July 08, 2008

Folks, it's time for you to understand, the situation is dire. And a massive taxpayer bailout of the GSE's, banks and lenders is now upon us.


The situation is dire.

Remember that, as what happens next happens.

The situation is dire.

Having the nations' housing 'wealth' destroyed is catastrophic, especially since we're a nation of spenders and not savers. And having home values plummet 20% to 50% or more is devastating.

But having the banks fail, that's a whole different ballgame. Having Fannie and Freddie collapse, that's financial Armageddon.

So our leaders and our central bank, having gotten us into this mess, are going to do whatever they can to get us out of it. Which of course is not possible - since home prices have already collapsed, millions of homes sit empty or foreclosed, hundreds of thousands of REIC have lost their jobs, and the damage has been done.

But financial Armageddon can be avoided, moral-hazard-be-damned, if they can stop the banks and GSE's from failing. And they can. It's just gonna take billions and billions and billions and billions of taxpayer dollars to do it.

And that's where we are today. Countrywide is gone, and Angelo is retired and soon on his way to jail. Indymac is no longer a going concern, and is now essentially just closing up shop. Fannie and Freddie are also no longer going concerns, but we're just pretending they are because it makes us feel better.

And now, without massive, and I mean MASSIVE taxpayer intervention, this whole house of cards could come tumbling down even worse than people expect.

So get the printing press going. The bailout is here. Resistance is futile.

But a bailout won't put a floor under house prices like some trolls here spout. It won't put food on the realtors' tables. It won't save the already-destroyed mortgage broker profession. And it won't allow the builders to start building (and hiring illegals) again.

A $8,000 tax credit for first-time buyers is nice, but good luck getting loans. Allowing BofA to sell off their crap Countrywide loans to the US government, that'll stop BofA from failing. And raising Fannie and Freddie's caps might stop some McMansions from going into foreclosure. But home prices will still come down to their natural level. Nothing can stop that now.

The bailout is here HP'ers. We lost that battle. The situation is that dire. And your hard earned money sent to the government in the form of tax payments is going to be blown on a mess that should never happened.

Throw the bums out. All of 'em.

Mortgage rescue plan draws Senate support


IndyMac Complains of Run on the Bank After Senator's Comments


Why the troubles at Fannie and Freddie are yours

45 comments:

Mark said...

Hmmmm...

And the congressional approval rating just reached an all time low of nine percent (that would be a democrat controlled congress) according to Rasmussen Reports.

PS The Bush approval rating is more than double of the congress!

Anonymous said...

Thank that asshole FDR for creating Fannie Mae, Freddie Mac, and HUD/FHA so the banks can dump their crap loans on taxpayers.

Lost Cause said...

It was good business for the Bush family in the 1980s. Why is it always, when a republican is in charge, we suddenly find all of the banks empty?

George W. Bush = WORST and Dumbest EVER said...

WELCOME TO BUSHCO-CHENEYBURTON, INC

"Congress and the White House are counting on Fannie, Freddie and the Federal Housing Administration to prop up the mortgage market as other financial institutions shun what they see as a treacherous business. Fannie and Freddie "are critical to keeping the economy going," said Frederick Cannon, chief equity strategist at Keefe, Bruyette & Woods in San Francisco."

"After rebounding from midday lows, Fannie shares were down $3.04, or 16.2%, to $15.74 on the New York Stock Exchange, while Freddie stock was down $2.59, or 17.9%, to $11.91. It was the lowest close for Fannie since 1992 and the lowest for Freddie since 1993. In the past year, Fannie shares have lost 76% of their value, while Freddie is down 80%."

"In a worst-case scenario, if Fannie and Freddie couldn't handle their obligations and the government had to rescue them, the companies' shares probably would be worthless, said Josh Rosner, an analyst at Graham Fisher & Co., a New York research boutique."

"In the past year, Fannie shares have lost 76% of their value, while Freddie is down 80%."

Any Questions, Sheeple?

You are so hopelessly fucked you cannot even imagine what is coming.

Locked and Loaded and READY.

vanilla ice said...

At least gas prices will keep going up.

The nice thing about the most recent bailouts and the ones to come will be the side effects. UnKle Ben probably didn't think oil prices would rise into space when he made his rate cuts last year.

There's no easy out. We're toast like the picture from the previous post. I will enjoy the coming mayhem we brought on ourselves.

