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Forget Instarefi: Here Comes Instaloanforgiveness
As if the main rumor of the prior week, that the government was going to automatically push rates on all mortgages down to market rates (which as of today hit a fresh record low of 4.49%) was not enough, today James Pethokoukis reports that the latest iteration in the "let's make Fannie and Freddie broker than ever" rumor mill is that the "Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth." As readers will recall, we highlighted a few days ago that the number of underwater mortgages is at least 14.7 million (and likely far more), and amounts to just about $770 Billion in underwater equity. In other words, if the rumor is true, the US taxpayers are about to subsidze over three quarters of a trillion in underwater equity (and bail out banks on the hook for over $2 trillion in impaired debt). There is no indication if the "instarefi" plan contemplated by Morgan Stanley and Merrill Lynch has been scrapped, but what is certain is that the two plans target two very distinct beneficiary groups: the former plan would mostly benefit middle and upper class mortgage holders who are likely preoccupied to bother with a 200-300 bps refi differential. The loan absolution plan, on the other hand, focuses squarely on the poorest 15 million US households of society. While it is distinctly possible that Obama, in all his economic lunacy, will pass both plans, his advisors have likely done the math and are now convinced which way the negative IRR to the taxpayer will be greater: that is certainly the plan that will be undertaken.
Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.
The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.
Keep in mind the political and economic context. The nascent recovery is already running out of steam. Wall Street economists just downgraded the government’s second-quarter GDP estimate of 2.4 percent to around 1.7 percent. And as even Treasury Secretary Timothy Geithner is warning, the unemployment rate may well begin to rise back toward the politically toxic 10 percent level given such sluggish growth. Many in the White House thought the unemployment rate would be dropping sharply by this point in the recovery.
But that is not happening. What is happening is that the president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.
This latest bout of fiscal insanity is happening just as the government is passing yet another $26 billions state bailout package.
U.S. Senate Majority Leader Harry Reid said Thursday the Senate will vote in the late morning to pass a $26 billion aid package to help budget battered state governments with their Medicaid expenses and to retain about 100,000 school teachers.
In remarks on the Senate floor, Reid said the Senate will take up the package at 11 a.m. ET, hold a brief debate and then vote on several procedural motions before passing the bill.
The Senate voted Wednesday, 61 to 38, to end the debate on the bill.
The bill the Senate will pass Thursday provides $10 billion to states to prevent teacher layoffs and $16 billion for the Medicaid health insurance program for the poor.
At this point one thing is certain: as long as the Treasury can keep issuing trillions in new debt without a glitch, there will be nothing to stop the administration, now in its pre-midterm death throes, from throwing the kitchen sinks, and 9 other it bought on margin, at every imaginable problem. The Obama administration is about to take this country down in flames by spending hundreds of billions, trillions, tens of trillions on anything and everything, just like your garden variety drowning man clutches at straws. And as long as the Fed has the bond vigilantes locked up, kneecapped and ball-and-gagged in its basement, there is nothing at all that can be done: we suggest leaning back in your favorite made in China chair and watching the nation''s slow motion collapse as it unravels before our very eyes.
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A resounding "yea" from me.
And for your "yes" vote, we'll be sending you a pre-worn ballet slipper. No snorting the slipper. Unless it's in the privacy of your home and you turn off the surveillance cameras.
Please respond with your preference of left or right.............foot.
I have to think this won't happen so until I see Nasty Peolsi drop another deuce onto America's chest so I won't worry. Hell I won't worry anyway. When your already totally bankrupt whats one more night at the movies?
And there you have it. None of it adds up anymore because it can't. All these proposals, even if they do them, are not real. At this point all of them end in a smoldering heap of slag and ash because we are already there. Oz is just coughing up more bullshit hoping not too many people look behind the curtain. Thing is, the bullshit smells so bad, more and more will look. It is just a question of when do the MAJORITY get it, and act on it.
From the point of view of "them", if they can quickly pile the bullshit up, the majority might see it. But they will become so frightened they'll often wind up acting like deer in the headlights of the oncoming corruption and economic disaster.
