May 12, 2008

A HousingPANIC message to Barney Frank, Chris Dodd, Hillary Clinton and any other fool who thinks American taxpayers should bail out Housing Gamblers

Barney, Chris, Hillary and Friends,

If you spend one penny of direct taxpayer money, or expose the American taxpayer to any more risk than we already have (Fannie, Freddie, FHLB, FHA, etc) THEN WE WILL HOUND YOU, WE WILL TAKE OVER YOUR OFFICES, WE AND WE WILL VOTE YOU OUT THE NEXT CHANCE WE GET.

WE ARE THE MAJORITY. The vast majority of Americans who rent, who OWN, and who didn't treat homes as lottery tickets these past few years. WE ARE THE HONEST ONES, THE RATIONAL ONES, THE SANE ONES. And we not allow you to bail out fools, flippers and fraudsters with our money. Period.

It was rampant fraud and wild speculation you corrupt monkeys. And we're pretty sure you know that. So why the rush to bail out Housing Gamblers? Is it your REIC masters, calling the shots? Is it because you "own" homes yourselves, and don't want their values to go down further? Is it because you feel propping up artificially high housing prices is good for America, or for future generations? Or is it because you are simply misreading the will of the people again, which would be par for the course since you've done such a terrible job serving the people these past few years?

One final message that we want you to hear today, on No Housing Gambler Bailout Day, loud and clear: PEOPLE WHO PUT LITTLE OR NO MONEY DOWN ARE NOT LOSING 'THEIR' HOMES. THEY ARE NOT THEIR HOMES, THEY NEVER WERE THEIR HOMES, THEY LIKELY NEVER WILL BE THEIR HOMES. And most likely they're better off renting (and not watching MTV Cribs ever again).

No Housing Gambler Bailout. WE'RE WATCHING, WE'RE THE MAJORITY, AND WE'RE PISSED.

60 comments:

keith said...

HP'ers - go back to the front page, and click on the little forward envelope at the bottom of this post. Then send the post to:

comments@whitehouse.gov

Easy. You've done good work for the day and now you can go home.

Anonymous said...

Also send this to your congressperson and your senators.

Anonymous said...

I am so pissed .. I just sent this to Mr. Frank. I am even thinking of moving to Mass to run against him. This is a disgrace.

Mr Frank,
I have always been a proud American and one heck of a large taxpayer. I have run major trading floors and designed some very sophisticated valuation programs in my life. For this I make several million dollars a year so somewhere people seem to think I know what I am talking about. I own several houses and will take my punishment in this market for my decisions. I would go into greater length but i doubt it is worth my time. I know I am not in your district but I swear I am going to donate to whoever runs against you for what you have just done to Americans with your housing bill. It will be by no means a small donation. You are whats wrong with this country and you are ruining it and you must be stopped.

cobra2411 said...

Keith, I'll be surprised if you get more then 100 people who do that.

Karl over at the Market Ticker blog has been talking about this for over a year and he even setup a petition at financialpetition.org to fax the congress critters using his own money and he's lucky if he has a tenth of the people that visit the site even look at the petition.

The risk that we face is that the foreign investors that we've become dependent on will take off. In the 1930's it was the government monkeying around trying to throw money at the problem that triggered a bond market collapse and tuned a recession into the great depression.

So far we've been repeating the steps one after another; almost as if they're following some "depression starters guide for dummies" book.

It's important for people to understand that this is bad and for them to voice their opinion. Very simply these people made a bad decision and we shouldn't use tax payer money to bail them out.

Either forward Keith's message, go over to financialpetition.org or write your own.

You can also go to www.house.gov and www.senate.gov and find your local senator and congressman and write them.

If you don't, then you willing accept what ever happens and you can not complain. I have a stack of emails and faxes that I've sent over the last year; so I can complain very loudly...

DOPES said...

MORTGAGE RATES ARE CLOSE TO HISTORIC LOWS...

HOME PRICES ARE CLOSE TO HISTORIC HIGHS...

GET BENT OVER BY THE REIC TODAY...

YOU'LL BE SAD YOU DID...

DOPES!!!

wc said...

I actually made the mistake of sending similar comments to Hilary's website - only mine included how she made it too difficult not to vote for Obama - now all I get are emails from her asking me for money. I never for once in my life imagined I would actually stand on the Rebublican side of any issue until this.

Mark said...

A HousingPANIC message to Barney Frank, Chris Dodd, Hillary Clinton and any other fool who thinks American taxpayers should bail out Housing Gamblers

Hmmm - no mention of Obama? Now why is that?

Nick said...

You are the majority? So what! That won't stop the government from passing the housing bailout bill. It will happen one way or the either. The Fed, Sheila Bair, Congressmen, and all three Presidential candidates are behind the housing bailout. The government wants to legalize all of the invaders (about 20 million of them). Sooner or later it will happen. The real fools are HP'ers because they saved their money and lived with their mother. Now all of that money you saved will be used to bailout irresponsible people.

Anonymous said...

This is a joke, a sick, sad joke. It doesn't matter what we say or petition - they will NEVER listen. We have absolutely NO say in how our tax dollars are being spent. This will definitely help housing to recover and prices to remain high.

Anonymous said...

Keith, when will Barney Frank run for office again? Also, who will run against him? We need to support a candidate who is running against Mr. Frank so the message is loud and clear. I would give a nice campaign donation to any viable candidate running against Mr. Frank.

Anonymous said...

There is some name that I can't seem to remember that is conspicuously ( or inconspicuously ) absent from that list...
what is it - tos something like that... maybe huss...
bar something or other...
damn this alzheimer's...
oh YEAH - that guy keefer endorsed for president...