Anonymous said...

finally one of you bitter renting tools gets it. enjoy the 1 bed 1 bath shithole CHUMPS!

brokersleaveyoubroke said...

And just in the nick of time the fed announces they're going to put new rules in place to protect home buyers in the future. Talk about closing the barn door after the horse got out, the horse is not only out of the barn, it ran in the road and got hit by a semi. even funnier is that Greenspan says there's nothing the fed could have done to prevent the housing mess. Now the fed says they're going to do something. Did Greenspan work for a different fed? Is he, gasp, full of sh!t?

Anti-realturd said...

Housing bailout...I cannot even say it with-out having to spit that nasty taste out of my mouth.

Vote them all out...Let the new blood rip America off for a few years.

FDR's Brother-in-law said...

Hey, the government is doing the best they can, this could not have been seen, just like 911, or Pearl Harbor.

In Allah we trust said...

Is that the new US flag? I thought we were getting a flag with a cresent moon on it...

Anonymous said...

Well that was obvious 3 years ago! No shit Sherlock. Boy, all that ammo, food, gold and silver stashed in that cave up yonder is starting to look better and better. Got gold? Got guns?

keith said...

Remember when people thought we were crazy for saying stuff like this?:

http://tinyurl.com/5nknha

We're All Homeowners: Nationalization of Fannie, Freddie Unavoidable

Ed G. said...

So we'll probably have to send more greenbacks to the feds so they can paper the insides of the crumbling buildings that used to be called banks.

Fine, let them have them. Not like the dollar is worth anything anyways.

ilikereylestate said...

"Well that was obvious 3 years ago! No shit Sherlock. Boy, all that ammo, food, gold and silver stashed in that cave up yonder is starting to look better and better. Got gold? Got guns?"

HAHAHAHAHAHAHA oh so funny but true my stomach hurts. hey i took a raffle in my construction company to find volunteers to cain members of congress, excluding 36 of them or so, in a park of their choice. you know what all my workers volunteered to do the caining and one volunteered to build a wood shed to get especially freaky with the ones that control the banking and finance sector.

shtove said...

Keith, what you're describing is Soros' playbook, from the conclusion to his New Financial Paradigm. Although he's in favour of the bailout.

Just read the approval figures for congress in your top post. I have no idea what's going on or what's going to happen to democracy.

Incompetence said...

"It won't put food on the realtors' tables. It won't save the already-destroyed mortgage broker profession. And it won't allow the builders to start building (and hiring illegals) again."

This is not a bad thing. The last thing that we need to see again is SUV driving mortgage slugs drivng around and asking "If your paying more than 3%, your mortgage is too high". And the illegals, well that problem needed to stop. And the builders not being able to build again (due to insolvency) is ultimately an automatic floor in pricing because of simple supply and demand and poetic justice too.

I do have to disagree with this statement though "But a bailout won't put a floor under house prices like some trolls here spout." And here is why - psychology - simple psychology. If this bailout clears the banks books of these mortgages, then the government can modify them. Once they are modified, it is estimated that at the new principal amounts (based on today's low appraisals) with fixed rate mortgages, most (not all, you can't fix stupid in many cases) people that truly were abused by the fraudsters, will be able to make their payments and these mortgages might actually have value later on.

This will put a final number on Banks balance sheets and stop all the back and forth between all the "analysts" each competing to trash the other banks balance sheet. I am not fan of the banks, nor do I have stock in any, but I am sick and tired of seeing my 401K killed daily because of Mark to Market accounting spouting "analysts" driving down the banks, and with it, every other stock in the entire market. Most of the losses the banks are taking now is a continuing spiral of lower house prices, due to lower market sentiment, bringing lower house prices bringing even lower market sentiment...on and on and on. It is worth it to me to pay for the housing bailout simply so those of us that had nothing to do with any of this nonsense can quit being victimzied by the callateral damage of bad choices made by a few major Wall Street banks. Now, I do think that as a provision of the housing "bailout" there needs to be a requirement that the FBI investigate ALL of the fraudsters that brought this mess on our nation. Of course Angelo, and also the likes of Chuck Prince, and various other heads of these "investment banks" that brought us all these "derivatives".

I agree that this bailout is BS, unfortunately due to the original incompetence of our "leadership" in the first place, it is now a necessary evil.

Anonymous said...