There comes a point where many people will revert back to conditioning and programming regardless, or maybe I should say because, of the outrageous acts done to them. The conditioning is to take care of your own, to hoard your resources, both physical and emotional, to hide inside the herd, don't take any chances, hope someone else is selected for the gas chamber and you can survive long enough to escape. What ever you do, don't stick your neck out.
I have spent a great deal of time reading everything I can about the Nazi methods, particularly when it came to the death camps. My latest read is "The Nazi Doctors" and it's spine chilling how much control one can exercise over others, how cruel one can be, when empathy and care for others is subverted or missing entirely.
In other words, when the sociopath in all of us comes to the surface in the few who are released from social disapproval for displaying their inner urge to enslave and control. Those directly under Hitler "bloomed" under the relaxed "standards" and this effect worked it's way down the food chain, all the way to the civilized and educated Nazi doctors.
Until recently I was thinking that the German experience with the Nazis in the 1930s had some parallels here.
Now, I'm not so sure.
Without going into details I'll say that Nazism in Germany did not arise in a vacuum. It was born during a crisis, but not a global crisis. Things in general functioned. Hitler could get some traction, or make people think there was traction. Invade a neighbor, take their stuff, repeat. It might work.
In a global crisis I don't think anyone gets traction. The Palin&Beck '12 ticket might make a lot of noise and sound fierce, but I'm expecting people to be too busy securing homes, food and fuel to pay much notice.
There is no bang this time. There is no whimper, even. There is probably a sullen silence before the long shadow of history and forgetfulness will descend and wipe us off the face of the map. Or so I fear.
I understand your thought process. But I keep coming back to that old political saying.
All politics are local.
Regardless of the extent of a "global" crisis, it will still be felt locally. And when we're under stress, we could give a rats ass about those poor stressed souls in England, let along 2 states over. So while the marching orders come from the top, they are executed (no pun intended considering the subject matter) locally.
And this is where the truly outrageous atrocities happen. People snap locally. People make local and personal decisions. In a situation where people loss faith in their national leadership or the national leadership exerts more control, it will depend upon local conditions how it will play out.
A thousand points of atrocity then, to paraphrase George Bush The Elder (I think).
The US is much larger and diverse than 1930s Germany. The German experience would play out on a scale of something like (just to pick one) California. Or maybe Texas, being more a monoculture.
My point about traction was WRT intensity and organization. I can see a lot of brush fires of a very nasty nature, some spreading incoherently and swallowing up other regions in their madness. But I don't see something like the KKK rising up to run the country and a middle-class happy and secure enough to follow along on the off chance of making some money. There just isn't going to be enough unwound energy and money floating around to prop that up. No traction.
LOL. If Palin and Beck get elected, we'll have things a lot worse than armageddon on our hands.
What happens when the retarded have the keys to the arsenal?
We'll find out with Beck/Palin 12!
It's the plan. Transfer more banking losses to the US taxpayer. Run up the US Debts to the max, push the US off the edge and replace the dollar with SDR's through the IMF as a global currency...then inflate globally. Eh?
Here it is...
Financial Times, yesterday.
http://ftalphaville.ft.com/blog/2010/08/04/306346/imf-blueprint-for-a-global-currency-yes-really/
I have to say that what shocks me is the number of ZH posters on this board who are the slightest bit surprised by this.
Don't mistake "blood-boiling rage" with "surprise".
I'm not surprised in the least by this. Don't mean I'm not pissed all the same, though.
Point taken.
+ !! Caroll is coming around
Good to hear
CASH ONLY for my vote. Small bills please.
All I have is pennies. And I ain't turning those over because the copper is worth twice (soon to be 10 times) the face value.
I do happen to have a truck load of Charmin though.
Nickels take up less space and are currently worth 110.43% of face. Although, you do get strange looks from cashiers when you ask for as much of your change in nickels as possible.
