December 01, 2007

HousingPANIC Quote of the Day (and a special HP note to all homedebtors)

"If you are a borrower in the group that gets left behind by this scheme, you have a set of perverse incentives to default in order to get the break. It has moral hazard written all over it"

- Don Brownstein, chief executive of Structured Portfolio Management hedge fund

___________________

** Special HP note to all underwater homedebtors -
STOP MAKING PAYMENTS ON YOUR DEPRECIATING DEBT-TRAP TODAY!!!


The failing banks and Bush Administration will reward those who've committed mortgage fraud, and that don't honor their loan commitments. On the flip side, they'll screw honest homedebtors who didn't commit fraud, and who keep making their house payments.

Black is now white, cats are now sleeping with dogs, and that's the world we live in.

___________________

64 comments:

Anonymous said...

TOLD YOU ALL!!!!!
.
.
.
THANKS FOR THE HOUSE!!!!!
.
.
.
HAHAHAHAHA!!!!!
.
.
.
DOPES!

Edgar said...

I really feel sorry for the hedge fund maggots. [/sarcasm]

Anonymous said...

Wouldn't this scheme further destroy the value of CDO's and lock up the credit markets? If I'm an Asian or European investor who bought a US bond expecting 10% and end up with 4%, that could lead to some lawsuits forcing the bond originator to buy back their bond at full price. The foreign courts are not going to protect Wall Street's interests.

Lee said...

Yes, this is going to eviscerate the lower Tranches of the CDO's and CLO's.

This has massive, unintended consequences written all over it.

Anonymous said...

IF this went through wouldn't the forgiven interest qualify as income that would be taxed?

Anonymous said...

Damn, I would love to purchase a home right now, get some cash back, plow that into precious metals and bury it, then pull a first payment default and live rent free for a year. This is not going to end well.

bickerer said...

Reality of politics. Bush must do something, anything, or the dems will be on it like stink on shit.

Anonymous said...

Once again HPers are on the losing end. Too bad so sad.

Anonymous said...

This will donothing of he sort anaon 6:56. The federal govt will be making up the 6% difference. If anything those 10% bonds have become the safest investment out there. They are like 0 risk t-bonds but with twice the return.

Anonymous said...

If you are going to play around with payment defaults hoping for a deal here:
Be careful - be sure you know the exact regulations and be sure your lender is still following them - this deal, whatever it is, may not last and may not apply to you.

Anonymous said...

"Black is now white, cats are now sleeping with dogs, and that's the world we live in."

My dog and my cat always sleep together on their bed. They have been for years since they were a puppy/kitten.

What's so odd about that?

FMW said...

"If you are a borrower in the group that gets left behind by this scheme, you have a set of perverse incentives to default in order to get the break. It has moral hazard written all over it"
--------
That is a really good idea!
Should I wait till the law is passed?
I am locked in at 7% for 30 years.
How low would my new rate be I wonder.

Maria's boy toy said...

Keith, here is your HP quote of the day:

""This is the first time that the Bush administration is working toward a solution that meets the magnitude of the problem," Sen. Charles E. Schumer (D-N.Y.) said. "But there is a $64,000 question: Will investors go along with this plan? And if not, can they be compelled to?"",

Compelled to? Investors fu_king-A compelled to ! Is this finally an admission that the Federal government is considering open, active controls on financial markets? We know the PPT has been busy, but this is the shits. Game over man. I'm making plans to leave in early '08.

Anyone who still believes in the fairy tale of free and efficient markets is a DOPE!

http://tinyurl.com/yvurgc

Anonymous said...

Not shocking:

PRINCETON, NJ — Republicans are significantly more likely than Democrats or independents to rate their mental health as excellent, according to data from the last four November Gallup Health and Healthcare polls. Fifty-eight percent of Republicans report having excellent mental health, compared to 43% of independents and 38% of Democrats. This relationship between party identification and reports of excellent mental health persists even within categories of income, age, gender, church attendance, and education.

Anonymous said...

anon @8:21,

Does that mean Republicans are less likely to have less than excellent mental health? Or does it mean they are more likely to be delusional and think they're mental health is excellent? Or more likely to lie about it?

Anonymous said...

Lee said...

"The federal govt will be making up the 6% difference."

If that is the case, then the Federal Budget Deficit just jumped by a few Trillion Dollars as the U.S. takes on trillions in mortgages as T-Bill spreads.

What a Fiasco.

abb said...

The originating banks don't own the loans anymore.

So the only way they could do this is if the govt bought up all the housing CDOs/derivatives and forgave the interest.