Anonymous said...

Keith,

Be reasonable, people like this deserve a bailout.

http://tinyurl.com/554q3t

3 houses for coyotes with aliens to hide
7 for Crack Lords to sell their rock and stone
9 for Shawn "Fucktard" doomed to cry
1 for the bitter renter to call his home

Anonymous said...

Obama is ready to sign. LOL.

Happy Homedebtor said...

Keith - you're not in the majority, sorry.

You're a minority.

And most of the people who would agree with you are too lazy or too poor to take any action/pay attention.

I'm currently trying to find out why Uncle Sammy stiffed me on my rebate check - we didn't make enough *last* year to be disqualified damnit, so I want my handout!

Oh yeah - and the housing bill is gonna pass, because in its current form there's enough room to trim it alot and still make it viable:

1. No restriction (depending on what story you read) yet about owner-occupied only. This will be cemented and remove Bush's ability to claim it bails out speculators.

2. Must be able to afford it at the new payment-levels using the REAL (not your imagined) 3-4x income ratio. That's not fully there yet.

3. The 85% of appraised won't stay; it'll go to 90-95%...perhaps 94% to be exact. This here is the key/trick, let me show you why:

Right now, millions of people are unable to sell their homes because they're underwater. This means they aren't spending money on the home (economic activity) and are cutting back in general out of fear. If they reduce the balances to 94% or lower, the people can sell their homes again. A sold home/transaction gets economic activity flowing because then there's realtor comissions, appraisers, mortgage brokers/banks, home improvement, services, etc etc. Plus the people who sold the home aren't "burdened" by it and can rent and piss away $$.

Barney Frank could come out looking like a genius if this works.

Since you have 0 grasp of economic principles or concepts, it's understandable why you can't grasp that the lockup in the housing market, if it continues/worsens, will create a worldwide economic depression. In which case noone is safe - least of all you.

A Boy named Barney? said...

Here is the response I received from one of my Senators the same day I e-mailed the rant posted with my aditional comments.

Read it and weep... I think I'd rather name my son Sue than Barney...

Dear Friend:

Thank you for contacting me regarding the current foreclosure crisis. I appreciate hearing from you.

Over the past decade, as housing prices rose sharply, lenders and mortgage brokers began offering new exotic loan products frequently using low initial interest rates and predatory tactics to steer borrowers toward loans they could not afford.

Now higher payments on these loans combined with declining property values are forcing many families into foreclosure. California is being hit particularly hard by the foreclosure crisis, reporting 481,392 foreclosure filings on 249,513 properties in 2007, the highest total of any state and more t han triple the number in 2006.

I have supported several sensible steps to ease the mortgage crisis. On April 10, 2008, the Senate passed H.R.3221, the Foreclosure Prevention Act of 2008. This bill contains $150 million for foreclosure counseling, nearly $4 billion in funds to rehabilitate foreclosed properties through Community Development Block Grants, and $10 billion for mortgage revenue bonds for states to extend lower-cost loans to distressed borrowers. H.R.3221 also amends the Truth in Lending Act to improve the disclosure of loan terms to borrowers upon original application or refinancing of a loan.

Previously, Congress approved an additional $180 million for housing counseling and a temporary increase in the size of loans that Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) can back.

Though these actions are a good start, we need to do more. That is why I am co-sponsoring several bills that would regulate the mortgage industry, prevent some of the worst lender abuses from reoccurring, fight mortgage rescue fraud, and promote sustainable and affordable homeownership.


The Homeownership Preservation and Protection Act (S.2452) would require mortgage lenders and home appraisers to act in good faith in all aspects of the home appraisal and mortgage process while giving borrowers recourse against lenders who do not. This bill would also require lenders to verify the borrower's ability to repay a loan and prevent lenders from steering a client into inappropriate loans. In addition, S.2452 would prohibit the use of balloon payments and prepayment penalties in subprime and non-traditional mortgages, and it would increase funding for the FBI to pursue cases of mortgage fraud.

Despite industry promises, the pace of loan modifications to help families stay in their homes remains too slow. To address this problem, I am co-sponsoring legislation to allow bankruptcy judges to modify unaffordable mortgages on a homeowner's primary residence, the same power judges already have for vacation homes or investment pr operty.

I am also co-sponsoring the Foreclosure Rescue Fraud Act, (S.2888). This bill would protect homeowners who are already in financial distress from becoming victims of foreclosure-rescue schemes by creating strict requirements for all people or entities offering foreclosure-rescue services. S.2888 would prohibit a foreclosure consultant from collecting any fees before any service is rendered, create a three-day right to cancel the foreclosure-rescue contract, and prohibit a foreclosure consultant from obtaining power of attorney from a homeowner.

We must use all the means we have to move towards a solution to the foreclosure crisis. The Federal Trade Commission's reach should be extended to include deceptive and unfair acts committed by banks and lenders. The increase in FHA and Fannie Mae loan limits must be made permanent. In order to keep loans affordable for many subprime borrowers, we must work closely with and keep the pressure on large lenders and the HOPE NOW coalition of housing counselors, lenders, and investors.

Again, thank you for writing to me. Be assured that I am committed to finding a fair and equitable solution to the housing foreclosure crisis.


Barbara Boxer
United States Senator

gutless and lazy goes sarcastic said...

Why all the surprise and outrage? Don't you all know how politics works? It's an election year. However panders and buys off the most voters, wins!

Geez, get with the program!
How do you think USA got into a 50 trillion dollar deficit, anyway?!

