IF???!!!
Have not significant government (taxpayer) resources already been allocated to those groups?
MORAL AUTHORITY TO GOVERN?
Is it not the POWER to GOVERN?
If one doesn't like the incentives
as a US citizen, what country provides better incentives?
Can you become a citizen of that country and get a work visa to work and live in the US without paying US taxes?
Here's a list of tax rates by country if you're thinking of renouncing your US citizenship
Not that you'll get to that point of course, but hey, worth a look
http://www.worldwide-tax.com/
Gotta love the new east european democracies going out with flat taxes (as it should be)
how are you going to help the family that earns 50k, who's mortgage application says they earn 150k, and bought a +700k home in CA?
How do you restructure that loan?
The housing cancer has run its course.. there is NO WAY the government can stop this runaway Ship of a mess. The market will work this out over the next decade
Can you say Recession....
I think they are finally seeing the whites of the eyes of the HUGE Housing Greed/Credit Monster....
Where is Angelo when you need him..
http://www.worldwide-tax.com/
Soon the United States will be the world leader ... not in technology, or wealth, or Nobel prizes, but the highest tax rates.
Thanks Hillary/Obama, and Medicare for all, 5K handouts, etc. Oh well the government 8-4:30 technocrats are smarter with your money than you are.
Let's see what really big government could do for us.
Let those Eastern Europeans worry about Mother Russia and blaze up freedom, loving the old US rhetoric about freedoms, personal responsiblity, and capitalism. They get a little and say CRANK THAT SHIT, while overfed effete Americans have given up.
home "OWNERS" don't get foreclosed on like Paulson says.
Only home "DEBTORS"
+1 on that. It's about time we update the dictionary and stop with this "OWNERS" crap. I think the NAR created that terminology.
Here's a list of tax rates by country if you're thinking of renouncing your US citizenship
And if you renounce you must pay the IRS for another 10 years after or you'll be extradited back and go to jail.
wow, not a big surprize if you love this and other H..bubble blogs, but jeeeezzz interesting to see that kind of press from the fed so soon. Its really gonna go downhill from now.....
DR Horton, the largest US homebuilder by sales, painted a grim picture of the housing market on Tuesday when it revealed that nearly half of its customers had cancelled on plans to buy homes in the three months to the end of September.
The surge in the company’s cancellation rate was complemented by a 39 per cent drop in sales to 6,734 homes, in spite of an aggressive program of incentives and price cutting. The dollar value of sales fell by 48 per cent.
pwnd
What? Move to a another country and still pay taxes to USA for 10yrs?? Can somebody with credible expertise in this matter (a tax attorney maybe) clarify??
No bailout - except my friends at GOLDMAN SACHS of course !!!
This was on the Front Page of the Seatle PI today, above the Fold, in the very center, in large type -- the lead story in "bubble proof" Seattle:
http://tinyurl.com/2eldp6
quote:
Home sellers trying it all to hook choosy buyers
Making properties stand out is key as market loses steam
By AUBREY COHEN
P-I REPORTER
Jennifer Nilssen wants to sell her Ballard condominium -- fast.
She set her asking price about $20,000 below that of comparable condos in her building. She's offering to finance 10 percent of the purchase price. She will give the buyer's agent a 4 percent commission -- up from the traditional 3 percent. And she'll even throw in the furniture.
"I just wanted to fire-sell it," Nilssen, an agent with TEC Real Estate, in Bellevue, said Thursday. "I'm not living there, so I've got two mortgage payments. And I thought about renting it out, but I'm not sure the rental market will support it."
The United States is the only country that taxes its citizens on their worldwide income regardless of where they live
They have tax treaties with some countries that have limits of income that are excused by the US when taxed by the local country, $82,400 is today's #. After that you're taxed by both countries.
If you renounce your citizenship, you no longer pay US taxes (unless your tax liability is over $124k a year and you have $2 million in worth, then it's 10 years), but either way you no longer have a US passport or protections (or liabilities) and you can never be a US citizen again
that we're even having this conversation should show you the sad state of affairs in the US today
bottom line - wouldn't recommend it. but do recommend leaving the US if you can for the experience, and be wise with your investments and income streams. And screw the US for being the only country on earth that taxes its citizens worldwide.
http://travel.state.gov/law/citizenship/citizenship_776.html
http://www.nytimes.com/2006/12/18/world/18expat.html?pagewanted=print
"Senator John Henry Eaton of Tennessee wanted a further restriction on the scope of the relief.14 He moved an amendment to restrict relief to the actual settlers only, thus withholding relief from the mere “speculators”...
Panic of 1819
http://www.mises.org/rothbard/panic1819.pdf
My favorite Paulson quote from the speech is: "This is not about finger-pointing; it is about putting an aggressive plan together and moving forward."
Right, God forbid he should point a finger at his friends on Wall Street who are guilty as hell. How about an agressive plan to investigate fraud.
