February 21, 2008

Lots of chatter about what the government should do to prop up the housing market and bail out housing gamblers. Here's HP's plan for consideration

1) Stand back, let the free market correct, and get the hell out of the way

I hope that plan isn't too grandiose or bogged down in minutiae to be understood by the monkeys in government.

68 comments:

Anonymous said...

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In an election year? LOL! LOL! They will throw tens if not hundreds of billions in order to prop up home prices.

Anonymous said...

Artificially high home prices are NOT good for America

Anonymous said...

Billions? Try trillions!

Anonymous said...

free market??? In Obama's USA? His wife would not be proud of this country if the socialists did not interfere!

Anonymous said...

What have I been calling the past few months?

That '70s Look: Stagflation

Lately, many people are hearing an echo — faintly perhaps but distinctly audible — of the stagflation of the 1970s.

Even as economic growth sags, oil and gasoline prices are surging to new heights. Gold is on the rise, along with the prices of such basic commodities as wheat and steel. And on Wednesday, with the latest government report on consumer prices, there are signs that overall inflation, after years of only modest increases, may be breaking out of its box.

For the Federal Reserve and its chairman, Ben S. Bernanke, all this could not come at a worse time. With the credit markets in disarray from the collapse of the housing bubble, Mr. Bernanke is cutting rates in a headlong rush to blunt the risks of recession.

http://www.cnbc.com/id/23270386

Anonymous said...

I would rather see the Fed expend time and money looking for ways to properly regulate the housing/credit market to stem future abuses than bailout folks who can't manage the risk they willingly (albeit stupidly) accepted.

Anonymous said...

The way I view it is unless the Fed or government comes up with a way to force people to buy, HP will get its wish.

Anonymous said...

Here is my solution: I think the government should pass a law that places a moratorium on falling house prices and falling stock prices. This way, all of us Americans will be wealthy. Oh, since we are at it, the government should pass do something so all of us Americans can be healthy and wise too. Thus, we Americans will be healthy, wealthy and wise.

theloknesmonster said...

Those who have been prudent with their money are too cautious to buy now.

Those who haven't been prudent don't have a pot to piss in and couldn't get financing anyway.

Either way the giant supply of unsold houses will keep increasing.

This of course doesn't mean the delusional sellers asking way too much will drop their prices.

The government may figure out sooner or later that nothing they will try to do will solve the problem.

gadfly said...

If Mr Bernanke has any gumption he will raise rates ASAP to bear down on inflation. This will cause long rates to fall and reduce borrowing costs for everything including mortgages, car loans and corporate debt which are going up at the moment because of inflationary expectations. However note that I used the word 'gumption' which also stands for common sense, a remedy both Bernanke and Paulson appear to need in large doses at this point in time.

Anonymous said...

An "esteemed" market guru in the metro DC area today said that instead of the feel good stimulus package he recommended a 12% federal subsidy for every home sold split 50-50 b/t the seller and the buyer to "unfreeze" the housing and mortgage markets because sellers refuse to lower price, buyers cannot afford homes at that price and lenders are no longer willing to grant zero down mortgages. I was like, when the hell was it the duty of the federal gov't to subsidize residential housing? Admittedly, the feds distort and subsidize markets all the time, but not on a scale like that for something so non-commercial as residential housing.

The Andrew Mellon Quote Keith put up last week is the way to go, let the market sort it out through the price discovery process unfettered from any intervention. We preach to the world free markets at all costs, so why should our message be any different just because it causes financial pain & turmoil that will impact upon us directly?

Anonymous said...

Holy crap: Government proposes negative equity certificates
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/20/AR2008022002710.html
http://tinyurl.com/3bwxqj

Peter T said...

Politicians don't want to be caught doing nothing (even if they want to do nothing), because the media would target them for it - so they have to schedule hearings, complain about the crooks, and amend bills to prevent their passage.

Happy Homedebtor said...

As much as I'd like free markets to work, here's a sad fact of life:

Free markets only work in a Utopian society where people are educated, intelligent, considerate (ergo not willing to screw anyoen and everyone if they think they can make a buck), corporations are responsible, etc etc.

Since this is not, nor has, nor will be the case, they need regulation to some extent. Therein lies the gray area regarding just how much/what ways to regulate.

In the meantime, back to work and stressing over the insane amount of homework I have waiting at home due to my gradschool workload, WHEEEEEEEEEEEEEEEE!