I wonder if our friend over at global economic analysis, mish shedlock, thinks that massive government bailouts are inflationary? it looks like they are going to try and print their way out of this mess....

Don't blame anyone but Bush said...

"Thank that asshole FDR for creating Fannie Mae, Freddie Mac, and HUD/FHA so the banks can dump their crap loans on taxpayers."

FDR had nothing to do with this mess. The banking system worked just fine through the GSE's for 40 years. All it took was 8 years of GW Bush to cause the implosion. His policies of allowing unregulated markets for bankers gave us the same problem as having unregulated energy markets for Enron. This guy just does not learn. FDR was a hell of a lot smarter than even Bushes big toe, and I seriously doubt if we had leadership these days of the same calibur as the FDR generation, any of this would even be a problem.

Front Lines said...

Vanilla Ice Said

"There's no easy out. We're toast like the picture from the previous post. I will enjoy the coming mayhem we brought on ourselves."

Hey Jackass,

First - get a clue, oil is down 9.00+ a barrel, so gas prices are not going up. Second - I am sick of you people hoping that things implode in this country. I still like living in the USA. Our government is a bunch of incompetent bafoons, but unfortunately THEY are not the ones being hurt by this - normal, everyday people that had NOTHING to do with housing, Wall Street, Hedge funds etc. are bearing the brunt of this, and they ARE NOT enjoying the "Mayhem" "they" brought on themselves.

I do not like our Country being sold to the highest foreign bidder, while our workers continually become statistics. I have seen good neighborhoods become trashed and demoralized because of banks that VICTIMIZED people that only wanted the American Dream and BELIEVED their President. They may be naive, but that is sad to watch, because it just jades an already ultra jaded public and does not make anything easier in the long run.

Instead of wishing armageddon on everyone, why don't you use some brain power and actually help at creating a solution. I have, and I can say that I feel a lot more fulfilled having helped people through tough situations that they find themselves in through no fault of their own.

Get a life.

Vote'em all out in Nov said...

It's long overdue. You know, the Guberment could have saved us all a lot of jobs, time, money and hardache if they would have just Northern Rock-ed Fannie and Freddie about a year ago. Then maybe uncle Benny would not have had to bend to Wall Street and lower rates so our commodity prices went through the roof. At least then the speculators could have continued making money on stocks and not our Oil, Gas, and Food markets. Now we still get the nationalization, but we also have a host of other problems.

Some more quick thinking by our moronic leadership.

Anonymous said...

I have been reading HP for a little over a year now. This is my first comment. We have a government that is mocking us. These assholes are supposed to be representing us. Instead they take our money and redistribute it right in front of our faces. Socialism I would say. Why did I go to college? Why am I about to get a graduate degree? Is it so the couple that lives next door to me who have minimum wage jobs, no education, can't tell if they are legal citizens, have a shitty loan that they will eventually foreclose on can have all the things that I have worked to obtain by getting ahead? The Senate has answered "Yes" to these questions of mine.

I must say that I would not be saddened in the least bit to see a civil war over this. Yes, what I just stated seems somewhat extreme but we the people have an obligation to overthrow our government should it stray from representing the people of this country.

Two problems. The first being that I beleive the government would illegally use our own military against any who rose up to this act. The second is that the growing perception that the "American Dream" is an entitlement, especially now that people are entitled to free houses, has reached a point of no return. Why fight for our rights now that as bad as our leaders are and no matter how bad they can get we still get our huge houses and cars.

I think this is a sad day. We are crossing a line that will be impossible to to go back over without truley historic event.

Anonymous said...

You don't play games with food or shelter . This was a evil housing run up and lending cycle . Who in the hell did people like Mozillo think they were (above the laws) Congress and the Senate are bought out stooges for the fat cats . We are allowing these traitors to our Country to make the laws . Get rid of all of them ,but a few .Abuse of Power by the majority of them . You already know what morons they are by how they vote on issues . They only understand being influenced by big business. They don't give a shit about the majority on Main Street .

Well Main Street is tapped out and the government traitors can't get any more blood out of the middle America rock. They are killing the middle and upper middle classes . The strength of American is going down the tubes . They went to far this time ....they just went to far .

went2puke said...

Hopeless! as long as people (like Mark) think in terms of Dems and Republicans, there's no hope for any change in America.
What more do you need to understand that politicians across party lines are corrupt? The people of America need to claim back the government by throwing those proven conmen and conwomen out of office.