LOL
Do me a favor. Next time you ask for nickels, pull out your cell phone and snap a picture. It might just go viral. :>)
About 7 years ago, I started singing the Gold and Silver song to my clients. Of course, the vast majority thought I was nuts. But I also told them that at some point within the next 10 years, the copper and nickel content in their pocket change would be worth more than the actual face value of the coin. The look on their faces was usually one of disbelief, with some out-right incredulous scowls. I even lost a few clients to more "sane" advisers.
It's been interesting over the past 2 years of annual client reviews bringing up those old discussions and asking them if they still want to avoid precious metals. Suddenly I'm getting a little more......how should I say this?.........respect. Yeah, that's the ticket. Respect.
A penny for your thoughts dear? :>)
:) No camera on the cell phone here; we're completely basic.
Do you think they'd call the cops if I pulled out an actual camera?
Yes
Michelle - you're awesome lol
I agree. Michelle has quickly become a valuable member of the ZH community. She brings a unique perspective to the discussion, one that I always look for.
Thanks, gentlemen. I've learned a lot here.
This is a really good idea. I think I will start to stock pile nickels and pennies. This is a nice stealth physical metals play. I like it:) And if I can deprive some banks of their physical metals even better.
Make sure the pennies are 1982 and earlier. The copper pennies are heavier. The adulterated ones look and feel funky, in comparison.
1982 year pennies are mixed. Solid copper ones weigh ~3.0g and plated zinc ~2.5g
Of course, it's against the law to melt down any US coin to "release" it's inner metal content. This is because you don't actually "own" the coin, just the "value" it represents. The coin and bills are "owned" by the Treasury, which is owned by the Fed
Hmm, then what happened to all of those silver coins that used to be in circulation? Surely none of them were ever melted down...
I didn't say it wasn't or won't be done, just that it's against the law. And that the basis behind the law is that you don't own the coin.
And much of that silver was withdrawn from circulation and melted down by the US government or under US government approval. I was around during the last run up in PM's (including copper etc) and many people were hoarding or collecting silver. They weren't melting the coins down for the content. In fact, many of the silver coins were "worth" more as coins of silver than as bulk silver. And not because of numismatic reasons.
However, copper and nickel may play out differently for different reasons. You need a lot more volume of copper to equal one ounce of silver. So the melting of copper and nickel may make more street sense than silver.
Make sure they're pre-'82 pennies (95% copper) not the 97.5% zinc crap we have now.
pennies have been made of aluminum for years, Put one under a 2 hole punch and see.
You people make me sick. Just because you haven't lost your jobs or you're not underwater on your mortgage, you think other people don't deserve any help. The best thing the government can do is forgive mortgage debt to get the economy going again. People making more than 250K can afford to pay higher taxes to help the less fortunate. Their greed got us into this mess in the first place.
Jesus...
You people make me sick.
Consider the feeling mutual.
Help? Where does this money come from? It's no different then being held at gunpoint and it being taken. Do you have the moral right to go to the nice part of town and start mugging people?
This is not charity, it's theft. The Gov has no money it does not take at gunpoint from someone. But you will probably get your wish, and look at all the countries with the redistribution scheme, all "paradises".
It's really worse than just holding up you and me at gunpoint. Generations of unborn Americans will be born with trillions of dollars of debt handed down to them. They will be born financial slaves and we are responsible for it.
As the absurd becomes reality and people accept it everyday...who knows what new demands will be placed on these Americans by governments and financial institutions so that they guarantee their money?
Finally the avatar fits the poster.
Bravo!
Agreed
Carl Marxist...fuck you.
Just for that...no more foodstamps...read my lips...
+++
http://www.dailymotion.com/video/xanlu0_lily-allen-fuck-you-very-much-live_music
One question for you: when all "foregivness" is said and done, who will forgive the Untied States?
I'm sure that our creditors will be kind and be willing to work out a land/eternal slavery deal with our "leaders" to deal with the debt.
....the corrupt ratings agencies, of course.
The long knives will be out for us....
The fed, in concert with their central bank partners around the world in what will be termed an historic undertaking to change the business as usual climate.... dontchaknow (:
"People making more than 250K can afford to pay higher taxes to help the less fortunate. Their greed got us into this mess in the first place."
