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Geroge Bush is a ****ing retard
Yeah, that's right, I said it. His latest plan to try to bail out homeowners and investors who took out subprime mortgages is simply the latest in BAD policy decisions. Now, I don't know that any of it will get passed, but it is the WRONG thing to do. Yes, this is painful for a lot of people to go through, but this pain MUST be felt in order to get back to any semblance of normalcy. Otherwise it just delays the inevitable, puts undue burden on responsible taxpayers to bail out those who were irresponsible. So today, I give Dubya a big middle finger for his head-first dive into the waters of moral hazard. Smart people are losing money over something that morons helped to create.
OOOhhh--he said it's not the government's job to bail out speculators! He's only semi-tarded.
rove leaves and our boy goes socialist
Current way things are shaping up, seems to be one of the lesser sins of Emperor Busho.
I don't disagree with Shakka, except that I see it as being not so much the product of morons, but greedy people who knew full well what they where doing and because of what appears to be zero regulation. Made some fast bucks throwing together dodgy securities, a nice mix of prime and sub-prime mortgages so it didn't appear to be too rotten at the core.
Sold them off and got out before the balloon burst and they probably made out like absolute bandits. Most of the finance sector investors hoovering up the securities also probably had a fair idea they where going to pop, just not sure so many of them saw it coming so soon and didn't get to offload them quick enough when the defaults skyrocketed.
Dunno, where is he getting all the dollars for this with 2 conflicts on 2 separate fronts, most of hurricane Katrina's mess still all over the shop, economy taking a severe beating and the euro on a rampage?
If anything I think dabbling in this kind of thing is likely to trigger a bit of another downturn simply out of 'no confidence' in the American markets 
Poor old taxpayers are going to feel like a pinate soon...
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| Originally posted by Lilith Current way things are shaping up, seems to be one of the lesser sins of Emperor Busho. I don't disagree with Shakka, except that I see it as being not so much the product of morons, but greedy people who knew full well what they where doing and because of what appears to be zero regulation. Made some fast bucks throwing together dodgy securities, a nice mix of prime and sub-prime mortgages so it didn't appear to be too rotten at the core. Sold them off and got out before the balloon burst and they probably made out like absolute bandits. Most of the finance sector investors hoovering up the securities also probably had a fair idea they where going to pop, just not sure so many of them saw it coming so soon and didn't get to offload them quick enough when the defaults skyrocketed. Dunno, where is he getting all the dollars for this with 2 conflicts on 2 separate fronts, most of hurricane Katrina's mess still all over the shop, economy taking a severe beating and the euro on a rampage? If anything I think dabbling in this kind of thing is likely to trigger a bit of another downturn simply out of 'no confidence' in the American markets Poor old taxpayers are going to feel like a pinate soon... |
Oh you know how it is, anything a politician can be seen to be doing to help out the little guys that vote for them is extra love-ins at the polls later on. Doesn't matter if they're Dems, Reps, or independants, all the same shade when it comes to greasing up some votes with some 'green'.
Heck, they don't care where the money comes from, doubt any of them really considered it too much and Joe & Jane Voter looking to pay off the trailer they bought on a sub-prime haven't considered where it's coming from at all! 
(Oh they definitely don't give a damn!)
***looks for pigs flying***
Wait, you mean it's not ok for the party of personal responsiblity and fiscal conservatism to force tax payers to bail out janitors who buy $1,000,000 homes (or more importantly the lenders who made it possible)??? Shocked! Shocked I tell you! 
Although I'm still convinced that there's an even bigger elephant in the room ... something to the tune of half a trillion dollars to a trillion by the time it's all over. Oh yea and and all those people that never make it back from their vacation abroad.
So if I'm to understand you correctly, Bush is essentially keeping the much-needed correction in the market from happening by giving more tax-payer welfare to the bank and lending industries?