Anonymous said...

"""
But nationalizing the firms, each created by an act of Congress, would mean a wipeout for equity holders, who have already seen their holdings decimated in the past year.
"""

They wish they'd only been decimated.

Anonymous said...

I hate to bath in the waters of misery but we have not really lost fellow HPers. We are not going to avoid financial armageddon. It is inevitable. Our ship has a huge hole in it and we are in the sea of misery. The Senate is using ducktape to try to keep the water from flowing into our hull. The tape will not hold and we will sink. I hate to sound so pessimistic but we know we are fighting a losing battle and we will all drown together, President or lettuce picker, bailed out or not. We stand as a country together all fucked.

Anonymous said...

Apocalypse NOW.

Anonymous said...

How's that 2006 vote going everyone? In 2006 gas was just above $2.50. Now...well you know. Well done Nancy Pelosi. Well done Harry Reid. Well done Hillary. Well done Obama.

Keep up the good work everyone. And make sure you vote in a socialist this november to put the final nail in this coffin of ours.

Anonymous said...

"The banking system worked just fine through the GSE's for 40 years. All it took was 8 years of GW Bush to cause the implosion."

What about the 80's?

"FDR was a hell of a lot smarter than even Bushes big toe..."

Was FDR as smart as BOTH of Bush's big toes? LOL You screwed that one up good!

Anonymous said...

I keep expecting to hear how a bailout will be necessary in order to protect retiree's and future retiree's pensions.

that will get AARP crowd behind it.

bitterrenter said...

Seeing you brainstem republicans try and blame the democrats for this mess after 13 years of republican rule and the most inept presidency in generations is what makes me hate you so much I wouldn't PISS on a republican on fire much less vote for one.

You're the most ignorant miscreants on the face of the earth. If there was a disease wiping you out I wouldn't give a dime to finding a cure, not unlike what republicans did with AIDS.

Anonymous said...

In Allah we trust said...
Is that the new US flag? I thought we were getting a flag with a cresent moon on it...

July 08, 2008 6:11 PM

Islamphobic idiot. Its not Muslim families that run the Federal Reserve.

Anonymous said...

PPT came around 2 PM, as usual.

Anonymous said...

"...Get a life..."

Fuck you...with a smile. ;^)

This cuntry needs a good ass-kicking; I can't tell you how much I enjoy seeing it.

"...I am sick of you people..."

We're pretty sick of assholes like yourself as well. Better brace yourself.

RBS called it, and it is fast approaching.

Anonymous said...

The sky is falling. Eee. The sky is falling.

Admin is a total nut job.

Anonymous said...

More giants financial waves of Kagunga slap us in the face every day and in every way.

I say, "hey, kick their moronic asses out of Congress and the Senate."

Still, the systemic illusions and delusions of financial grandeur have grabbed the goose by its gristle and gander and struck a Milk Thistle in it's collective gullet.

I, for one, say stand like a man you little mouse!

Fight on soldiers! Fight and sing verily unto thee!

Mozilo must go to jail and become the cell ward main squeeze. Justice demands this!

Throw in Jim Cramer, too!

Andrew Hac said...

What have I stated over and over again for two millions six hundred thousands nine hundreds and eighty eight time ? Answer: The Americano is so FOOKED that it is becoming funny just to watch them squirmed like a squashed, run-over squirrel on a hot asphalt road.

-----

Yes, it is the time to pay the Piper for that Wild-Wild-West Housing Bubble Party last night. Add in the maxed out CC debt, the home equity extract, the I-ain't-got-a-job-now moaning and lamenting, the spend-like-there-is-no-tomorrow mentality of the Americano, the oversize chicken barn SUV, the run-down-the-cow F250 pickup truck and the Americano is now having a handful of shits, pukes, and hangover biles to deal with. $200.00/barrel of oil in New Year 2009's... It is coming and it is coming right soon...

But worry not, my dear fat-ass buckteeth Americano, Dubya Shrub will lead you through the dark, ominous, pee-in-the-pant time. He has to, he has no choice, since the dim nitwit Americano voted for him 2 terms in a freaking-ass row. Yes, it is fittingly beautiful: "The head turkey leads the horde of wacka-doo-doo, BORKAFATTY, blind turkey down the gutter...".