GT said...

as a fed myself, i feel like i shouldnt have my name on the list as those against this even though i am. maybe this is what our country is headed toward. you either work for the feds, are a contractor for the feds, or lobby to the feds. as soon as half the population falls in this category, they own the people.

Anonymous said...

According to a new CNN/Opinion Research Poll, 49% of Americans believe such homeowners should receive special treatment, while 48% feel homeowners should not get assistance. Three percent of those polled had no opinion.

Not zackly a rousing majority if one is inclined to believe CNN/Money.

http://tinyurl.com/3el26q

JaneZ

Anonymous said...

stock markets up HUGE once again

every day it seems like we're up another 100 on the dow

keep investing in 1% cds losers

Anonymous said...

The bailout is already working I think. On my drive to work I heard 3 radio ads for mortgage lenders. BofA, Wamu and Wachovia.

So much for the supposed credit crunch. Banks don't spend money on advertising mortgage products if they won't lend out any money for mortgages.

HP and others were spot on calling this housing crash. But you are way off in thinking the govt wont do everything in its power to prop up the prices.

Anonymous said...

Oh yeah, John McCain is a really smart guy, a real war "hero":

John McCain's Straight Talk Express

How anyone could vote for this madman is just confounding.

You people do realise that this foreign invervention is far more costly than even a housing bailout right? I'm not for any housing bailout and ultimately any bailout will fail anyway but foreign military intervention is one of the major factors destroying this economy. It's all about inflation chumperoonis.

tangelo mozilo said...

Happy homedebtor said . . .

"Since you have 0 grasp of economic principles or concepts, it's understandable why you can't grasp that the lockup in the housing market, if it continues/worsens, will create a worldwide economic depression. In which case noone is safe - least of all you."
----------------------------------

You have cited the only justification for a bailout (aside from all the bleading heart "save the families' homes" nonsense. However, the worse the fallout from the collapse of a speculative bubble, the stronger the argument for punishing the risk-takers. No?

Frank@Scottsdale-Sucks.com said...

Hmmm - no mention of Obama? Now why is that?

Because He is the New Messiah.

Now go do your pennance and bow toward Chicago five times a day to repent your sin.

Reality said...

Happy Homedebtor,

The "lockup" will quickly resolve itself when all hopes of bailout are eliminated. With the bailout expectation eliminated, there's no reason for homedebtors to hold onto houses that are upside down and have mortgage payment more than double the rent revenue. Bank unwilling to accept the short sale? The homedebtor would just walk. We already have a safety net for debtors: it's called bankruptcy protection! Heck, for homedebtors, there can be foreclosure without personal bankruptcy.

Your point about "getting economic activity" flowing goes to show just how ignorant your are yourself. The market place is a price discovery mechanism. Efforts to reflate the busted housing bubble would inevitably cause hyperinflation, which means the economy would lock up elsewhere . . . say, a gas line, a bread line, etc.. Any new government money pumped into the housing sector would be quickly taken out to drive up price elsewhere because housing and REIC is the last bubble; smart money is fleeing from it and taking anything tney can. We do not need such a high per centage of six-percenters or mortgage brokers for a healthy economy, or so many home construction workers when there are so many houses sitting empty. . . just like we discovered an excess of stock brokers in 2000. That's what market crashes are for: cleaning out previous excesses, so the recourse allocation can be healthy and efficient again. The quicker realtors and loan brokers find a new line of work, the better for themselves; quite a few of them probably had been stock brokers before hitching onto the REIC wagon in the early 2000's.

Anonymous said...

If Obama is the Messiah who's bringing people together and the favorite of all Americans and demographics as the pundits and Keith keep vomiting, he should win Virginia and Kentucky by a huge margin, right? After all, according to them, Hussein Obama is a winner, who's winning all votes in all demographics, right?

Let's see tomorrow if that hogwash is true. If Hussein Obama doesn't win those states by a huge margin, he hasn't won crap yet. What kind of candidate does winner laps in Congress if he keeps losing major states and can't carry major demographics needed to win a general election? Hussein Obama is nothing but another Dean, Kerry, Gore, or Dukakis.

Wait until McCain picks Bloomberg or Mitt Romney for VP, as the rumors are circulating. Obama will be toast.

Anonymous said...

Happy Homedebtor said:

"Right now, millions of people are unable to sell their homes because they're underwater. This means they aren't spending money on the home (economic activity) and are cutting back in general out of fear. If they reduce the balances to 94% or lower, the people can sell their homes again. A sold home/transaction gets economic activity flowing because then there's realtor comissions, appraisers, mortgage brokers/banks, home improvement, services, etc etc. Plus the people who sold the home aren't "burdened" by it and can rent and piss away $$."


Does that logic really make sense to you? Because I find it totally retarded. How is the government financing a home at 90% going to help in places like California and Florida, etc. with 25% drops in value to date? What happens when home prices drop another 10% as they are predicted to do this year?
Barney Frank's bill bails out the lender (which is what this is - a MASSIVE LENDER BAILOUT) - and screws the taxpayers. It will not
reignite the real estate market as you seem to think. The losses are too great and close to bottom yet.

The bailout plan fills the lenders' pockets with government, i.e. taypayer's money nothing more.

And I disagree with the other posters, the government is getting major flack for this bailout plan from all kinds of people. Our voices are making a difference.

Email, fax, do whatever it takes - NO BAILOUTS!

Anonymous said...

"THEN WE WILL HOUND YOU, WE WILL TAKE OVER YOUR OFFICES, WE AND WE WILL VOTE YOU OUT THE NEXT CHANCE WE GET"

LOL...Can "We and We" even find the offices in the first place to take them over?