This is political posturing, and possibly paving the way for RTC II.

Anonymous said...

"Republicans are significantly more likely than Democrats or independents to rate their mental health as excellent"

it's easy to be happy when you're crazy.

Anonymous said...

"And if not, can they be compelled to?""

it's wrong to do that. what are we coming to? that's not a way to attract the 2-3 billion a day we need.

borkafatty said...

"TOLD YOU SO"

borkafatty said...

OT: This is for the George Bush cheerleaders....Yup great accomplishments..Just great...

Got Soup!

http://www.bestcyrano.org/THOMASPAINE/?p=459#more-459

Anonymous said...


or the dems will be on it like stink on shit.


Save our homes from the greedy white mens

Anonymous said...

Investors fu_king-A compelled to ! Is this finally an admission that the Federal government is considering open, active controls on financial markets?

This will cause a Great Depression II as hundreds of billions in foreign and dmoestic funds flee the USA in search of safer havens. This is the same thing Chavez did in Venezuela. Contracts were signed with foreign companies and investors and Chavez ripped up to contracts and created new ones more favorable to local interests. The US government threw a big stink over it and now they are trying to do the same.

Anonymous said...

The federal govt will be making up the 6% difference.

Keep dreaming. That would a few hundred billion a year. It would be 10x bigger than the S&L bailout. The investors will be screwed.

Roccman said...

Bwhahahahahahahahahahahhaha!!!

NEW YORK, Aug 30 (Reuters) - Lehman Brothers has hired Jeb Bush, brother of the President of the United States, as an advisor to its private equity business, a source familiar with the situation said.

Lehman hired another relative of U.S. President George W. Bush last year--George Walker, a second cousin, who heads up the bank's asset management business.

Jeb Bush is the former governor of Florida.

Lehman Brothers declined to comment.

raynla said...

Anonymous said...
TOLD YOU ALL!!!!!
.
.
.
THANKS FOR THE HOUSE!!!!!
.
.
.
HAHAHAHAHA!!!!!
.
.
.
DOPES!
___________________________________

Keith a few weeks ago you asked "where is dopes".

Well... he's alive.


Raynla

Anonymous said...

TOLD YOU ALL!!!!!
.
.
.
THANKS FOR THE HOUSE!!!!!
.
.
.
HAHAHAHAHA!!!!!
.
.
.
DOPES!
---------------------

FU#K YOU DREAMER!

Anonymous said...

do people really want the house they are in now if prices aren't rising 10-20% a year?

I would think most would opt for getting out of a bad gamble altogether rather than continuing to make payments even at a lower rate

Anonymous said...

I bought a nice 2000 square foot townhouse for 775K in 2004. I only put down 3% and I received a hybrid loan that consisted of fixed, interest only, and negative amortization loan. My loan was to reset in August 2007. You know what I did? I told my lender to drop dead and told them I don't have the money. Right now I am behind on my payments and I know I am on the driver seat because I have my bank by their balls ans I am loving every minute of it. My townhouse is probably worth 500K and still going down in value. Do you really think my bank will want this asset that is falling in value? I don't think so. For those of you folks who are part of the pessimistic "the world financial system will collapse and I am hoarding all of my gold", I have this to say to you: you are stupid and a dope. I will win and you will lose. So who is the real loser?

Anonymous said...

All of you HP'ers are idiots. Big time. You kept saying the market was overvalued. Yes it was. But I knew in the end that the government and the banks would NOT allow a financial collapse. Thus even though I lived beyond my means and you HP'ers didn't, YOU will end up paying for my extravagant lifestyle!

Anonymous said...



Not shocking:

PRINCETON, NJ — Republicans are significantly more likely than Democrats or independents to rate their mental health as excellent, according to data from the last four November Gallup Health and Healthcare polls. Fifty-eight percent of Republicans report having excellent mental health, compared to 43% of independents and 38% of Democrats. This relationship between party identification and reports of excellent mental health persists even within categories of income, age, gender, church attendance, and education.


Yeah this shows how deluded republicans are, since this study has them RATING THEIR OWN MENTAL HEALTH!!!!


it would be neato to compare thath with their actual mental problems and get a "republican delusion" rating vs. democrats, independents, etc

FlyingMonkeyWarrior said...

Check the FDIC rate foryour bank.Is it sound or in trouble?Found the free link for US Banks.


http://www.bankrate.com/brm/safesound/
ss_home.asp

Anonymous said...

Anon 8:21:

You mean Democrats are nuts? No! Really?

shakster said...