"In addition to these general arguments against government interference with
contract, Allen hit hard at the speculation issue, which had been prominent in the
Senate debates. He declared that no group could be less deserving of relief than
the bulk of the public land purchasers. Allen, indeed, used the same set of facts
that had been employed by Thomas and Edwards to denounce rather than excuse
the debtors. He declared that the debtors had formed companies, had borrowed
heavily from the banks in order to buy public land, and thereby these speculators
had bid the land away from the actual settlers. The speculators had gone into debt
never intending to pay the price anyway, but only to sell them for a higher price
to others. Allen was sure that the actual settlers were a thrifty lot who did not run
into debt. In a later speech, Allen retorted that the advocates of the bill, in
pleading for the wretched and the poor, did not realize that the really poor never
bought land."
Panic of 1819
http://www.mises.org/rothbard/panic1819.pdf
The proponents of debtors’ relief argued that the legislature was obliged to provide relief in times of distress. Indeed, they considered themselves generous for not going so far as to repudiate all private debts completely.128 The opposition
assailed the measures as repudiating contracts, and asserted that the only remedies to help the debtors in the long run were thrift and industry. Stay laws were attacked as leaving the creditors’ property in the hands of speculators and as greatly hampering credit.129 The bitterness of the opposition increased as the relief system continued, and, as the economy recovered, it succeeded in turning the relief tide. As early as the 1822-23 session, the legislature reduced the stay provision from two years to one year, and by 1824 the stay laws were repealed.130 In the meanwhile, the decision of the state courts that the relief legislation was unconstitutional precipitated a vigorous and prolonged political controversy over the judiciary, the anti-reliefers finally winning by 1826.
Panic of 1819
http://www.mises.org/rothbard/panic1819.pdf
Five Fed Banks Opposed Half-Point Discount-Rate Cut (Update2)
By Craig Torres
Oct. 16 (Bloomberg) -- Five of the 12 regional Federal Reserve Bank boards opposed the central bank's decision to lower the charge for direct loans to banks by half a percentage point last month.
Four district banks voted to cut the discount lending rate by only a quarter point in early September, while the Philadelphia Fed wanted no change at all, minutes released in Washington today said.
The records show greater divisions among officials than indicated by last week's minutes of the Sept. 18 Federal Open Market Committee meeting. That report said ``all members'' judged a half-point reduction in the benchmark rate was ``most prudent.'' Presidents of at least three banks had expressed skepticism about a cut before the Sept. 18 meeting.
More at
http://tinyurl.com/2dqnpo
Without offering specific advice, what general areas of investment are advisable to weather this storm? In general, what does best in a collapsing monetary system with a corrupt government and falling real estate. It's too late for gold, so what else?
"able homeowners," ????
ABLE borrowers don't need subprime loans or ARM's. They can afford to make the payments on a fixed loan. They're not the ones in trouble now but even a lot of able homeowners will default if the value of the house drops much below what they owe and they decide it's a waste of money to keep making payments.
I don't think a bailout will have much affect. It doesn't matter what the terms of the loans are if the value of the house drops below the amount of the loan. And since down payments were done away with in recent years, most recent loans are or will be under water very soon. Even people who can afford the payments may walk away when the loan is 100K or more underwater.
If you think that it is "too late for gold", then you have yet to grok the price revolution that we are entering. Gold is going into the thousands. Oil well over a hundred.
remember when Greenspan, and "Bennie and the inkjets" said we hit bottom, we'd have a smooth landing? can you believe anything they say now? inflation at 2% - yeah right!
wake up and vote for Ron Paul. We have to stop going further into debt and we need sound money so the fed can't inflation tax us whenever they want.
Ron Paul 08
Absolutely outrageous. Now wonder 4000 are dead in Iraq. Yes, lets bailout the speculators "we have no interest in bailing out."
While you're at it how about throwing a few bucks to the responsible few that decided not to indulge in greed.
ABLE borrowers .... can afford to make the payments on a fixed loan. They're not the ones in trouble now... Even people who can afford the payments may walk away when the loan is 100K or more underwater.
Walk away and go where? Landlords check credit records these days, as do employers and almost everybody else. I'm not sure that it is a purely financial decision - most people are not in a hurry to trash their credit and abandon their home in one fell swoop. I bought in 11/2005, after fees and commisions I'd probably be a little underwater now, but I have fixed rate loans I can afford and I'm not planning on going anywhere.
I like the neighborhood, I'm close to the train.
The only useful information in what they say is that it gives you some insight into what they want the sheeple to believe.
Judge what they do.
Ignore what they say.
Our economy is BOOMING!
I mean it's doing fine...
I mean it's flat, but doing well...
I mean things could slow down...
I mean things are slowing down...
I mean things have slowed down...
I mean we are in a slowdown...
And, things could get worse...
I mean things are worse...
I mean things are extremily bad and getting worse...
That's all I have to say folks. Thank you and God bless America. Time to kill more Middle-Eastern citizens before they invade America by row boats!
G Dumbya Bush-co the on-the-run parinoid Neo-Clown Master and associated illegal profiteering and US industrial military complex crime regime members.
The destruction of America by our own elected (and non-elected)government officials and corporate associates.
The United States of America
1776 - 2007
RIP
><
If they want to keep people in their homes they better call up the national guard. The only way the FBs are gonna stay and pay is at gun point.