What a crackup...why you try to spur people to action, many of whom are just self-important and delusional enough to be afraid to leave their house for fear they will be followed, is beyond me.

Happy Homedebtor said...

To reality:

1. You didn't dispute any point directly, so I'm confused.

2. What part of "forcing the banks to write down the principal" would be pumping money into the system? Is literacy not something you're fond of? At no point did they say "Here, we're going to hand the bank the 15% equity + whatever you're upside down". They said "the bank has to write the loan down to 85% of the current appraised value". So your argument on hyperinflation/everything automatically fail.

Reading comprehension is your friend - look into it.

As for your spouting on needs/etc - you've obviously never taken an economics course or studied much of anything related to finance, so I'll forego trying to explain your baffling unfounded rantings on that.

Happy Homedebtor said...

To anonymous at 7:15pm:

Wow, just like "reality", you can't read can you?

1. The government is not financing the homes - so you fail at reading comprehension. They are *insuring* the principal. That is a fact - go do some research, end of story.

2. Yes, because these predictions of falling another 10/20/90% are DEFINITELY accurate, just like the ones 2 years ago by the same people that housing prices would "moderate" to 5%/year before resuming their spikes? You can't thrash an analyst for being an idiot on 1 prediction, and take the next one as gospel.

3. How does this bail out the lender? Lemme break it down for you:

$500K house
Now worth: $400K (DC area avg price depreciation from peak)
Mortgage goes from: $500K -> $340K
Person who eats the $160K: Lender
Homedebtor: lower payment, lower profits when they sell if house appreciates, ability to move.
House defaults: lender gets their $340K, out $160K still

No housing bailout for HOMEDEBTORS, homedebtor defaults: lender out $150-200K, lower home prices in neighborhoods, ruined credit for family.

So it *guarantees* a loss for the lender, but saves them potentially 20-25% of the loss without the bill. That's called insurance - you pay 10% to avoid 100% loss. My God, does everyone on this board flip burgers for a living?

So realistically, the bailout keeps alot of people in their homes, prevents alot of people like me who can make payments but wouldn't sit there if they were 25-50% upside down from walking away and exacerbating the problem, forces the lenders to bare the brunt of the pain, and ends up costing 1-10% of the amount that the "economic stimulus rebate checks" did.

Math, financial, economic, and general common-sense skills aren't very popular amongst you or your readers Keith.

Keep hoping for a catastrophe - you know what they say: hope in one hand...

Alpine, New Jersey said...

HA HA Bitter Renters! We are getting bailed out and you are not! This bailout is the best thing to come out of Congress! Barney Frank is fabulous!! I should call him and his boyfriend up and thank him for his excellent work!

Anonymous said...

You people do realise that this foreign invervention is far more costly than even a housing bailout right? I'm not for any housing bailout and ultimately any bailout will fail anyway but foreign military intervention is one of the major factors destroying this economy. It's all about inflation chumperoonis.

I think that you should focus on your Brit or Australian mess first. What do you care about our US affairs and candidates, if you're not even an American living in he US? How do I know? Americans don't write "realise", Brits and Australians do. Or you could be one of those Muslim parasites who live in Britain, sucking English taxpayer money and Universal healthcare while bitching about everything.

Anonymous said...

One of the previous posters hit the nail right on the head.

This is a lender bailout. Nothing more. Anyone that thinks otherwise is either ill-informed or ignorant. (Or both)

The government is taking the necessary steps to avert finacial disaster as a result of this derivatives fiasco. Once the majority of that damage has been mitigated, we will start to see a rise in interest rates yet again. Care to guess what will happen to house prices when mortgage rates go from 6% to 10%?

As others have stated, more than 30% of this country is renters. Another large majority own their homes outright or have a substantial amount of equity so that they can absorb the downturns in pricing. That majority of folks are not going to sit idley by while inflation eats away at their quality of life. (We are seeing the initial stages of that right now)

So I am sorry bubble-sitters, but you are screwed. Those individuals "helped" by this so-called bailout will be hating life in the next 2-3 years after they discovered they paid copious amounts of money towards a depreciating asset.

Anonymous said...

One question for HAPPY HOMEDEBTOR..
doesn't setting the new amount at 94% just create a price that the homeowner would now be happy to sell at and walk away clean? Some people will have to move, relocate so many will still sell. So actually the 94% of appraised value would almost immediately become a ceiling on prices which is now 6% lower than current appraised value (moving price even lower)
Please answer me since as a member of 5 different commodity exchanges and the senior officer of a major trading floor I really want to hear what I am missing.

Anonymous said...

The perfect reason why there should be no bailout:

This tardboy bought 9 homes on negative amortized loans.
http://www.cnbc.com/id/24565063

The level of greed/stupidity sometime sis astounding.

Anonymous said...

Happy Homedebtor, aka the mental midget.

Have you factored in the lender inflated home value at appraisal? Because here is how this lender bailout will go down.

Mortgage - $500,000
real home value - $400,000
appraisal by lender for bailout - $475,000

lender agrees to 85% of $475,000

Home value drops another 10% to $360,000 (a minimum 10% drop this year has been forecast by just about every economist).

homeowner walks, lender bailed out, taxpayer on the hook

Get a clue. This bailout plan is for the lenders ONLY, and it is all about the trillions in losses the banks are on the hook for in the derivative market.

It will do NOTHING to help the housing market, only put the taxpayers on the hook for BILLIONS.

Refuse to buy overpriced said...

happy homedebtor,

I would expect you to OPPOSE the bailout.