Anonymous said...

February 21, 2008 4:33 PM sez:

Thus, we Americans will be healthy, wealthy and wise.

As long as I'm not required to go to bed early or get up early.

That would be inconvenient with the TV programs that I like to watch, and I don't feel that I need to be inconvenienced.

The government should make sure it's easy to be all the things you suggest, and not step on my rights!

:-)

Anonymous said...

what about something proactive like heavy taxes (50%+) on homes that sell at a value greater then annual wage increase and extra taxes on flippers

Anonymous said...

Solution= RETROACTIVE TAXATION

Enact an (additional as applicable) retroactive tax of 40% on all individual income earned between 2003-2007 for the following revenue streams:

Real estate sales commissions
Mortgage broker commissions
Home Appraisal fees
Capital gains on real estate sales
Ordinary gains on investment real estate sales

Use the proceeds of these taxes to bail out the boneheads. This income was all unearned and mostly fraudulent anyways, so they don’t deserve to keep it.

As much as I am against a bailout, if it has to happen, make those who benefited from this debacle pay, not the innocent folks who didn’t have a damn thing to do with this mess.

Heck if you think about it, this plan is in a round about way discounting home prices from 2003-2007 back to a sustainable level.

Piece!

Afterthought said...

You got it.

PS if you are a "brand" "conservative", you are part of the problem, and have been for a long time.

Anonymous said...

I'm careful about wishing for the free market to self-correct. Even us renters with careers not directly to housing.... we are all connected in this world financially. I don't want to see my 401K become worthless because the world decides to clamp down on general spending and investing for the next 10 years.

SeattleMoose said...

Globalists routinely shove the term "free market" around and beat us over the head wth it. "Let the free market take care of it"! Lets open up {country name} for "free trade"....blah blah blah

And yet all of a sudden "free market" is NOT the solution?

Can't have it both ways...

Anonymous said...

So simple, even a caveman can do it.

Smug Bastard

Happy Homedebtor said...

Like I said, free markets are a great idea in theory/utopian society. We don't live in one of those.

Take some economics classes, and then some history classes, and then some psychology classes. Get some real-world observation/case studies/experience with all 3.

Then, tell me that just letting it all sort itself out is a good idea. ;) And if you do all of that, you're either a liar or an idiot.

Anonymous said...

well they would if they could , believe me. this is exactly what they want. but this time its different. this time the numbers involved are so great , that there is nothing that anyone can do. the system teeters on total collapse....

so let us vote for either a zionist tool and a liar, or a zionist tool and a bisexual crackhead....

that should help.

Anonymous said...

Smub Bastard said...

"So simple, even a caveman can do it."

These are monkeys though.

Anonymous said...

Free markets only work in a Utopian society where people are educated, intelligent, considerate (ergo not willing to screw anyoen and everyone if they think they can make a buck), corporations are responsible, etc etc.

I actually respectively disagree.

The issues we are currently facing, both fiscally and socially, are largely due to the notion that "big brother will always save us". i.e., a concept that violates the very foundations of free market.

As another poster indicated, you can scream for government de-regulation on one hand and then scream for government action and bailouts with the other. We, as a nation, have become so complacent in our thinking that the assumption is that the government will always be there to save us from our own stupidity. And it is this complacency and lack of individual accountability (on Wall Street) as well, that leads to these idiotic cycles of unfounded euphoria followed by large scale contraction.

In my opinion, we have a legal system in place that is designed to handle situations where individuals feel they were misguided or unfairly (or illegally) targetted. If a subprime borrower can prove to a jury of his/her peers that a mortgage lender broke the law and caused them monetary losses, than that should be handled in court.

By and large, the vast majority of this housing runup was simply due to one thing: mass psychology. Lemmings running off of a cliff and what not.

I think a housing crash of large magnitude would be one of the best things that could happen to this country for the following reasons:

- It would eliminate once and for all the notion of a 100% investment which is a concept that realtors have been touting (falsely) for years

- It would be a wonderful wake up call to those who partake in risky transactions, chasing proverbial wealth to fill their massive sense of entitlement and ego

... and most importantly:

- It would FINALLY bring housing to affordable levels, which is exactly what needs to occur (and not through more and exotic debt)

Anonymous said...


Free markets only work in a Utopian society where people are educated, intelligent, considerate (ergo not willing to screw anyoen and everyone if they think they can make a buck), corporations are responsible, etc etc.