I'm with Bob, except 16 months later. I'm probably about even before realtor fees/etc. I'll be underwater a bit in the next 12 months before it stablizes. The panic is in full effect, so sheep should begun to flock over the next few months. If Ben doesn't raise rates back the .5%, hyperinflation will make my mortgage a joke within 5 years. So, barring deflation or a depression from hell, I should be set. :)
Bend over and grab 'em taxpayers, Uncle Sammy coming to the rescue. Both idiot parties will run as fast as they can to out pork the other on this issue ahead of the election. We are doomed.
Drink more, that's going to be my solution
But Paulson also stated, "When investors are relieved of the cost of bad decisions, they are more likely to repeat their mistakes. I have no interest in bailing out lenders or property speculators."
++++++++++++++++++
I CALL RED HERRING!
Paulson does not have to bail out the lenders, they have already gone under, well 166 or so according to implode-o-meter.
The Banks/Wall Street will be bailed out by Bernanke.
nuff said.
Don't forget Keith in the U.S.A you have State, Medicaid and SS. So while say Australia has a higher individual ederal tax rate, we have no Social Security, Medicaid and State Income Taxes. Beware of these comparisions--U.S.a. is a lot higher tax and cost than just federal income tax rates indicate....Its what happens when you have a country run by liars and lawyers.........
How do you save someone by tying them to an anchor and tossing them overboard? Let them default and cut the shackles of debt slavery.
Here's a list of tax rates by country if you're thinking of renouncing your US citizenship
Not that you'll get to that point of course, but hey, worth a look
http://www.worldwide-tax.com/
Gotta love the new east european democracies going out with flat taxes (as it should be)
------------------------------------
Where is that Aussie that tried to tell me that Australia has one of the lowest tax rates?! The usa is lower!
Come on Keith, you know a flat rate is regressive and an increasing rate based income is "progressive" ;). Damn fine marketing guy that sold that definition.
typical b.s. deny deny deny. then They change gears when best for Them
but either way you no longer have a US passport or protections (or liabilities) and you can never be a US citizen again
--
YAAAAAA RIGHT. Keith, if you have enough money you can come and go as you please AND have your cash stored off shore.
This is not a credit crisis. It's a VALUATION crisis!
fuck you paulson
but either way you no longer have a US passport or protections (or liabilities) and you can never be a US citizen again
A friend of mine is a US Citizen living in Auckland, NZ. He really carefully set things up in advance (Nevada corp paying him a limited income) and you need to plan like that to live abroad and not get taxed to death.
Walk away and go where? Landlords check credit records these days
Landlords have become EXTREMELY paranoid over this crash. I have 3 friends who own rental properties and all have been burnt to the point where they'll deny a lease due to one or two late credit card payments here and there. It's getting bad. Getting approved for a lease here in OC today is harder than getting a mortgage was 6 months ago.
In fact getting approved for a lease has been more stringent than getting a mortgage for the last 5 years. Approach any landlord, tell them you want a lease with no documentation and/or no income verification, and they will laugh you out of the room.
I honestly think a lot of today's desperate homedebtors "bought" because their credit and income was too crappy to rent but thanks to Countrywide and all the other scum they got approved to "buy."
anon @4:41
When I converted my US taxes to Australian taxes last year they came out within a few hundred dollars of each other. But that was ignoring the exchange rates...
I did:
My income in the US was US$X and my total taxes (ie. everything I lost to the IRS - Federal, State, City (I lived in NYC at the time), social security, and whatever else there was US$Y
Then I calculated how much tax I would pay on AU$X in australia which was AU$Z.
The US was slightly ahead - I paid slightly less in tax than the Australian numbers, but then again my US taxes were counted after my deductions . I didn't do rebates/deductions for the Australian one - just plugged the numbers into the tax rate and medicare tables...
If Ben doesn't raise rates back the .5%, hyperinflation will make my mortgage a joke within 5 years. So, barring deflation or a depression from hell, I should be set.
Ahh, I can't get enough of naiveté from home"onwers" who think that everything is rosier for them, that they are only a bit underwater, that their health insurance really covers them, that they have job security, that sh!t happens only to others...god bless America for the blind optimism and naiveté that keep electing so many crooks and incompetents into office.
Yep, you keep running that hamster wheel good because you're doing well and things will get better, home"owner" sheeple. Remember that if things get really bad, you can always ask for help from the bearded invisible man who lives in the sky. You know, that one who created that dude who lived alone amongst dinosaurs and had a chick made out of one of his ribs. Oh, and if you lose your house, you can always live inside a whale, just like Jonah did. Now, back to Hannity and Bill O'Reilly...
For the people trying to be an expat, you can get a Swiss citizenship if you have US$2 million liquid to deposit there. After that, just send your American passport back to Bush. No taxes there whatsoever, no head aches, no out of control immigration, and you can go anywhere with a Swiss passport, including the US, no questions asked. That's what I'm doing. Sorry folks, had enough of GOP crooks and this third world country marketed as superpower. You guys stay and be China, Saudi Arabia, Mexico, Wal-Mart, and GOP bitches.
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