Now, a little verse from the "Man With The White Beard" to cheer things up for the horde of Snapper Turtle, Porpoise, Armadillo, Raccoon, Opossum, Porcupine, Skunk, and "BORKAFATTY" AKA :::The Pig:::

Psalm 23:4

"Yea, though I walk through the valley of the shadow of the Housing Bubble,
I will fear no foreclosure:
for Dubya Shrub & Penis Shooter art with me:
thy bail-out and thy rebate-check, they comfort me."

Kent said...

Keith, The losses aren't billions - they're TRILLIONS. We had $8 trillion in real estate value added between 2000 and 2006, all of that was borrowed against (if we look at mortgage debt growth vs. value increase). Now the $8 trillion (or at least $6 trillion) evaporates, and the loans are left standing. The entire net worth of all US banks is only $1.3 trillion, by comparison (see www.fdic.gov, bank data). All the banks and Fannie and Freddie are broke...No one wants to say this for fear of ....????

Anonymous said...

Thank you Democrats for pulling us out of Iraq and lowering the price of oil. That 9% must be from the family and friends program. Only you fools in Congress could make Bush look good in comparison.

Vote for Obummer and grab the ammo.

Anonymous said...

attention HP'ers:

once the bill is signed into law (housing bailout) that will be the end of the cause we HP'ers are fighting for. we will lose to lereah, yan, and even suzanne.

Think about it said...

Please, I beg you:

DO NOT use George Bush and FDR in the same sentence.

Only link Bush with fellow travelers like Hitler, Stalin, Mussolini, Pol Pot, Saddam Hussein Karl Rove, Donald Rumsfeld and all the other scum of the earth in recent history.

Leave FDR alone ferchrissakes. FDR kept his handicap from the country for 11+ years. Stupid revolving asshole Bush cannot even get off a stage by himself. Think about it.

Really, there is NO comparison of the two men.

Anonymous said...

FDR = POS

End of story.

Anonymous said...

I just wish TSHTF happens soon.

Let's get on with it so we can recover as a better strong nation.

Or is that too much to ask for?

LauraVella said...

Kent said: "The entire net worth of all US banks is only $1.3 trillion, by comparison (see www.fdic.gov, bank data). All the banks and Fannie and Freddie are broke...No one wants to say this for fear of ....????"

-----

Exactly right Kent. When will it be "mattress time" is the question.

Anonymous said...

Does the 9% approval rating surprise anyone? Hello, Americans voted in ALL of the people currently in Congress and...they voted in Bush! It's very funny - up to about two years ago not many people criticized Bush and the government (not politically correct) since they were making $$$$ hand over fist. But, when the economy started to falter, everyone's attitude changed.

Americans now preach patriotism, change, bipartisanship, frugality, morals, GOd...give me a break it's all bullshit and you know it. All the whining is because the majority of Americans have to pay $4.50 for gas and they're stuck in some 3 ton SUV. Would you like some cheese with that whine, Garcon?

At least I am a REAL independent and I voted for Badnarik. I don't understand how you people can call yourselves libertarians but you glorify FDR and all of the other politicians. Why do you care if housing or gas or whatever are sky-high? Why? I thought libertarian meant "live and let live". Why do you care if Mexicans pour over the southern border? I thought libs didn't believe in government regulation of the economy or people's personal lives. I'm just being the devil's advocate here. If everyone online who blogs is some kind of gungho libertarian patriot, then why do you stink at it so badly?

I find it funny that so many people want a revolution now. I'm sure that if you did gang up on DC that it would fall, but do you really think there will be no casualities? I'm sorry but war is not rated PG-13. Most Americans watch way too much TV; go to a country where civil war is actually happening and see if your average couch-potato American has the mental or physical fortitude to carry out such an endeavor.

Unlike most people, I think the US government is a paper tiger. However, I can't imagine you people advocating for bloodshed over $4 gas. If this is the voice of the middle class, then GOOD RIDDANCE TO THE DISAPPEARANCE OF THE MIDDLE CLASS.

Anonymous said...

"..."Yea, though I walk through the valley of the shadow of the Housing Bubble,
I will fear no foreclosure...
thy bail-out and thy rebate-check...comfort me."..."


Can't. Breathe. Laughing so hard.

"...Americans now preach patriotism, change, bipartisanship, frugality, morals, GOd...give me a break it's all bullshit and you know it..."

AMEN, brother.


Nothing funnier than we so-called conservatives pining for a socialist reprieve and Big Government(on somebody else's dime.)