Wrong. The free markets are working right now. Nobody guaranteed that the free markets would be a smooth, easy ride to prosperity for everyone. Nobody ever guaranteed that the stock, bond and RE markets always go up, except for the fraudsters at NAR.

As far as regulation, of course it's needed and it's already there. All the regulation in the world won't help if the regulators don't do there jobs and the legal system does not punish the criminals.

What we have here isn't a failure of the system. That's like saying it's a computer error. It's really a failure of humans. GIGO

Anonymous said...

Like I said, free markets are a great idea in theory/utopian society. We don't live in one of those.

Take some economics classes, and then some history classes, and then some psychology classes. Get some real-world observation/case studies/experience with all 3.

Then, tell me that just letting it all sort itself out is a good idea. ;) And if you do all of that, you're either a liar or an idiot.


I have taken economics, history AND psychology classes in university. (They were, quite frankly, very basic relative to my engineering classes)

So being that I disagree with you, I guess that makes me either an idiot of a liar. But quite frankly, I think you have too low an opinion of humans in general.

If you look at the current situation and expand it over the greater population of the country, you will discover that most of the grief we are seeing is due to the actions of a select few. In actuality, most people are far more intelligent and fiscally responsible than either the government or Wall Street would care to admit. However, it is that select few that raises up a storm through their own unmitigated greed, selfishness and stupidity.
And I am sorry, but if those qualities were prominent in the majority of the population, our civilization would have collapsed long ago.

Free markets work absolutely and 100% perfectly. Why? Because they are based entirely on fundamentals. Free markets fail WHEN actions are taken to subvert their underlying mechanism. i.e. government intervention.

This government has stepped in numerous times to "save" us from ourselves. The S & L crisis. The dot com implosion. Money for the airlines after 9/11. And now the housing crisis. So from a psychological standpoint, what does that lead to?

Ultimately, complacency and little to no risk aversion. Why be worried about incurring risk when Mr. Government will be there to coddle you and throw on a bandaid?

You know, there is a reason that they refer to the post Great Depression, post WWII folks as the "greatest generation". That is due in large part to their self reliance and responsibility. Compare the average generation Yer MTV addict to a GI returning home from serving on the fronts in Europe or the Pacific theatre and spot the difference.

For every time the government takes a step to mitigate a "disaster" on the financial front, that is one more act of "coddling" that makes us ever more complacent. And in that kind of environment, the free market is an illusion. It is government socialism and borderline communism at its finest.

tater said...

1) Stand back, let the free market correct, and get the hell out of the way

Keefer,
I love it, but that is much too complicated for this U. S. government to understand. A 600 page, meaningless bunch of garbled, bureaucratic doublespeak would be more to their liking.

gadfly said: a remedy both Bernanke and Paulson appear to need in large doses at this point in time.

Soooo TRUE, gadfly

Anonymous said...

>> I would rather see the Fed expend time and money looking for ways to properly regulate the housing/credit market to stem future abuses than bailout folks who can't manage the risk they willingly (albeit stupidly) accepted.

The Fed is an illegal entity, thus it should not even exist. Stop giving it legitimacy by telling it and Bernanke to do something.

Anonymous said...

>> Globalists routinely shove the term "free market" around and beat us over the head with it. "Let the free market take care of it"! Lets open up {country name} for "free trade" ....blah blah blah

Some free market we have - the government micromanages, or tries to, EVERY aspect of our lives. Yeah, I love my freedom, as I drag my chains around...

Anonymous said...

This hasn't been a free market since the Fed was created in 1913. Then FDR created the GSE's, FDIC, FSLIC, and FHA to further distort the markets. Then Reagan created the PPT to distort the stock markets (although nobody used it until Bush II). Then there was the S&L bailout followed by the LTCM bailout. The government has been propping up the markets for the past 70 years and that is how we got to this point.

How about a real free market with real enforcement of the laws and prosecution of the ones who break the laws instead of punishing everyone else? The government tries to reduce risks by creating these GSE's, but in reality, it is only causing people to take bigger risks due to the perception that there will be a bailout.

Happy Homedebtor said...

RE: Free Markets work.

The person who said I have too low of an opinion of human nature hit my point, although he/she is still too optimistic/missed it:

1. People are stupid and greedy. The fact anyone in this country ever got an Option ARM is proof positive of that. The sheer # of those indicates that we have a huge % of our population that is greedy, entitled, AND stupid. So forgive me but no, my opinion of human nature is dead on in this context.