You always brag about how smart you are, how hard you work etc.

Wouldn't you prefer for your wealth to be based exclusively on your own efforts, not on government intervention in your favor?

If the government intervenes to prop up he value of your home and your stock portfolio, at the expense of the taxpayers, savers, and future home buyers of this country, and you support that government intervention, that makes you a theif. Your wealth is tainted, and you do not deserve the respect of honest men.

Refuse to buy overpriced said...

"And most of the people who would agree with you are too lazy or too poor to take any action/pay attention"

Most of the people who have not yet purchased a home are young, and if they don't do more to fight the bailout its because they are too damn busy working their asses off. They will be rich and have spare time one day, however, and THEY WILL REMEMBER.

Anonymous said...


The perfect reason why there should be no bailout:

This tardboy bought 9 homes on negative amortized loans.
http://www.cnbc.com/id/24565063

The level of greed/stupidity sometime sis astounding.



but but but...we have to help out the little guy once in a while

Reality said...

HappyHomedebtor,

"1. You didn't dispute any point directly, so I'm confused."

Of course I did, on two very specific points:

(1) The alleged "lockup." The bid and ask are not meeting each other. You suggested that government stepping in to provide a bid at 85%-94% of current assessed value would make the market liquid again. My point is, why should the government take on the risk of being market-maker at 85% assessed? The assessed value is nothing sale price in the recent past bubble price level. Market place should lead the price discovery effort, not the other way around having government to name the price at 85%, 94% or whatever. The sellers and bankers are holding up the ask price because they are still hoping for government bailout; as soon as that market externality is eliminated, the market place will be liquid again and resume its function as the price discovery mechanism. 85% level is not even close to anything that can be justified by rental income.

2. What part of "forcing the banks to write down the principal" would be pumping money into the system?

The 85% or 94%-assessed value loan guarantee part. Where do you think the government come up with the money to pay the difference between 85%-assessed and whatever the real capital value is based on rental income? Are you so naive as to not suspect that the banks would quickly hand the most worthless assets over to the government at 85%-assessed? Remember Gresham's law? The clipped coins will have the run of the market place if the government insists clipped ones should be treated at face value; the good ones (in this case, worth more than 85%-assessed) would simply be hoarded by the Portfolio manager.

"Is literacy not something you're fond of?"

Very apt description of yourself.

" At no point did they say 'Here, we're going to hand the bank the 15% equity + whatever you're upside down.' They said 'the bank has to write the loan down to 85% of the current appraised value.'

Look around the market place for yourself. The REO sales are routinely asking only 70% of the current tax-assessed value ("appraised value" by bank appointed appraisers would be even more suspicious, if we have learned anything over the past few years"). That's asking price, not market clearing price. Who do you think will make up for the 15+% difference in your scheme if the govoernment takes that house for 85% of tax-assessed value when the house can't even sell for 70% in the market place? Government money printing, right?

"As for your spouting on needs/etc - you've obviously never taken an economics course or studied much of anything related to finance, so I'll forego trying to explain your baffling unfounded rantings on that."

I actually took quite a few formal economics classes, and large portion of my own income is from financial portfolio management. You are spouting a bastardized version of Keynsian economics, which has already proven disasterous back in the 70's. The economy is not about shuffling monetary aggregates like a deck of cards and for no purpose whatsoever (otherwise, why don't the government just give a billion dollars to everyone? would that jump start the economy?). Economy is about efficient allocation of finite resources. Government transfer of wealth from responsible individual to cover the gambling debt of irresponsible one would be a disasterous course of action.

Reality said...

Homedebtor,

"They are *insuring* the principal."

Pray tell, what magic does the government have that can "insure" anything? Besides cranking the money printing press? Any government effort to reflate the a busted bubble like housing would only lead to bubble in other places (i.e. inflation; read up the real definition of inflation: money supply). Greenspan did not even formally "insure" stock market; yet his "Greenspan put" was enough to cause the giant housing bubble when he tried to reflate the busted stock market bubble . . . or for that matter the tech stock bubble to begin with when he tried to underwrite a "put" under the emerging markets in 1997-8. Those were not even formal insurances, just a hinted speculative "put option" (i.e. insurance). Can you imagine what a formal insurance would be like?

Say, housing prices are going to go down by 50% going forward, if the government step in the way and insist on not a step back, all it will accomplish is to have nearly everything else cost twice as much, so the relative cost ratio at the end of the corretion does not change. The market correction underway is about relative cost/price ratios, so that economic resources can be properly allocated again; e.g. people be induced to get real productive jobs instead of house flipping. That's why, it's either housing price decline, or massive inflation; take your poison. I think housing price decline is much more acceptable than massive price inflation on everything else.

Anonymous said...

Coming near you:

MONTEVIDEO, Uruguay --
Uruguay is restricting electricity consumption as high oil prices and drought complicate power generation in the small South American country.

The plan requires half of all residential elevators, escalators and sign lights to be cut off, and half of all parking and shop window lights to be darkened at stores and businesses. Lighting must also be cut to most nighttime shows and outdoor soccer games.

Months of drought have idled hydroelectric power stations on two Uruguayan rivers, even as world oil prices reach record highs.

Energy official Gerardo Gadea warned Monday that those who don't cooperate with the restrictions could face fines.

Anonymous said...

Let it go folks, this is the future of your country with Obama as president, Democrat majority in Congress and Senate. Prepare the wallet because the ultraliberals are signaling that they're coming for it. California is the lab for the ultraliberals:

California Assembley Member Jim Beall, Jr., D-San Jose has introduced legislation that would increase the excise tax on beer by $1.80 per six-pack of $0.30 per 12 oz bottle. This tax would be levied against the manufacturer, but obviously passed on to the consumer.