On a side-note, the Mrs. and I are still renting because of this whole mess right now. We're waiting for the prices to keep comin' down or level off before we jump in. My sister in-law bought a house with her husband about 2 years ago, and she told me how ridiculous she was being hassled by lenders on these variable rates and 1-yr no-interest loans. She wisely grabbed a fixed rate loan at a terrific rate instead.
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| Originally posted by MisterOpus1 So if I'm to understand you correctly, Bush is essentially keeping the much-needed correction in the market from happening by giving more tax-payer welfare to the bank and lending industries? |
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| On a side-note, the Mrs. and I are still renting because of this whole mess right now. We're waiting for the prices to keep comin' down or level off before we jump in. My sister in-law bought a house with her husband about 2 years ago, and she told me how ridiculous she was being hassled by lenders on these variable rates and 1-yr no-interest loans. She wisely grabbed a fixed rate loan at a terrific rate instead. |
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| Originally posted by Shakka I'd keep doing what you're doing. No reason to jump in now when you will probably be able to get a great deal in a year or two. I wish I had done a 30 year fixed when we bought our house, though our rate-reset isn't for a couple more years so I'm optimistic that we'll be ok when all is said and done and that rates will have come down by then (I'm not a believer that the Fed is about to cut rates by any meaningful amount, though I'm concerned that all of the shills out there on Wall Street and around the Beltway may ultimately force Bernanke's hand). Larry Kudlow is worthless. |
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| Originally posted by Lilith Hunt around the rivals and see if they can transfer the loan over into a fixed rate one for you, or just weather the storm because I'd say after enough of a beating, most everyone isn't going to want anything to do with loans unless they can help it and it'll come down again as consumers go into bunker down and saving mode. Which would happen under normal circumstances. In an environment where the government basically rewards folly in the finance sector, well we both know where that ship sails don't we... start bailing! Plan B for you might also involve getting an evaluation on the house, sell it for a profit, find another place to live and punch out but that's usually going to take awhile to move on a market so it's not exactly a short term solution either. At least if the government goes in for this it might cause another housing boom you could be able to make a bit of money off of it instead of bleeding out from the interest rates. |
Nuh-uh, I've had enough of furniture and floor polishing today and my arms feel like they're about to drop off, I've also come to the conclusion cordless drills are absolutely poo for doing anything which takes more than 15 minutes 
The market always straightens itself out, just a case of 'when' and how, personally I'm more in favour of the finance sector working itself out and copping a few well deserved lumps to the head for educational purposes, then the government can do what it does best. Sit around and waste tax payers money making policy to regulate it so it doesn't happen again in 4-5years time when the shock of what's been done wears off and has another bunch of banditos ride in to the do the same thing all over again.
Excerpts from The Price of Loyalty:
This book recounts the tenure of Paul O'Neill as Treasury Secretary under Bush for the first 3 years of the administration...
Excerpt:
It was the afternoon of Wednesday, January 24, the third day of the Bush administration...
O'Neill, as Treasury Secretary, institutionally designated to be the President's leading voice on the economy, offered a fifteen-minute overview on what he considered the informed opinion (that is, his and Greenspan's) and said that they were in the early stages of either an apparently mild recession or a pronounced inventory correction. The key was to remain sober. To watch the numbers. If we look concerned and talk up recession too much, he said, it will depress spending and encourage a downturn. O'Neill explained that the major problem was not the "encumbrances on capital" -- there was plenty of low-cost capital out there, unable to find a profitable home. The problem was on the consumption side. The real numbers, he assured the President, did not support the bleakness of some "economic theorists".
(It was these theorists such as Larry Lindsay who helped push the Bush tax cuts of $1.6 trillion. Remember, we had a $5 trillion dollar SURPLUS left over after the Clinton administration, so in 2000, Bush's people were trying to figure out what to do with it all.)