2. Some people are self-centered, greedy, and morally corrupt. They will lie, cheat, steal, etc - whatever they feel they can get away with - to make a buck. The ones that go to this extreme may or may not go to jail. However, the people who ride the gray areas that *always* exist around/besides/within laws will never, ever, go to jail. And it's all of these types that will pray upon others, and with no real consequences, it will continue and make a free-market society a failure to anyone not fully educated or intelligent about their markets/decisions/etc - or just don't care because they're too greedy or entitled - which as evidenced by #1, is alot of people.

Again, the world isn't perfect - if everyone was on the same footing, a free market would work. That is not the case, it never will be, and thus it will always fail overall.

girlbear said...

I noticed the ad for "VirginMoney" on your side bar. I have looked into this, does anyone have any experience with this kind of "person to person lending"? If not, where do I put my 200k that I am saving to buy (not for a mortgage) my next house?
Best interest I can find is 4%.
Any comments?

eric in vegas said...

This is all election year talk. Once the elections are over the bailout plans will stop.

usausausausausa said...

After 1929 it took a dozen years of depression, a world war, and 5 more years of depression to work things out. All of the onerous regulation and government meddling that resulted has finally been repealed after almost 50 years, and now we can rest assured that the free market will be able to work this out. The greatest story never told is here to bring us into capitalist utopia.

Anonymous said...

If we're not willing to live with the free markets and democratic/republic form of govt
(NOT Political parties, but the form of gov't)
that we have here, we'd best thing twice before we send good men & women oversees to fight and die to force it on someone else.

Unrelated: Castro retired.
Tiny little spot right next door to Miami.

After our presidents have come and gone into oblivion, and after all the rhetoric and saber rattling, he ruled as long as he wanted, did things the way he wanted, and retired when it was convenient for him.

As much as this hurts our ego to admit, we ain't all that!

We'd better get our crap together at home before we go trying to export it anymore!

Anonymous said...

"The sheer # of those indicates that we have a huge % of our population that is greedy, entitled"

Don't forget IMMATURE.

Ed said...

Free markets in the USA? Good one. Maybe in 1808, not 2008.

FUNNOMINAL said...

People reminisce about the '70's stagflation and draw analogies to the present. Besides what happened when the arabs pulled oil off the market and then yanked up the controlled price, what we had back then was 'cost-push' inflation with Unions demanding wage hikes commensurate with price level increases.
Right now working people are not keeping up with inflation and are losing ability to buy most things. Add in the fear that these thinly paid jobs are about to be cast aside. Throw in the negative wealth more and more people are experiencing both real and potential.
Oh the demographics of 78mm 'b.boomers' expecting SS,'health-care', Medicare and LongTerm Care?
Quo Vadis?
FUNNOMINAL

Anonymous said...

happy homedebtor:

The free market is about freedom, and about people having the freedom to make good decisions and to make bad ones as well, and then to bear the responsibility for those decisions.

Letting the free market sort it all out is a very, very good idea. People should pay for their mistakes and deal with the consequences of their actions. End of story. If you don't agree with this, you are a total idiot.

Mark in San Diego said...

I was out at Anza Borrego State park yesterday hiking in Palm Canyon - every year it gets a big flood and washes away lots of big rocks and debris. . .no matter what the rangers put out for a trail, it gets washed away. . .what a nice metaphore for housing - "all the kings horses and all the kings men can't put Humpty Dumpty back together again.". . .the market WILL take care of things.

Anonymous said...

THE RUSSIANS HAVE COME! THE RUSSIANS HAVE COME!

Dylan Ratigan announced on CBNC's Fast Money today Russian soverign funds were injecting dough into Fannie and Freddie. If that don't beat all!

Anonymous said...

The longer the losses stay on the balance sheets the longer and worse it will get.

The banks just need to take the hit and move on. The losses aren't just going to go away.

Suck it up and clean up the books!

What the hell is the Federal Reserve doing? They have an office in every big bank and they know what the hit will be, for now any way. And yes it probably will get bigger!

Just do it already!

Anonymous said...

Globalists routinely shove the term "free market" around and beat us over the head wth it. "Let the free market take care of it"! Lets open up {country name} for "free trade"....blah blah blah

And yet all of a sudden "free market" is NOT the solution?