That, sir, is an affront to those of us who make 250K+ a year - have no debt, and live below our means. And, btw, the reference to 250K is usually framed as "gross income". No one, and I mean no one who is making 250K a year GROSS in many of the "high cost" areas of this country consider themselves rich. relatively speaking, we are just as poor, and accelerating to the downside. 250K as a benchmark...is a joke.
250K+ !?!?! Relatively poor ?!?!?! Dude can I swap paychecks with you?
Yes - as long as you are making more than 250k per year.
You make me vomit.
Yes, I am unemployed and I DON'T need any help. I have the attitude and the balls to fend for myself no matter what comes my way. I would rather live and die free than steal someone else's money because 'I deserve to be helped'. Any help I need will come by way of voluntarily provided loans or charity from my friends and family.
No, I am not claiming unemployment benefits either.
Most people don't 'make' 250K, they EARN it legally and through their talent, work and application. A-Rod earns what he does because of his abilities as do minor league base ballers, he does not make his money. (Only that bum, Ben, can 'make' money).
People like you are a scourge to society.
Yes, I am unemployed and I DON'T need any help.
I am assuming that you are referring to someone else, and not me. If so, I hear you loud and clear. My wife and often talk to each other about our belief systems as it relates to "making it".
You could drop us off naked, in an unknown city. Before you could blink an eye, we would be clothed, sheltered, AND working". And that is just a starting point - up from there.
"Bring about what you believe about!" "BE - DO - HAVE!" Add your own metaphor for success and overcoming obstacles - it's not rocket science - it's what is in your head. What does your belief system tell you?
I don't mean to sound like a pompous ass, and will no doubt be accused of one. This rant was not directed at anyone in particular, btw.
My comment was directed at that moocher, Carl Marks.
Village Idiot
"You could drop us off naked, in an unknown city. Before you could blink an eye, we would be clothed, sheltered, AND working"."
Fucking Terminators never learn.
I really don't like you too much but that was funny.
Terminators stole that line from us.
Some terminators could get some serious overtime cleaning up infestations.
Years of government training have led to the Be - Know - Do of improvise, adapt and overcome.... hahahaha Thanks VI
http://www.youtube.com/watch?v=VWCYv40Ur1g
hahahaha Thanks VI
Any day I can make you laugh is a good day, Miles. Why did they have to go and twist that one around?
Ecologically unsound perhaps.... The why always being changed around after the fact regardless.
Backatcha
http://www.youtube.com/watch?v=GKceCBg4xlg
"Bring about what you believe about!"
Sorry - butchered that one. "Bring about, what you think about"
SimpleSimon
Paid into it. Will use it. The next guy who is less deserving will. So I should.
I'm not going to feel guilty about applying what was mine in that particular social contract.
Plus adds more weight to the collapse and rebuild.
Again, I like what you say and agree strongly. It is insurance that you paid into at gunpoint. It is okay to draw on it.
If you qualify for unemployment benefits then that means that either you or your employer paid into the system, it's like any other form of insurance. It does not seem very wise to refuse to claim something that you paid for. Or are you angry because you don't qualify? Maybe I don't understand.
This must be parody.
Please tell me this post wasn't serious...
His posting history would seem to indicate that he is, indeed, serious.
Though I suppose I'm therefore discounting the possibility that his entire posting history is parody.
We can only hope.
Considering the screen name is Carl Marks, I'd assume the poster is a parody, just like that Repugnican one up there that got everybody all riled up.
Oh, I was referring to the biblical poster. My bad.
Yup. Though Carl falls out of character here and there more than the Faux News one.
I just threw up in my mouth... Do you know who SAVES the most (as a % of income) jackass?...it's folks who make <$250,000, that's who! The people who have mortgages but made larger down payments (because they had SAVINGS) have less outstanding principal balances to be 'forgiven' because their cash is GONE... So genius, it's not just people who paid for their houses (and have no mortgage) but it is people who made 20% (or greater) down payments who should be pissed about any 'forgiveness' plan. This plan rewards people who were over leveraged and says 'fuck you' to people who were savers...