Yoski said...

What the bailout will do:
1. Make the lender take an immediate write-down after which...
2. financial risk is shifted from the lender/investor to the taxpayer.
3. It will temorarily slow the price decline due to less foreclosures hitting the market. I anticipate this effect will be realtively minor since we have a lack of buyers and plenty of inventory as is.
4. Fannie, Freddy, FHA will all go belly up within a few years. Imagine if everybody needs a bailout and nobody wants to loan the government any money 'cos Treausries are now rated B-?
5. Faced with the choice of letting those pigs (Fannie, etc) default or print more money we all know the course of action our government will take....gonna get ugly.

What the bailout will NOT do:
1. It will not prevent housing prices from returning to historical price/income ratios (see Japan). It might only spread out the pain of getting there a few more years.
2. It will not prevent future bubbles; it will encourage them.
3. It will not save the economy from going down the crapper. Consumers are broke. There're having a hard time keeping up with food, gas, tution and medical bills. Buying overpriced homes is pretty far down on their to-do list.

In summary, you can't run an economy on selling houses to each other and "securitizing" bad debt. Not gonna work with or without bailout. In the end the only difference is that we'll be even more broke with bailout. I suppose government and "happy homedebtor" are slow learners. It's going to be a painful lesson.

Reality said...

Homedebtor / burger-flipper,

"$500K house
Now worth: $400K (DC area avg price depreciation from peak)
Mortgage goes from: $500K -> $340K
Person who eats the $160K: Lender
Homedebtor: lower payment, lower profits when they sell if house appreciates, ability to move.
House defaults: lender gets their $340K, out $160K still

No housing bailout for HOMEDEBTORS, homedebtor defaults: lender out $150-200K, lower home prices in neighborhoods, ruined credit for family . . . My God, does everyone on this board flip burgers for a living?
"

Speak for yourself (regarding "everyone" on this board flip burgers for living).

1. Credit score is a tool for assessing credit risk based on past credit performance so that interest rate arbitrarge can be done efficiently, right? So what's the point of artificially giving out high scores? It's like giving every illiterate person a doctorate degree would just debase the value of the degree itself.

2. You are dreaming if you think assessed value follow market price change that quickly. "Last comparable" in many places are months old, and hundreds of thousands of dollars higher than the asking price, which is unable to clear through the market place.

3. If your scheme is really so peachy, why is there any need for the government to "insure" the 85% at all? Why can't the bank come to terms with principle reduction with the borrower on mutually agreeable terms already? The whole point about "insurance" is because the houses are worth less than the supposed insured amount; in fact, if a per centage is ever fixed, the lenders will most certainly dig through its portfolio and find the ones not worth the fixed per centage to toss to the government put option.

4. Your math is completely wrong. If the $500k-debt house is really worth $400k on the market place, the bank would have zero incentive to take the $160k loss; why should he when he can foreclose and sell the house for $400k and lose only $100k? Your numbers make zero sense. Either you flip burgers for living or you are just being deceitful and ignoring the obvious. There is no need for bailout or insurance if the houses were worth whatever the per centage such a proposal contains; if put option strike price (per centage) is higher than the real market price, then the government would have to print up the difference in new fiat money, which means break down and lockup in vast tracts of the real economy, especially anything to do with commodities. It's as simple as that.

There is already a safety net for people who are buried by debt: it's called bankruptcy protection. There is already a safety net for coportation owners: it's called bankruptcy protection. Why introduce yet another safety level and get in the way of the market price discovery process?!

Anonymous said...

The crook politicians in California destroyed their state with ultraliberal communist programs, and now want to increase taxes on everything to pay for their failures. Vote all those crooks out of office! Get ready for Obama's new America:

Broke California May Tax Beer, iTunes, Sex Toys

A $1.80 tax on every six-pack of beer. An iTunes sales tax. A 25% tax on sex toys and pornographic entertainment. These are just some of the more creative measures put forth by California's Democratic lawmakers to close a budget shortfall estimated at $20 billion, the Los Angeles Times reports.

The Dems face stiff opposition from Republicans, who have vowed to stop any tax increases. But the economic reality remains: "If we don't do some of these things, we are going to have to cut nearly $5 billion out of schools,” says Charles Calderon, chairman of the state’s revenue committee.

Anonymous said...

I think that you should focus on your Brit or Australian mess first. What do you care about our US affairs and candidates, if you're not even an American living in he US? How do I know? Americans don't write "realise", Brits and Australians do. Or you could be one of those Muslim parasites who live in Britain, sucking English taxpayer money and Universal healthcare while bitching about everything.

yeah, great way to miss the point xenophobic d!ckhead. This is how you irrational warpig f*ckheads debate. You know that your opinions are completely illogical and you don't have a valid argument so you resort to personal attacks reaching so far as to analyze spelling!!

Here's some more info on your boytoy crazy f*cker McShitStain Insane Songbird McCain:

McCain and Advisors: We need to bomb more foreigners!!!

Anonymous said...

Blogger sez:
"Sorry, the blog you were looking for does not exist. However, the name housingfucktards is available to register! "

Just sayin...

Anonymous said...

The perfect reason why there should be no bailout:

This tardboy bought 9 homes on negative amortized loans.
http://www.cnbc.com/id/24565063

The level of greed/stupidity sometime sis astounding.

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

what an idiot! he had 800k at age 37. He was on track for a cushy retirement but i doubt that would have been the case, even if he hadn't blown it all on those 9 homes. The dork probably would have left it in company stock options and watch it all go bye bye eventually.