You have to learn the translation.

"Free market" in their reality means "freedom to loot", while deluding themselves (or not!) that it's all virtuous, constructive progress.

The mastubatory fantasies of Ayn Rand fandbois.

You think looting is only black people stealing beer and TV's? That's insignificant.

Enron: legal looting of the California state treasury.

Countrywide: legal looting of the global financial system and millions of tricked and stupid homedebtors.

Anonymous said...

The market is correcting itself as we speak. In Houston, you are beginning to see foreclosures coming to the market in the 60-80k, while FB are listing their houses for 150k+

Unless you're lucky enough to have a bank that's willing to accept a short sale, there's no way in hell you're going to sell your house, barring a very, very desirable location.

Anonymous said...

There hasn't been a free market in the USA since before the Fed came into power. I love listening to people and reports in the MSM that Bernanke may have to raise rates soon to fight inflation. Remember how they took M3 away? Well now on March 1st they are going to stop reporting other statistics that show the enormous inflation that we are now experiencing. Does that sound like actions by people that are going to raise rates? Remember how Bernanke was going to be more transparent? Whatever Bush, Bernanke or Paulson say, be assured the exact opposite is what is really happening. Operation North American Union is now well underway, fully blessed by US citizens once we are in a severe depression. Its sad that the greatest country ever founded is gonna be gone within the next 10 years. This has already been decided.

Anonymous said...

"In actuality, most people are far more intelligent and fiscally responsible than either the government or Wall Street would care to admit."

Stop kidding yourself. The majority of people are dumb and selfish.

What % of people today NEVER carry a balance on their credit card? I'd say 10-20% AT MOST.

What % of people don't use debt to create the illusion of wealth? Again, I would say 10-20%.

And very old retired people don't count in this calculation, they're part of the old guard that is sadly on the way out.

Anonymous said...

Keith:

Some idiot reporter at Forbes just did a hatchet job on Peter Schiff. Can we get a thread going to alert HPers about it so that they can read it and post comments? Peter needs our support. Here's the link

http://www.forbes.com/forbes/2008/0310/072.html

the other trader said...

I thought credit was there to HELP us buy houses, now it is here to help us NOT buy houses....(default)

hmmmmmmmmmmm..

Imagine what the housing market would be like without bank credit...

we might be seeing it with our own eyes, soon!!!

sadbuttrue said...

"Artificially high home prices are NOT good for America"

businesses only want to pay the cost of labor; thus, given the quality of life that Americans expect, they've become too expensive. if that reality hits home, it will be very sobering.

WINGS said...

Trillions?

Try Zillions!

Anonymous said...

something you guys might get a kick out of here...

http://www.flipthislawsuit.com/2007/10/12/montelongo-foreclosure-and-court-activity/

Anonymous said...

California has a forecasted $16B budget deficit for 2008. State legislators plan to raise taxes instead of cutting free medical and college education programs for illegal aliens to cover part of the shortfall. This despite the fact that California has a net outflow of wealthy and educated citizens due to high taxes. The land of fruits and nuts and nuts and fruits. Since 2003, over 20% of Californians who earn more than $1M/yr have left the state along with dozens of companies.

Anonymous said...

Soon 1 ounce of gold will buy a house.

Anonymous said...

Happy Home debtor,

If you truely understand that human nature is greedy and self-centered, shouldn't it be quite obvious that whatever gets done in the name of "the government" is actually done to benefit those best connected with government co-ercive power? Your presumption that "government" is out to help people from their own stupidity makes no sense at all because "government" is a non-actor; it's the bureacrats who have very real human greed and self-interest that pull the levers of the "government."

Take for example, people who took out 100% loans on buying $500khouses, and now the houses lost 20% of the value, what's the big loss for the person being foreclosed if he/she can rent a comparable house for $2k a month instead of the $4-5k that's needed to pay for a fully amortized mortgage plus tax plus insurance? Nothing, nothing at all. The bail-out is not for bailing out home debtors, but for bailing out the banks. What do homedebtors actually get out of the "bail-out"? Nothing at all if they have to continue paying mortgages that are higher than renting a comparable house. In fact, the homedebtors should voluntarily walk away as soon as housing price stop going up, and mortgage is higher than renting comparables. If you have a house that's 5x your annual income, at 6% interest rate, you have just signed up for a 30% income tax! to be paid to the bank! That's why the government is doing all it can to make sure that you stay pat with your "deathgrip" (the meaning of the French word "mortgage"), to benefit the banks.