Shoot that man with the tin cup! Redistribution of wealth is UN-American. Idiots who think we will get out of this with higher taxes don't deserve the air they breathe. And this is the guy who will be poaching your vegetable garden when you are sleeping because he is "hungry".... He goes the way of the Groundhog...BANG! Getting close to the time where some of us will be "spending" our lead collection....
bzzz, wrong! The best thing that could have been done to prop-up home values is cut a deal with the bailed out banks where the government is allowed to demolish foreclosed homes as long as the banks were sucking on the teet. This hits the root of the problem....SUPPLY. Or, good paying customers should be scored and receive an "upgrade home" and the delinquents should have received a "downgraded house".....only would have seemed fair! BTW-recently unemployed, current on mortgage payment and not underwater due to my 15 year mortgage!
Carl Marks I think you are mis-understanding the content here.
Newsvine is pretty fun though............................
Listen dude, I happen to have bought a house and put 25% down, then I paid down the mortgage by another 20% later on...seemed like a prudent, intelligent thing to do at the time. I didn't buy a house I couldn't afford and I am not underwater -- however I have lost significant equity.
Given the sorry state of the economy our income has gone down a huge magnitude -- paying off your underwater house isn't going to help me spend more, get a better job, or add value to my business. The simple problem is those that did the "smart and prudent" thing now find themselves with little options -- we can't "walk away" as we actually put money into the equation and many didn't rack up huge debts to default. By the way, though I likely could have done it differently I still drive the same car from 2003 -- don't have any flat screens and am really f*cking sick of hearing about everyone's plight after spending like they were made of money.
How about leaving the government out of it and having the banks either put these things on the book at actual value and/or doing their own principal foregiveness modifications to try and keep people paying instead of walking away...?
We all know the nationals are insolvent anyway. THEY should be the ones trying to fix things, not the taxpayers.
As a public service, here's the original comment (in the event it's Junked out of existance):
by Carl Markson Thu, 08/05/2010 - 11:36
#504573
You people make me sick. Just because you haven't lost your jobs or you're not underwater on your mortgage, you think other people don't deserve any help. The best thing the government can do is forgive mortgage debt to get the economy going again. People making more than 250K can afford to pay higher taxes to help the less fortunate. Their greed got us into this mess in the first place.
It's time to cull the herd.
Quit expecting people to pay for your poor choice! That is all.
It doesn't matter how broke FNM/FRE look today since their assets are all booked at hold 'till maturity and maturity can always be rolled over ad infinitum.. On reflection, no wonder so many like to work under those conditions, never having to face maturity.
This plan is brilliant. See, forgiven debt is considered income by the IRS. Therefore, if you're a broke idiot who has no intention of paying your mortgage, that half-million-dollar debt suddenly is transformed to income! You become upper-income, part of the greedy rich, and the government takes its cut and no one will give a damn about you. And then the government can claim that incomes are rising. Brilliant!
Except Bush was smart enough to pass an order that debt forgiveness on a primary residence is NON taxable. Sorry to bust your bubble.
Doh! Then I agree with everyone else that this plan is stupitarded. Mortgage payers should form a union and strike.
What about state income tax?
won't happen as in political hari kari but the concept is being floated for a reason - but what?
False flags are flown to condition you to the lessor shock of the game plan. See it's not near as bad as that proposal.
Should this come to pass, it is just further proof that Our Government is Criminal, Corrupt, and Illegitimate.
What of the home owners who paid for their homes? What about those who were prudent and bought homes they could afford and are not under water?
This would amount to nothing more than yet another robbery of wealth from savers and our children by criminal government officials to buy votes.
It is an outrage that this is even being discussed!
I agree. I bought my house with a 50% down payment and worked my ass off to pay it off completely. I am not 'underwater' because I don't have a mortgage but my house is worth less that what I paid. Because I did the right thing and don't have a mortgage I am not eligible for any upside down 'forgiveness' on my house? WTF! Pitchforks, bitchez!
