Santelli On False Dictatorships And Fed Exit Strategies

Tyler Durden's picture

In a little under three minutes, CNBC's Rick Santelli clarifies (in a much-needed manner) that we do not live in a monarchy or dictatorship (hoping for benevolence) - no matter how many Democratic senators and congressmen believe the President was given a mandate leaving him "holding all the cards" - we live in a republic (where the sovereignty rests with all individuals) and removing 'debt ceiling' checks and balances (for example) is a ride down a slippery slope. The chagrined Chicagoan then goes on to discuss the fact that the Fed, having unloaded another package of potentially infinite unsterilized money-printing, was actively discussing its exit strategy. Put simply, Santelli notes, "mark my words" the market will decide that exit - and the Fed had better be ready when it comes.


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mayhem_korner's picture

America’s homeowners have just lost about $6 trillion in home value in 2008, largely because the people who are supposed to oversee and finance the economy didn’t do their jobs


If the people who oversee and finance the economy did their jobs the way they should, those people wouldn't have bought overvalued homes (if any at all).

flattrader's picture

Yep. Agreed.

But of course Santelli wasn't interested in holding banks, MERS or anyone else accountable...just the homebuyers, many of whom were documented victims of fraud.

Beam Me Up Scotty's picture

Just what did you think would happen when you got the lower adjustable rate mortgage instead of the slightly higher fixed rate mortgage.  You didn't think the rate might go up?  If you couldnt afford the house at the highest possible rate on the ARM then you shouldnt have been buying the house.  You get a Truth in Lending statement when you apply for a mortgage moron, stating what the interest rate is and how much your payment is going to be.  I've bought/refied a few times over the years, and I've never been duped.  Why were you?? Most mortgage foreclosure is because of idiots who don't know what an amortization schedule is.  Too bad they didn't pay attention in 8th grade math class.  Boo Hoo.

flattrader's picture

I wasn't duped.  Others were.

And I guess you missed that whole mortgage fraud element of what went on...the fraudulent origination, the liar loans and the people who thought they were applying for a fixed rate mortgage and had their papers switched out on them.

Beam Me Up Scotty's picture

Um, you get copies of all of those documents at closing.  Thats what courts and lawyers are for.  The vast majority of foreclosures were related to people buying more house than they could afford on an ARM.  Rates adjusted up, and they couldnt afford the payment. 

Leopold B. Scotch's picture

Santelli ain't defending the banksta gangsta crowd.  He's just not excusing the masses from their own stupidity. 

What?  A house doesn't go up 15% per year forever? Who the...!!??!

I should not take out a loan at 125% of the home's appraised value?? Whaa..?!?! Fraud! Fraud! Fraud!

Really, half these folks are experts on who Hollywood dates, the latest reality T.V. Crap, choosing ignorance over reality.   They keep voting to have government indoctrination in their schools run by the Education Industrial Complex that never questions an ounce of the system, and they keep voting to keep their AHOLE politicians in office... and have no idea that the Fed is a banking cartel in a political-banking nexus with our political masters.  Prepare to bend over for the rest of your life if you CHOOSE to keep your head in the sand.

A fool and his money are soon parted.  A bigger fool knows that's the case and demands that it's someone else's problem to make sure he (the fool) isn't victimized again, and that he shares no fault for allowing himself to be victimized in the first place.

eatthebanksters's picture

Read todays news, Obama and Cameron let HSBC of the hook for thousands of criminal acts (you read that right) because they are too big to fail. That's the fucking problem...if you get to big then laws don't apply to you; this shit is gonna backfire when the little people get tired of a two tiered justice system.

MachoMan's picture

If the people who oversee and finance the economy did their jobs the way they should, those people wouldn't have bought overvalued homes (if any at all).

No, no, and more fucking no.  It is INEVITABLE that this happens when people are given this level of oversight and control.  It is their job to ensure that what happened ended up happening.

redpill's picture

A predator because he doesn't want the government to use force against people who DO make their mortgage or rent payment to make them pay for the people that don't?  Think about who is really advocating aggression here.

ozzz169's picture

Once in a while you have to put a clown like this in his place.  So if someone is stupid enough to buy a house in a market that is very inflated, its the governments responsibility.  No if you bought a house that was very overpriced then its your fault you lose your house.  (now I do feel for people that were lied to by banks and lost there houses to the banks because of false promises and illegal forclosures (because I was one of them, ie entered rework programs instead of selling houses, then made payments while they forclosed on the house).



batterycharged's picture

People didn't go down the street to buy the mansion on the hill.

Your portrayal of the situation is LAUGHABLE.

People bought WHAT THE MARKET costs were for a home.

And why were the houses so expensive? Why are the houses no longer expensive?

Because asshats that love to gamble (i.e. investors) and banksters let this shit go on.

You blame the average person because the bank lent money to bums? And some fucknut on Wall Street wrapped the mortgage in a security, driving up prices???

Santelli is a fucking ASSHAT. I'd love to kick the living shit out of him. He personifies the macho ego of the wall street crowd, effing MAGGOTS at the trough, doing NOTHING for society but thinking they are the pillars of society.

Then they blame the average person that simply bought houses at the market rates for "being dumb and a loser". How is that for rubbing salt in a would? You fuck us over, then blame us for your shitty profession?