O'Neill referred to items of his memo. Marginal rate cuts, if they were affordable, should be the priority. He said the tax cut plan, under almost any permutation thus far proposed, wouldn't provide measurable stimulus in the short-term; what would create positive economic effects is "a sense that fiscal discipline has been preserved"--something that should boost equities markets (during the tech bubble crash) and keep long-term bond rates in check. All that left the economy well suited to respond to a rate cut from the Fed.
There were a dozen questions that O'Neill had expected Bush to ask. He was ready with the answers. How large did O'Neill consider the surplus, and how real? How might the tax cut be structured? What about reforming Social Security and Medicare, the budget busters? How will we know if the economy has turned?
Bush didn't ask anything. He looked at O'Neill, not changing his expression, not letting on that he had any reactions--either positive or negative.
O'Neill decided therefore to move from the economy to a related matter. Steel tariffs. If was a simmering issue--the US steel industry was hurting and pushing for protections...
The President said nothing. No change in expression. Next subject.
Certainly, each president's style is different. But O'Neill has a basis for comparisn. Nixon, Ford, Bush 41, and Clinton, with whom he had visited four or five times during the nineties for long sessions on policy matters. In each case, he's arrived prepared to mix it up, ready for engagement. You'de has it out. that was what he was known for. It was the reason you got called to the office. You met with the President to answer questions.
"I wondered, from the first, if the President didn't know the questions to ask," O'Neill recalled, "or did he know and just not want to know the answers? Or did his strategy somehow involve never showing what he thought? But you can ask questions, gather information, and not necessarily show your hand. It was strange."
/Excerpt
Excerpt 2:
The package of tax proposals, led by the 50 percent cut in the individual tax on dividends, had been all but buried before the midterm elections; it came up infrequently and always in the past tense--what George W. Bush wanted to do bu couldn't afford.
But after the Republicans won the midterms, O'Neill could sense a change in the White House, a smugness, a sureness. Now Cheney brought up the tax proposals again, how they would provide stimulus...
O'Neill jumped in, arguing sharply how the government was "moving toward a fiscal crisis" and "what rising deficits would mean to our economic soundness."
Cheney cut him off.
"Reagan proved deficits don't matter," Cheney said.
O'Neill shook his head, hardly believing that Cheney--whom he and Greenspan has known since Dick was a kid--could say such a thing.
He was speechless. Cheney moved to fill the void. "We won the midterms," he said. "This is our due."
There's Bush administration monetary policy for ya.
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| Originally posted by Shakka In reality, he has proposed somehow helping 80,000 homeowners who must have good credit but simply cannot make their new adjustable rate payments (i.e. not a very large portion of the low-end credit spectrum when consensus seems to think that 2-3 million subprime borrowers could be in jeopardy). At the end of the day it's probably more politics than anything, but IMHO, any sort of bailout from something that anyone with 2 eyes and the ability to read should've seen coming for years is just bad policy and delves deeply into moral hazard. |
. Maybe these people with good credit histories should have thought twice before they got into voodoo loans or whatever to maximize their property holdings. Now we have this bilateral system in place where the Bush administration is bailing out home buyers while the Fed is bailing out lenders. The Fed shoud ONLY be concerned about avoiding a liquidity crunch. Fuck the credit crunch even if it leads to a recession, the primary focus are interest rates and avoiding depression. A recession would actually eliminate or purge non-competitive firms from the market and actually free up capital for more productive enterprises. Something I think the US is due for as evidenced by the latest shit going on.