Can I be the only ZH reader who's underwater on the house? Poor me.
I have a different take - my house is where I live, not an investment or some fantasy collateral to be packaged and traded by a bunch of greedy animals on Wall Street. So was I irresponsible to purchase a home so my kid could have a backyard to play in? I don't think so. The irresponsible people are the ones who demanded loans be originated so they could trade pieces of paper amongst themselves.
if your house is not an investment, why do you care if it's underwater?
And who cares who owns the mortgage?
You are paying a monthly amount for the kids to have a roof over their heads and a backyard. I don't see the problem?
My problem is that mortgages should have never been allowed to be pooled and traded - period. As usual, greed came along and swept away sanity.
If it wasn't for the insatiable need of Wall Street for mortgage origination for the sole purpose of creating and trading MBS, the housing bubble most likely wouldn't have happened. That said, wouldn't we all be a little better off, not just a few greedy bankers?
You can't really believe that pooling securities is the root of the problem? Are you even aware that MBS's exist in canada and have not been a problem at all?
The problems are, in brief:
government backing of lenders such as fannie and freddie
government 'encouraging' lenders to lend to those who would not normally qualify for home ownership
the fed keeping interest rates artificially low for years despite a booming economy
irresponsible spending by...you guessed it...government
I could go on and on...
Bankers merely agreed to go along with the farce as any rational person would. If the government says it's good and they want everyone to own homes and they want prices to always go up, well who are they to argue?
Securitization has very little to do with it (although it allowed the banks to sell off the crappy loans of course, hard to believe anyone was stupid enough to buy them)
Had with the looney left and this admin redistributing wealth. I will not honor this latest attempt on pushing this crap on those wo abide by the law and pay taxes and their mortage. I have had enough.
No more paying my mortgage if this gets passed...my version of free money...
So no Congressional vote will be required? Just a cabinet (Tim) administrative memo?
To: Suckers...errr...taxpayers
From: Timmy
I will be adding a couple trillion to your bill.
If this is done without a congressional vote then it is over...TAKE TO THE STREETS!!!!!!
good line there: slow motion collapse.
Our Kenyan president knows that Americans have VERY short attention spans and that they can get away with anything as long as they slowly implement it.
Instaawesome...
Living through the last 15 years has been simply amazing. I cannot wait to sit around the barrel fire with my kids telling them stories of old about how, "Yeah, you think invading Iraq was nuts, listen to what happened a few years later....", as we raid another dumpster for a meal.
So I should just stop paying my mortgage and it will be "forgiven"? Also, can't you get rid of those pictures of Cramer plastered all over your website? They are getting to be nauseating.
The moral thing to do is foreclose on the 7 mm mortgage holders who are in delinquent. Sell the homes and force home prices down offering great bargins for a new class of working renters. Pain for the deadbeats; gain for the workers. If the deadbeats wins, then the economic incentives are turned upsidedown and encourages others to stop making payments on any and all debt instruments. The mortgage writedown proposal will create class warfare than could lead to civil unrest. very dangerous.
Again, welcome to the wonderful world of Moral Hazard, where right is wrong, and wrong is right, where markets melt up on bad news, and where bad guys win and you lose.
That' s the plan, Tempo.
Divide and Conquer.
Works. Every. Time.
Little OT but, got my property tax bill today from little town/county Iowa. Value up, taxes up, homstead gives me a minus, Total pay out down down down $120 , total property tax bill $1788 on a value of 89k. Lets see......... Total property taxes levied over last year, + 217%!!!!!!!!!!!! Crap! people are going to be pissed.
You are a renter. They remodeled it as "ownership" but property "owners" are nothing more then serfs renting the land. If you don't pay your taxes they reclaim the land, because they really own it. Slaves who think they are free will chaff less under their shackles.
that is exactly where this is going.
TPTB will give out free houses and raise property tax to 20 %.
welcome to serfdom.
Correct. It's Allodial Title vs Fee Simple. Only monarchs, governments and a privileged few actually own land outright. Others are just renting. Even Texas offering allodial title status simply makes you pay the rent up front.