Anonymous said...

Happy Homedebtor said...

"At no point did they say 'Here, we're going to hand the bank the 15% equity + whatever you're upside down'. They said 'the bank has to write the loan down to 85% of the current appraised value'. So your argument on hyperinflation/everything automatically fail."

No, there's nothing in the proposal specifying 85% of current independently appraised value is the starting point. It could be 85% of the original appraised value when the loan was given, or 85% of the lenders' wishful thining appraised value--either of which would much higher than the property could now fetch on the open market. This bailout, which is explicitely designed to keep prices up (the sponsors say so themselves, over and over), rewards both the lenders, whose collateral is only worth a fraction of what they thought and still claim, and the pseudobuyers, who gambled with other peoples' money.

Incidentally, banks and mortagage companies buying back their crap at fake auctions at full wishing prices (since they don't actually have to pay themselves) are simply keeping the imaginary values on the books so their stocks don't crash and their investors don't sue them. Getting the government to insure these properties at 85% of their phoney value would be the biggest welfare ripoff in the history of the world.

Even 85% of current INDEPENDENTLY appraised value would be a crock, because prices are falling and have a long way to get before hitting reality. These fools who bought properties at 4-10 times their actual value because a. they were too stupid to know what things were worth, or b. because they weren't risking their own money, and would do anything to get in on the gold rush--these fools need to held responsible, as do those who enabled them.

Democrats claim public opinion polls show a majority of Americans favor a bailout. The question needs to be addressed to American taxpayers only, not to welfare recipients, who have nothing to lose. I suspect that a majority of Americans who pay income and property taxes would have a very different view on bailouts.

Anonymous said...

Happy Homedebtor.

Regardless of whether or not there is a bailout your house will still fall in value.

Bailing out the FB's doesn't put money into the hands of buyers who might want to buy your debt trap.

Don't believe me?

Try selling.

Think the market will bounce back?

just like you said...wish in one hand...

Happy Homedebtor said...

Re anonymous 8:57pm:

First off, I'm pretty sure your claim of being a commodities trader is BS, but we'll assume for argument's sake you're the one Keith-ite who's telling the truth for now.

What you're missing lends to my disbelief that you're a trader/know much about our economy: allowing people to move is GOOD for the economy. Let me recap one last time:

People stuck in homes:
Not spending $$ to improve or furnish home since they're busy looking to move/get out, throwing money at a bad investment is bad, saving up to buy/find their way out intsead of spending, etc. This all leads to lower economic activity: no spending

People able to sell:
Homes sold/bought (Maybe the homedebtors don't buy again, so we'll just assume they go to rent)

The buyers: want to do improvements, want to furnish, want to decorate, pay movers, etc etc. This leads to sales/economic activity.

The sellers: No longer burdened pinned, and like good little stupid consumers will piss away money left and right since they're no longer burdened with this gigantic money-pit. This leads to sales/economic activity.

The others: House sold = real estate commission. Loan closed = mortgage broker's commission, bank loaning money/increasing money-flow, appraisers get paid, etc etc.

So this bill:
1. Bails out HOMEDEBTORS
2. Acts as a insurance policy for banks: guarantee a 32% loss (based on 20% depreciation and then 15% off for the program) on a loan, but protect against catastrophic loss via foreclosure and cemented toilets/hackjob/etc.
3. Offers the potential for increased economic activity
4. Costs the American public very little (1% projected cost of the rebates people got/are getting, 10% of that cost even if they're off by an order of magnitude), and will generate revenues for the FHA/gov't via insurance premiums and shared profits on homes that are lived in for longer.

That's what you missed - while Keith-ites hate anyone else making a dime anywhere from them, guess what? That's the situation we're in - the %ages might be a bit silly, but the transaction costs/etc are still there, which will stimulate the economy and benefit all of us - some more than others.

Now, if you still don't get it, my initial assumption that you're telling the truth about your job would be proven incorrect, because that's the basic rules of how our economy works in reality.

Anonymous said...

"They will be rich and have spare time one day, however, and THEY WILL REMEMBER."

Like the Boomers who lived through the gas shortages of the 70's? Oooh! Or people who wrapped themselves in flags after 9/11? Yeah, they'll remember all right...they'll remember they were always going to settle down and buy a house...and then somehow 20 years passed by.

Don't kid yourself...one day, they will be like everyone they position themselves as hating right now. You know, the whole thing about being young, liberal, anti-establishment, etc., and what happens when you grow up?

Nick said...

Keith, you are a MAJOR JACKASS. You say you will find their offices and hound them, vote them out of office, etc... YEAH RIGHT. Most Americans don't give a shit except getting laid, getting drunk, and watching American Idol. Also, NO, you are not the majority. In most polls conducted, half of Americans support a bailout and the other half doesn't. So what the hell are you talking about man?

Anonymous said...

The program is expected to help 1 million people while there will be an estimated 8 million foreclosures through 2012. Of the 1 million who qualify, many will end up in foreclosure anyway due to second liens and HELOCs which aren't included in the bill.

Anonymous said...

How do I know the bailout will work and save housing prices from falling further?

Simple. All you bitter idiot renters are opposed to it. You all contradict yourselves. On one hand you say it won't work. Then you are up in arms about it bailing out people who shouldn't be bailed out. If it will truly be as unsuccessful as you claim, you should have nothing to worry about. Yet here you are signing petitions, writing your congressman and sending Bush emails. Actions do speak louder than words and your actions tell me you are all scared shitless that you missed out and will literally be priced out forever thanks to the bailout.