I wrote about this last year-
http://www.globalresearch.ca/index.php?context=va&aid=7413

A lone judge with stones agrees.
Turn in your keys,and these conniving banks/brokers will be lined up at your doorstep.Please buy the house whaaaaaaaaaaaaaaaaaaaaa.
Don't do it,Rent,and be happy.

Natural Eyebrows said...

I agree the bondholders are the question. There are so many of them, I don't know how Paulson & Co. could put together a "coalition" like his coalition of bankers.

This reminds me of the late 70's when NYC, facing insolvency, unilaterally extended the due dates on its muncipal bonds as they came due, because the city knew they couldn't roll the bonds over in the market. The big guys went along, but little Flushing National Bank wouldn't accept this treatment and demanded their cash. They sued and won.

Look for some maverick bondholder to sue a major bank if this gets enacted.

Anonymous said...

Who cares? The banks and junk bond investors get burned. Would you rather go with the DemoRats plan of dumping all those loans on Fannie Mae and Freddie Mac and letting the taxpayers get burned? This will only serve to further destroy the US mortgage market as investors will not trust American bond covenants anymore. UpChuck Schumer's plan to have taxpayers subsidize $1 million homes is in the toilet with Freddie and Fannie's troubles. This is like a guy falling off a building and opening an umbrella to slow the fall.

Anonymous said...


THANKS FOR THE HOUSE!!!!!
.
.
.
HAHAHAHAHA!!!!!
.
.
.
DOPES!


Thank the banks. We'll see if they can enforce their plan when thousands of investors start filing lawsuits for breach of contract. We'll find out what the Asians and Europeans do when they find out that investing in the US is less safe than investing in Venezuela or Zimbabwe

Anonymous said...

This has massive, unintended consequences written all over it.

That qualifies as a government program. Let's go with it!

Lady Di said...

anonymous said:

I bought a nice 2000 square foot townhouse for 775K in 2004. I only put down 3% and I received a hybrid loan that consisted of fixed, interest only, and negative amortization loan. My loan was to reset in August 2007. You know what I did? I told my lender to drop dead and told them I don't have the money. Right now I am behind on my payments and I know I am on the driver seat because I have my bank by their balls ans I am loving every minute of it. My townhouse is probably worth 500K and still going down in value. Do you really think my bank will want this asset that is falling in value? I don't think so. For those of you folks who are part of the pessimistic "the world financial system will collapse and I am hoarding all of my gold", I have this to say to you: you are stupid and a dope. I will win and you will lose. So who is the real loser?


Sorry, but it doesn't work that way. You'll be tossed out of your house in a matter of months. Your credit will be destroyed, and the IRS will be after you for the cancelled lender debt. With your pathetic credit, good luck trying to rent a place. Oh, and if you ever find yourself in the employment market, you're toast.

Just a little reality check for you, Loser!

Anonymous said...

Anonymous said...


THANKS FOR THE HOUSE!!!!!
.
.
.
HAHAHAHAHA!!!!!
.
.
.
DOPES!


Thank the banks. We'll see if they can enforce their plan when thousands of investors start filing lawsuits for breach of contract. We'll find out what the Asians and Europeans do when they find out that investing in the US is less safe than investing in Venezuela or Zimbabwe

December 02, 2007 3:08 AM

Asians and Europeans will always invest in the U.S.A. because we are the largest economy in the world. We are the locomotive of the world economy. If we catch a sneeze, then they catch the flu. So they will always give us capital. Otherwise, they will hurt themselves. Don't you love it thought? We Americans live a good life while those idiot Europeans and Asians save, save, save and send it to us, so we can spend, spend, spend. I love it.

Anonymous said...

The Federal safety net being suggested absurd. I expect that once the dust settles the good will and full faith and credit once assumed by US Banking officials will totally disappear. Not only will our fiat currency become mere paper, but the bonds that suggest a defined rate of return over the term will be worthless. Lets see what the rating agncies that lied and worked both sides of their ratings racket state the value of a bond that really has no legal certainty.

Lies upon lies (paper dollars and papaer IOUS as CDO backed instruments) instead of real wealth are the hallmark of a dead economic system.

stoppayingthebanks said...

Lee said "Yes, this is going to eviscerate the lower Tranches of the CDO's and CLO's."

I don't think that will matter cuz the banks know those CDOs are already toast.

Anonymous said...

Sorry, but it doesn't work that way. You'll be tossed out of your house in a matter of months. Your credit will be destroyed, and the IRS will be after you for the cancelled lender debt. With your pathetic credit, good luck trying to rent a place. Oh, and if you ever find yourself in the employment market, you're toast.