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| Originally posted by Krypton There's Bush administration monetary policy for ya . |
You know me, I'll burn anything, anyone, regardless of political swing if they do a hokey job of it 
)
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| Originally posted by occrider Exactly. And so why do these 80,000 folks even deserve a bailout over teh 2-3 million other borrowers? Oh gee just because a person has a good credit history we should bail them out from being so stupid to get in a bad mortgage unlike the other similarly stupid people with poor credit histories . Maybe these people with good credit histories should have thought twice before they got into voodoo loans or whatever to maximize their property holdings. |
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| Now we have this bilateral system in place where the Bush administration is bailing out home buyers while the Fed is bailing out lenders. The Fed shoud ONLY be concerned about avoiding a liquidity crunch. Fuck the credit crunch even if it leads to a recession, the primary focus are interest rates and avoiding depression. A recession would actually eliminate or purge non-competitive firms from the market and actually free up capital for more productive enterprises. Something I think the US is due for as evidenced by the latest shit going on. |
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Does America need a recession? Aug 23rd 2007 From The Economist print edition An intriguing, if unpopular, thought THE late Rudi Dornbusch, an economist at the Massachusetts Institute of Technology, once remarked: �None of the post-war expansions died of old age. They were all murdered by the Fed.� Every recession since 1945, with the exception of the one in 2001, was preceded by a sharp rise in inflation that forced the central bank to raise interest rates. But today's Federal Reserve is no serial killer. It seems keener on blood transfusions than on bloodletting. When the Fed cut its discount rate on August 17th, it admitted for the first time that the credit crunch could hurt the economy. The markets are betting it will soon cut its main federal funds rate. Economists are arguing vigorously about how much damage falling house prices and the subprime mortgage crisis will do. But there is one question that is rarely asked: even if a downturn is in the offing, should the Fed try to prevent it? Most people think the question smacks of madness. According to received wisdom, the Fed should not cut interest rates to bail out lenders and investors, because this creates moral hazard and encourages greater risk-taking; but if financial troubles harm spending and jobs the Fed should immediately ease policy so long as inflation remains modest. Central bankers should be guided by the �Taylor rule��and set interest rates in response to deviations in both output and inflation from desired levels. A necessary evil But should a central bank always try to avoid recessions? Some economists argue that this could create a much wider form of moral hazard. If long periods of uninterrupted expansions lead people to believe that the Fed can prevent any future recession, consumers, firms, investors and borrowers will be encouraged to take bigger risks, borrowing more and saving less. During the past quarter century the American economy has been in recession for only 5% of the time, compared with 22% of the previous 25 years. Partly this is due to welcome structural changes that have made the economy more stable. But what if it is due to repeated injections of adrenaline every time the economy slows? Many of America's current financial troubles can be blamed on the mildness of the 2001 recession after the dotcom bubble burst. After its longest unbroken expansion in history, GDP did not even fall for two consecutive quarters, the traditional definition of a recession. It is popularly argued that the tameness of the downturn was the benign result of the American economy's increased flexibility, better inventory control and the Fed's firmer grip on inflation. But the economy also received the biggest monetary and fiscal boost in its history. By slashing interest rates (by more than the Taylor rule prescribed), the Fed encouraged a house-price boom which offset equity losses and allowed households to take out bigger mortgages to prop up their spending. And by sheer luck, tax cuts, planned when the economy was still strong, inflated demand at exactly the right time. Many hope that the Fed will now repeat the trick. Slashing interest rates would help to prop up house prices and encourage households to keep borrowing and spending. But after such a long binge, might the economy not benefit from a cold shower? Contrary to popular wisdom, it is not a central bank's job to prevent recession at any cost. Its task is to keep inflation down (helping smooth out the economic cycle), to protect the financial system, and to prevent a recession turning into a deep slump. The economic and social costs of recession are painful: unemployment, lower wages and profits, and bankruptcy. These cannot be dismissed lightly. But there are also some purported benefits. Some economists believe that recessions are a necessary feature of economic growth. Joseph Schumpeter argued that recessions are a process of creative destruction in which inefficient firms are weeded out. Only by