Reality said...

HappyHomeDebtor/Burgerflipper,

"allowing people to move is GOOD for the economy."

Yes, it's called jingle-mail, and renting in a new place.

"People stuck in homes:
Not spending $$ to improve or furnish home since they're busy looking to move/get out, throwing money at a bad investment is bad,"

The 85%-94% "insurance" to keep housing price high would exactly serve to get people stuck and overpaying mortgage. Indeed, throwing good money after bad investment is bad. People who find themselves upside-down should walk, and go rent a comparable house for far less than the mortgage payment. . . then they will have much more money to spend on other things. The whole "bail-out" attempt is trying to shackle people to a high mortgage payment. What's more, it's an attempt to take money from the prudent to throw at the idiots whose mortgage and loan portfolio have gone bad. Talk about throwing good money after bad!

"The buyers: want to do improvements, want to furnish, want to decorate, pay movers, etc etc. This leads to sales/economic activity."

The buyer will have even more money to spend on furnishing and decorating if the housing price come down to normal levels. That's why we need to say no to all bailout attempts, so that prices can come down quickly, instead of having banks and debtors holding onto the false hope and locking up the market.

"The sellers: No longer burdened pinned, and like good little stupid consumers will piss away money left and right since they're no longer burdened with this gigantic money-pit. This leads to sales/economic activity."

They are relieved of the burden when they get foreclosed and go rent. If they are really stupid, they really should have less resources to piss away. It will be better for the environment, too. Pissing away resources does not a good economy make.

"The others: House sold = real estate commission. Loan closed = mortgage broker's commission, bank loaning money/increasing money-flow, appraisers get paid, etc etc."

The last thing we want now is more realtors and more mortgage brokers. What do you think the massive bankruptcies in the REIC industry mean? There were too damn many paper shufflers in the industry; that's why many of them had resorted to unsustainable underwriting and even fraud to turn a buck . . . just like all the internet companies giving away their services and products at loss or through vendor financing in the name of volume growth in 1999! By your logic, the government should have stepped in and insured all the shareholders of companies like pets.com??

Reality said...

HappyHomeDebtor/BurgerFlipper,

"So this bill:
1. Bails out HOMEDEBTORS"

There is already a program for bailing out homedebtors; it's called bankruptcy protection. Look it up.

"2. Acts as a insurance policy for banks: guarantee a 32% loss (based on 20% depreciation and then 15% off for the program) on a loan, but protect against catastrophic loss via foreclosure and cemented toilets/hackjob/etc."

This is completely nonsensical. The loans that the banks will be handing over to the government will be far more than 20% depreciated. Use your brain for a change: would you give me something worth $1 in exchange for 85 cents? Even if you had paid $1.20 for it at the beginning? of course not; the losses would have to be much higher to begin with, or the "insurance" would be completely unnecessary. What about cement toilet? Arrest the homedebtor for vandalism, or suck it up and pay $20k to have a completely new plumbing system . . . either way, beats the heck out of having the taxpayers on the hook for $850k for a million dollar house that once sold for $1.2mil (or $1.5mil for that matter, as a 30-35% depreciation has already taken place among many of those houses). Frankly, prosecuting homdebtor for vandalism is a far better of the two: by your own logic, the building of prisons and hiring of guards will all add to new jobs and economy will flow again based on debtor prisons; tongue firmly in cheek, but hey, prisons are probably no less productive than realtor or mortgage landing offices; why not prop up the prisons, where you know frauds are less frequent and the bills are predetermined.

"3. Offers the potential for increased economic activity"

See above for prison building for debt vandals.

"4. Costs the American public very little (1% projected cost of the rebates people got/are getting, 10% of that cost even if they're off by an order of magnitude), and will generate revenues for the FHA/gov't via insurance premiums and shared profits on homes that are lived in for longer."

I want what you are smoking. The mortgage debt runs into tens of trillions of dollars. If an insurance would cost that little money, why isn't Warren Buffet buying the mortgage insurance business instead of explicitly excluding the mortgage insurance part of any company that he is interested in acquiring? You have no clue how econmics or finance works; not surprising, as otherwise you would not have turned yourself into a homedebor at the top of the market to begin with.

The really sad part is, all the talks about bailout is making underwater homedebots keep paying for a bad debt that they should really walk away from for their own good.

Reality said...

"You all contradict yourselves. On one hand you say it won't work. Then you are up in arms about it bailing out people who shouldn't be bailed out. If it will truly be as unsuccessful as you claim, you should have nothing to worry about."

There is no contradiction at all. Intead of bailing out homedebtors, the bailout will cause a new bubble in an entirely different area of the economy; most likely commodities . . . and that will make lives a lot harder for a lot of people, and cause social instability. While I have a good stock of bullets, I'd rather prefer not having to shoot people in order to safe-guard my food stockpile for my own family.

Did the stock-market bailout of 2001-2005 succeed in bailing out the NASDAQ dot-com bubble? Of course not. Instead, the 1% interest bailout worked to cause the housing price bubble. That's the nature of bubbles: the busted bubble won't attract new money; any new money distributed by the FED and federal government will be quickly diverted to chasing new bubbles.

Anonymous said...

Oh but exploding deficits. free trade for special interests groups, unregulated free market capitalism that got us into this mess, and bailouts for Bear Stearns are O.K. for you freaks but refinancing loans for middle-class is not? Please get your heads examined.

Anonymous said...

Hey Barny you are a flaming IDIOT lol. Maybe you have contracted something from one of your boys that is eating away at your brain? L o L. 14