How about we do what I said last year. FUCK THE BANKS...and the securized packages they sold.
First...we take all mortgage payments made from January 1, 2005 thru December 31, 2009. We claw every payment back and have the mortgage service provider apply those payments directly to principal. We will be lowering the principal owed on the home in this manner. We then turn all CURRENT mortgages into 15 or 30 year FIXED rate mortgages at 5%. This will instantly take many people out from that underwater position they were in. This will satisfy many loans were about to have owners walk away, or atleast put them in a position where it is worth it to now stay in those homes and contnue making payments again. If they want to do all kind sof lunacy let them....THIS WOULD BE THE LESSER OF ALL EVILS. I am not advocating bailing people out, lord kows they probably deserve what they are getting.....BUT....this will work and it that simple.....
I brought this up to Mr. Denninger last year and he promptly gave me 10 reasons why it would not work...BUT if the Governemnt don't give a shit and is willing to do dumbass things like this RUMOR.....why the fuck can;t they do this???
@curby
I listened to Greenspan's comments and he made a point that the biggest fear right now is a waterfall of new foreclosures triggered by falling RE prices. According to Greenie, it will only take another 5% to 7% decline to make TSHTF. If they think this giveaway will stabilize prices, they are crazier than shit house rats. A good portion of those houses are going on the market the minute the owners are no longer under water, and they will get exactly the results they feared the most.
<< A good portion of those houses are going on the market the minute the owners are no longer under water>>
Excellent point!!
"A good portion of those houses are going on the market the minute the owners are no longer under water, and they will get exactly the results they feared the most."
Roger, Roger...excellent point!
LOL -- the audacity of dopes. This trial balloon is made of lead, no way can this get through Congress, but damn, you have to give those assholes credit for daring. In a perverse way, Don Quixote would be proud.
A nice thought but I don't think they have to go through congress
But haven't we already underestimated our central government's ability to completely screw up everything?
I bet the strategists in DC (on both sides) are considering all kinds of screwy ideas. They'd do anything for half a point in the polls!
The lunatics are running the asylum.
I was going to say something like, "they next thing they are gonna do is . . ."
But:
a) I dont wanna give em any ideas
b) I can't think of anything more insane than this.
As long as there is anything to give away, they will continue to use it to buy votes.
Wish there was a site like stormpulse.com, but instead it would be called debtpulse. On the map, you'd see the growing swirls of 'debt storms' coalescing into a intensifying swirl known as QE-Cane2.
Been nice knowing you guys. Guess I should case out the luxury car joint so I can at least drive full speed over the cliff in a brand new mercedes.
Surely you jest, KarlMarx.
Being responsible for one's actions is what it takes for societies to have staying power.
This action, if taken, would result in civil war.
Er, you might wanna give some thought to whatever this story is intended to distract you from.
I've spent the entire summer trying to explain to my daughter why she should avoid student loans for college like the plague. She's not buyin' the argument.
After this, I'm not buyin' it either.
Credit cards, student loans--load 'em up. This has to be the next "Forgive and Forget Stimulus" target, right? Forget jobs, CREATE CONSUMERS!!
Just be sure to buy loads of durable goods, especially gold, silver, guns and ammo.
Never happen; but as someone said earlier they certainly are running it up the flagpole for a reason. Given past experience with this administration the game plan has seemed to be propose something outrageous, have people raise hell about it, then propose a watered down version.
The panic to keep the banksters balance sheets from imploding is getting fierce. The infighting amonst the elites should start in earnest now as factions deploy to the camps which allow them to loot the best advantage for themselves and the worst situation for others. The comraderie of "kick the can looting till the market turns around" era is coming to an end.
I think your right Misean, it is a sign of desperation. Protect wealth at all cost even though it will lead to the system imploding.
Nothing is coming to an end. This is a giant subsidy to local governments who are dependent on property taxes for their operating budgets.
I am a renter and have been waiting for housing prices to drop enough to purchase one. This is Bulls%*t! Irresponsible d-bags go out and buy house in no way they could ever afford and I get the bill!! This pisses me off beyond all belief!