Just a little reality check for you, Loser!

December 02, 2007 5:22 AM

===========================
Dont get riled that was just another "populist boob" angry at what he perceives to be a government bailout. So he decided to bait y'all with this story.

PS- I do love to read all the foolish people who really think they have a plan to survive this bust.They have no idea what this housing collapse really represents. Over 40 years of de industrialization, major declines in net physical output. This country has been operating below breakeven for decades now.

The biggest threat we face as a nation is the current US culture. It is absolutely the worst culture in American history. There has never been such a degenerate and stupid population as we have today.

Anonymous said...

Anonymous said...

The federal govt will be making up the 6% difference.

Keep dreaming. That would a few hundred billion a year. It would be 10x bigger than the S&L bailout. The investors will be screwed.

December 01, 2007 10:41 PM

=============

Asshole, it is called a BAILOUT for a reason. Put the crack pipe down and try thinking.

Anonymous said...

orry, but it doesn't work that way. You'll be tossed out of your house in a matter of months. Your credit will be destroyed, and the IRS will be after you for the cancelled lender debt.

==

You should watch the news more. The IRS is no longer collecting taxes on forgiven mortgage debt. Thanks to your pals the Democrats who in order to "help homeowners" did away with that a few months ago.

Keep voting Democrats everyone and all will be well, I promise. As soon as Hillary/Obama takes office all you HPers will get houses for $25.

Anonymous said...

"There has never been such a degenerate and stupid population as there is today".
Right! They are so dependent on fast food, etc. Most can't even cook a potato.
What will happen if this economy crashes? They will murder each other for a happy meal.
I never saw so many dumb people in my life. But I will say this, our generation is responsible for this situation. We did this to ourselves by working constantly and not raising kids properly. Abandoning church, community and culture for a bag of sand with a hole in the bottom.
Now a generation of murderers has been raised. Barbarians who will sack the USA and burn everything in the name of nothing.
The rich won't escape this one. They will be brought out like the French Revolution and hung. Believe me, this is going to be the worst nightmare you can imagine. I expect National Socialism, with elimination of the elderly and handicapped in the end. If they can organize. Otherwise, a total collapse Europe in the Dark Ages.

Anonymous said...

This "bailout" is just an election year ruse....maybe some will benefit, but most will not and it will take too much to implement. It's a lot of talk - but I am concerned about it "eviscreating the lower tranches" can someone explain...

Lady Di said...

You should watch the news more. The IRS is no longer collecting taxes on forgiven mortgage debt. Thanks to your pals the Democrats who in order to "help homeowners" did away with that a few months ago.

----------------------------------

Sorry, wishful thinking. Some bills have been turned over to the Senate Re: cancelled debt, but nothing has been done with them. Don't expect it to be either.

Those cancelled debt "1099's" are alive and well.

Either way you look at it, the piper will need to be paid.

stuckinthecity said...

from MSNBC:

By offering a broad approach to extend the teaser rates for a certain period — officials and the industry are debating time periods of two to five years — it would allow between homeowners to keep making payments while the housing industry regains its footing.

-----------

How can one regain their footing when soem one keeps giving you a lazy boy recliner to sit on??

Anonymous said...

You assholes are too stupid. There won't be a government bailout. The only bailout is the lower FFR and the SEC/FDIC being lenient on the banks balance sheets. There are so many delusional conspiracy nuts that you'd think this was the DailyKooks website.

retired banker said...

"How can one [& the banks] regain their footing when soem one keeps giving you a lazy boy recliner to sit on??"

Helping the homeowners is just a cover story. The real plan is to bail out the banks by allowing them five more years of huge profits to wash this crap off their balance sheets. The Fed will lower the discount rate 200 bp and this will permit Citi, JPMC, BoA, etc., to earn some serious cash from a carry trade. The banks will still have to write of a couple hundred billion +/-, but they will survive.

The USD & sub-prime home owners? Who cares, they are expendable. China and Japan have the gun to their heads too, and the ECB had better go along or they will also be toast. The losers will be American taxpayers and anyone living on a fixed income. Inflation will clean their clock over the next 5-10 years.

rick J said...

Bernanke and Paulson are looking at a five-story house of cards, and dabbing super glue here and there to try and hold it all together. One false move and it's aw sh_t! time.

Just a side note for those who think the feds are late to the party. DHS started a new program last month using ICE officers. They are now questioning people leaving the U.S. via small aircraft and charter airlines. IMO this is the first step in emigration control. Your very ability to leave the U.S. will soon be subject to some bureaucrat and his computer database.

Land of the free, home of the brave...