allowing the �winds of creative destruction� to blow freely could capital be released from dying firms to new industries. Some evidence from cross-country studies suggests that economies with higher output volatility tend to have slightly faster productivity growth. Japan's zero interest rates allowed �zombie� companies to survive in the 1990s. This depressed Japan's productivity growth, and the excess capacity undercut the profits of other firms. Another �benefit� of a recession is that it purges the excesses of the previous boom, leaving the economy in a healthier state. The Fed's massive easing after the dotcom bubble burst delayed this cleansing process and simply replaced one bubble with another, leaving America's imbalances (inadequate saving, excessive debt and a huge current-account deficit) in place. A recession now would reduce America's trade gap as consumers would at last be forced to trim their spending. Delaying the correction of past excesses by pumping in more money and encouraging more borrowing is likely to make the eventual correction more painful. The policy dilemma facing the Fed may not be a choice of recession or no recession. It may be a choice between a mild recession now and a nastier one later. This does not mean that the Fed should follow the advice of Andrew Mellon, the treasury secretary, after the 1929 crash: �liquidate labour, liquidate stocks, liquidate the farmers, and liquidate real estate...It will purge the rottenness out of the system.� America's output fell by 30% as the Fed sat on its hands. As a scholar of the Great Depression, Ben Bernanke, the Fed's chairman, will not make that mistake. Central banks must stop recessions from turning into deep depressions. But it may be wrong to prevent them altogether. Of course, even if a recession were in America's long-term economic interest, it would be political suicide. A central banker who mentioned the idea might soon be out of a job. But that should not stop undiplomatic economists asking whether a recession once in a while might actually be a good thing. |
Just ran across this in another blog. Nevada is apparently up shit creek right now. Nearly 1 filing of foreclosure out of almost 200 houses. And your neck of the woods in Georgia, Shakka, seems to be hit pretty hard as well:
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| Research out this morning shows foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide. The filings include default notices, auction sale notices and bank repossessions. The figures are the latest measure of the ailing housing market, which has seen defaults and foreclosures soar as financially strapped borrowers have failed to make payments or find buyers. In all, 179,599 foreclosure filings were reported during July, up from 92,845 in the year-ago month, according to Irvine-based RealtyTrac Inc. A total of 164,644 foreclosure filings were reported in June. The national foreclosure rate in July was one filing for every 693 households, the firm said. "While 43 states experienced year-over-year increases in foreclosure activity, just five states - California, Florida, Michigan, Ohio and Georgia - accounted for more than half of the nation's total foreclosure filings," said RealtyTrac Chief Executive James J. Saccacio. Nevada posted the highest foreclosure rate: one filing for every 199 households, or more than three times the national average. It reported 5,116 filings during the month, an increase of 8 percent from June. Georgia's foreclosure rate was more than twice the national average, with one filing for every 299 households. The state reported 12,602 foreclosure filings, up 75 percent from June. Michigan reported 13,979 filings in July, a 39 percent spike from June. http://www.wxyz.com/content/news/fi...8c-ae88096f24ba |
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| Originally posted by MisterOpus1 Just ran across this in another blog. Nevada is apparently up shit creek right now. Nearly 1 filing of foreclosure out of almost 200 houses. And your neck of the woods in Georgia, Shakka, seems to be hit pretty hard as well: So is this what Bush's "Ownership Society" looks like? |
This is one instance where I'm glad our Canadian financial and housing sector is somewhat insulated from the States.
CIBC (Canadian Imperial Bank of Commerce) did loose approx. $250Million I believe due do the sub-prime fall-out though.
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| Originally posted by Shakka ha. Ultimately I place a lot of blame on Greenspan, but Dubya has certainly touted the increase in home ownership rates throughout his presidency. It's amazing how blind some people can be to wreckless manias. And yeah, good ole GA is right up there in foreclosures. Maybe I can get a million dollar McMansion for pennies on the dollar! The sad thing is they continue to build! There are like 25 highrise condo buildings planned to go up in Buckhead alone over the next 7 years. It's insane. About the only positive thing I can say is that our house is in-town where homes tend to hold their value a bit better than in the burbs. But even then, I lose sleep at night. |
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| Originally posted by MisterOpus1 Just curious, but do you think this mess was possibly one reason why Greenspan retired (before the shit started hitting the fan)? |
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