Anonymous said...

("Free market" in their reality means "freedom to loot" . . . Enron: legal looting of the California state treasury.)

Pray tell where did the California state treasury get its money other than legal looting? How many people voluntarily donated to the California state treasury? If California state treasury had not existed, Enron may have had to figure out ways to loot from each and every individuals . . . I'd be far more inclined to have a choice on who gets to "loot" me through financial chicanery than having a state monopoly looting me with the threat of guns and jails.

edd said...

I'm mad as hell, but I'm going to
keep taking it until it's too late.

Anonymous said...

"What % of people today NEVER carry a balance on their credit card? I'd say 10-20% AT MOST."

In terms of ratio to annual income, it's nothing compared to the amount of debt that has been run up by politicians and bureacrats in the name of "the full faith and credit of the United States." Ask yourself, are you more likely to abuse your own creditcard or are you more likely to abuse a creditcard that you can use but is in someone else' name, such as a company card?

Anonymous said...

In California if they put Mozilo and other CFC executives in jail and took back the stolen money you can have a fund of about 1 billion dollars!

That is correct, this $1 billion can then be used to help bail out the homeowners that Countrywide stole from.

Costs taxpayers nothing.

The money is there, because it was stolen.

Anonymous said...

In Russia we have government give 1 house to each married couple.

If you birth more then 3 kids for the motherland then you get upgrade to nice 4 bedroom apartment.

If is every russian womens dream.

Divorce rate very low. Single people must stand back of line for home or be friends with party member or be able to buy home with own money. Very difficult to be single.

Non-russians and ethnicly un-pure people are not given home by government with helps inbreding to conintue.

Regards,
Sasha Dorkoff

Anonymous said...

In actuality, most people are far more intelligent and fiscally responsible than either the government or Wall Street would care to admit.

Sure they are. That's why these "inteligent people" elected Bush/Cheney TWICE. Lots of brain surgeons like you out there.

Anonymous said...


Sure they are. That's why these "inteligent people" elected Bush/Cheney TWICE. Lots of brain surgeons like you out there.


They also elected Clinton TWICE along with the Democrat majority in Congress. HMMMM

So they're smart when they elect people you like, but dumb when they elect people you don't like. I get it now

Anonymous said...


The banks just need to take the hit and move on. The losses aren't just going to go away.

Suck it up and clean up the books!


Two reasons why it won't happen:

1. They will be insolvent if they come clean.

2. The bankers and hedge funds are working with congress next week to have the US Treasury monetize all those toxic CDO tranches and piggyback/HELOC loans at 90% of original cost when in reality they are worth 15 cents on the dollar at best.

the_truth_hurts said...

The government helped bail out the dot com implosion?

BS. The government increased unemployment by 3 months for a short while. At the same time, they were bringing hundreds of thousands of foreign tech workers into the country to handle the "excess jobs" being created in technology. What a lie!

Anonymous said...

In actuality, most people are far more intelligent and fiscally responsible than either the government or Wall Street would care to admit.

Sure they are. That's why these "inteligent people" elected Bush/Cheney TWICE. Lots of brain surgeons like you out there.


Bush/Cheney BARELY won the first election. In actuality, they lost the popular vote. So more than half of the population did not vote for them.

And of those that did, how many did so for self interest? You are equating one's voting record with their intelligence which is a falisy.

Anonymous said...

How bout that free market Dow today? 100 down to 100 up in the last 1/2 hour. I'm sure that it really was the news of the bond insurer bailout, yes definitely, pay no attention to Fannie & Freddie. Goldilocks is alive and well, free markets and capitalism are the best path to prosperity. How much did Goldman make in the last 1/2 hour today? I wish I had the pre-market tip that they get from Paulson.

Anonymous said...

Here's a point to make, anyone who pays one's credit card balance in full, every single month w/o exception, isn't really a true user of credit.

That person is a dividends or frequent flyer miles collector, in other words, the card is simply an extension of their debit card and is a used for convenience and overall benefits. That's approximately 10% of all MC/Visa holders and they need to be discounted from the true users of credit who carry a/o roll their balances and payments over, from time to time.

Anonymous said...

Chill out. Socialism in America is for the rich. Of course the bankers will be bailed out.