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.
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Why the troubles at Fannie and Freddie are yours
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.
Posted by blogger at 7/08/2008