Owning your house does not seem to be a good thing for the short term. Prices are artificially high, and when you do buy, you will just become an ATM for the local and state governments (increased property taxes). Add to that the possibility of losing the mortgage interest deduction and it looks pretty bad.
Plus look at home prices vs. rents (Price to Rent ratio). Either rents are cheap or home prices are high, either way it doesn't make sense to buy.
On top of that, let's say you put down 20% cash. Seems to me there are better uses for that cash right now.
Why the outrage?
JFC, what is the difference between this and inflation?
We, as a nation, obsess ourselves over the downtrodden, the poor, minorities, etc., anyone who's a have-not.
Same in schools; we devote most resources to trying to get the stupid kids Cs, when they will NEVER contribute a damned thing to society. Meanwhile, we let our smart kids languish. All revolves around not having to tell the stupid and nonproductive that they are stupid and nonproductive.
The reason kids do poorly in school is because they are stupid or lazy. It is mostly the same with life and society. It's not their fault, nobody is "blaming" or judging, but it just is the way it is. The reason some people suck at gymnastics is because they are clumsy. Should the gymnastics programs spend almost all of their resources on trying to get people like this to traverse a balance beam?
As a society, things are being given to people who do not deserve them, haven't earned them...all up and down the spectrum, from the spoilt rich brat kids of the elites who get Princeton hookups due to their heredity, to the thug class leeching welfare bennies. Burn it all down and replace with meritocracy.
THIS is what nobody wants to say or tell about the Founders; they were meritocrats. No titles, no nobility, not even a VOTE for everyone.
Homeschool, homeschool, homeschool...
Self load self load self load
concealed carry concealed carry concealed carry.
Looking at the situation, if mortgages are reduced will people still try to sell their houses at high prices when no one has money? Perpetual bubble blowing.
but wait....there's more....
Democrats from wealthy districts are torn: they really want to raise taxes on the wealthiest Americans, but the problem is many of those Americans hail from their own districts! What to do.
I will tell people what to do, vote out the losers.
If THAT doesn't spark a civil war, I don't know what will.
HA! That's wonderful. Talk about having your cake and eating it too...
(double post, my b)
I think there was a post or a comment yesterday that said something like when the .gov or maybe it was the fed, are out of the normal fixes they will start throwing stuff at the wall to see what sticks. Could this be some of that "stuff"?
I´m not afraid of americans....
I wanna become an American. This must be the REAL american dream in essence...
Does this mean that the GSE debt will finally get added to the budget?
No it means that the credit card companies will be added to the GSE's, government backed and subsidized consumer credit, with oversight, (hold your side now), and rate increases and charges also regulated (okay now I'm laughing too). After all we talk about credit spreads, the Mastercard, 30yr Mortgage spread is atrocious. Now when the mortgage industry worked like a giant ATM the economy was fine, so lets get back to that, somehow.
Looks like that girl from the election was right
"now i ain't never gonna have to worry about paying my mortgage or my bills"
LOL
Yep, she called it alright!
http://www.youtube.com/watch?v=P36x8rTb3jI
My country is shot!
USA can now be known as the land of Wealth Destruction and Moral Hazard.
Game Over. The End. Finis.
Roll Credits...
Thing is, it won't just be the US. The other countries are doing the same things we are. This ain't the end, it is the beginning...
Requirement for public office:
1. Fog a mirror;
2. Show a birth certificate;
3. Evidence that you have worked in at least a Seven Eleven for a period of at least 6 months to show that you understand the economics of the Slurpee.
Requirement for public office:
1. Fog a mirror;
2. Sociopath morality.
Fixed that for you.
EDIT: Tried to us the strike through but does not show.
Where do I sign up for this new form of welfare???
What an idiot I have been for paying my mortgage on the first banking day of the month for the past 14 years.
they'll becoming for you, you have equity, which is like blood to the banking vampires. No point in foreclosing those with no skin in the game. When all is said and done people will refi UP to get a secure mortgage.