Beignet said...

We did this to ourselves by working constantly and not raising kids properly. Abandoning church, community and culture for a bag of sand with a hole in the bottom.
Now a generation of murderers has been raised. Barbarians who will sack the USA and burn everything in the name of nothing.
The rich won't escape this one. They will be brought out like the French Revolution and hung. Believe me, this is going to be the worst nightmare you can imagine. I expect National Socialism, with elimination of the elderly and handicapped in the end. If they can organize. Otherwise, a total collapse Europe in the Dark Ages.
~~~~~~~~~~~~~~~~~

You have nailed it on the head.

******Read Follett's "Pillars of the Earth" *************** On the bestseller list now.

Do we move to Canada or just raise chickens in the back yard?

Anonymous said...

anon 1:57 pm said
Otherwise, a total collapse Europe in the Dark Ages.
-------------------------
"DARK AGES"? aren't we already in the DARK AGES with "dark" Mexicans invading the US and "dark" muslims invading Europe?

bob said...

"** Special HP note to all underwater homedebtors -
STOP MAKING PAYMENTS ON YOUR DEPRECIATING DEBT-TRAP TODAY!!! " - Keith

Right, even though I've got fixed rate loans I can afford, I should ruin my life and my credit record based on *your* advice based on some gov't program that may or may not happen in some form that may or may not resemble what is being written.

Although you've been right on the big point, sometimes you just sound stupid.

bob said...

Wouldn't this scheme further destroy the value of CDO's and lock up the credit markets?

CDOs that were made from subprime, Alt-A or Option ARM MBS are already worthless - go to Tanta's UberNerd posts at Calculated Risk and read the "MBS III" and "Leverage, Ratings, and Forced Unwind" posts.

CDOs are made of the more or less mediocre tranches of MBS - it's the only reason to make a CDO out of that stuff, you use fraudulent math and ratings to transmute BBB- or worse MBS into AAA CDO - and these are already doomed. Therefore, those super-senior AAA CDOs are also doomed, barring a miracle - or a bailout of some of the borrowers.

So 4% of something is way better than 10% of nothing.

Not that I'm in favor of the bailout, but if there's gonna be one, it needs to be form the bottom up, so that osme real human beings get helped out, not the Wall Street parasites.

Anonymous said...

THINK (if you are able, between sports games on TV and blog 'authoring'):

When was the last time (or First for that matter...) that the Federal Government developed a program of ANY kind that 'worked' as it was designed? = NEVER.
(hint for the mentally challenged: Katrina, Iraq -Ring any Bells?)

Smug housedebtors that call me a DOPE, your time is coming. Keep that queer look and attitude like you got away with something for juuust a while longer...

When the Federal Govmnt 'HELPS' you, you are about to take it in the seat. Stock up on vaseline. You may need it sooner than you think... Inertia is a beautiful thing. Ask those who survived the depression of '29...

LOL. King "DOPE" in paid for home.

Reddy Watt said...

Hey Rick J,

Post more information on the DHS ICE emigration program please.

I'd like to know what's going on with this.

Anonymous said...

Welcome to the evil GOP.

Anonymous said...

Class Action Suits Abound!!!

Rick J said...

Reddy Watt - here is the tinyurl of the official link

http://tinyurl.com/ytmjom

"To address this vulnerability, the department recently developed a long-term strategy intended to enhance international and domestic general aviation security by: identifying and vetting passengers and crew on international GA and private aircraft prior to entering and departing U.S. airspace;"

The noose is tightening. This will of course require ICE to hire hundreds of new goons to man the GA airport "checkpoints". And TSA will want to be part of it too...

Andrew Hac said...

Quote:
#####
The biggest threat we face as a nation is the current US culture. It is absolutely the worst culture in American history. There has never been such a degenerate and stupid population as we have today.
#####

Do I need to repeat myself again ?

The Americano is as toasted as a snapper turtle skewered from head to tail with a palm frond stick all sizzling, dropping fat juices over a bed of white hot grilled charcoal.

See if you can defend this ? Princer "Britney Spear" Mononoke...

Anonymous said...

I have this to say to you: you are stupid and a dope. I will win and you will lose. So who is the real loser?

So you're saying that your credit is shot and you don't have any money left for an emergency fund or to get returns of 40% by investing in emerging markets, metals, and commodities? Meanwhile, the house you're never gonna own is losing value every month for the next decade?

Wow, you are really f*cked! You're one serious car accident away from the homeless shelter.

Anonymous said...

more than happy to continue to make my house payments... its less than rent and i agreed to pay for it when i signed the paperwork