MachoMan's picture

You left out the most important aspect of the equation, leverage.  Whenever you borrow to engage in any activity...  to purchase ANYTHING, then you are a speculator.  Plain and simple.  The fact that you blew money on a consumptive endeavor (house) does nothing to change the fact that it was purely speculation.

By your logic, if the price of a 3/2 1500 sq ft home was $10,000,000,000,000, then they were perfectly reasonable to buy that on a 30 year @ 5% with an annual salary of $50,000...  ok.

flattrader's picture

And by your logic it was perfectly reasonable to originate a loan on that 3/2 1500 sq ft home costing $10,000,000,000,000 to someone making $50,000 dollars a year?

Who was really culpable here???

[ I suppose you want us to pity the poor banks, mortgage cos., insurers etc...who purpotrated this fraud...and got bailed out. ]

Raymond K Hessel's picture

You don't encumber yourself with debt payments that go above a certain threshold.  If you have the cash it's fine.  If you are barely making payments, then it is your own fault.  The people underwriting loans aren't mad banksters. They're making $60,000 at best and told to write loans.

I was told I could afford a loan well above what I knew I could afford.  I said no.

I didn't use calculus and differential equations loaded up in a supercomputer to figure this out.  I knew what my takehome pay was and said I can't spend more than x percent of that amount.

It's that simple.   


Leopold B. Scotch's picture

Well, there is legitimate blame for this fiasco that should be applied to the global cartelized banking system.  By killing the natural rate of interest and defending below market rates by expanding monetary policy, you remove a critical pricing indicator from the market.  In an environment that would demand higher borrowing rates when a heated economy is borrowing too much, this is a non issue -- the bubble snuffs itself out before it gains any traction as anything remotely bubble-like.   Enter the fed, fractional reserve banking, and the bailout machine, and a flood of money backing an artificial interest rate, a great amount of activity begins cropping up on the back of the price fixing, a boom that goes as long as it can, egged on in this case by steady dropping rates and fractional reserve pyramiding of debt upon debt, much of it laundered from CCC to AAA via B.S. finance throughout the system.  So, yes -- many folks, entrepreneurs, etc. were mislead. 

However, those who understood this in advance -- who were educated in non mainstream economics -- we avoided the fiasco.  Anyone with an Austrian Economic background knew an echo bubble was coming from the minute Greenspan bailed out the collapse in tech.  Nobody listened to us, preferring the syrupy words coming from the seed-corn raiding, free-lunch promising, broken window fallacy believing, neo-Keynesian AssHat crowd.  (a.k.a. "The prevaling wisdom" majority)

Of course, there's also blame in government, where through B.S. Redlining Laws, they made sure plenty of unqualified people in really shitty areas had access to capital that drove up those prices as well, borrowers who were so insolvent they'd default on their 2nd mortgage payment.  Thank Barny Frank and his cadre of GSA defending Poverty Pimps, who called out anyone who pointed out this disaster waiting to happen as "Racists", etc.

And you could go on and on.

But, heck -- the world is filled with criminals and sheisters.  It's your job to not believe in the myths that you can trust politicians, Big Government, or a banking cartel granted the legal right to print whatever $$ it takes for them to earn massive profits and bail themselves out.

It's your fault for enabling it and allowing it.  The rest of us having been buying gold (as I've been doing since 2003 at $318 /oz).  The writing was always on the wall if you bothered to pay attention and / or stop throwing sand in your own eyes.

blunderdog's picture

     You don't encumber yourself with debt payments that go above a certain threshold.

I know a fair number of folks who didn't pay much attention to the heist in September '08 because "it was just weird technical stuff." 

They had bought houses/cars/etc based on their income and the (obviously incorrect) belief in something like job security.  Once you knock the idea that you can depend on holding a job out of play, you pretty much have to give up ALL forms of finance. 

It's just not possible to know which businesses are going to succeed/fail in such a manipulated financial environment.

No one is concerned about the "poor" fucks who signed NINJA docs for $500,000 mortgages.  Even THEY aren't concerned--they knew all along it was a grift.

Unfortunately, there were TONS of folks who didn't know all that was happening, and had been convinced (by an industry of liars) that a $350,000 house on a $60,000 income was REASONABLE because of the interest rate manipulation by the Fed and our biggest banks.

It doesn't even matter if you throw them out of their houses.  That'd be fine if the market would be permitted to clear, because it would mean they could afford shittier houses in cheaper locations.  But as long as the supply is artificially restricted, there's no opportunity for any of the correction that we all know needs to occur.

Leopold B. Scotch's picture

Blunder, I have tremendous amounts of empathy for folks who didn't see this coming and got their asses handed to them.  You and all your friends need to read up on why Henry Ford once quipped (paraphrased), " if Americans truly understood the nature of their banking system, there'd be a revolution overnight."

We're deliberately mal-educated.  It's not accident.  It's conspiracy on such a grand scale we're oblivious to it.

Read Rothbard's "The Case Against the Fed" and his "What has the Government done to our Money."

Those were the basis of knowledge that saved my ass this last round.  I couldn't believe it was entirely true and was in denial through the bubble that was lead with tech.  It cost me many of my friends / clients tons of money, etc..  I didn't make the same mistake twice.  You and your friends don't have to, either. 

You can download both books for free as .pdf files, so no excuses.  Build from there, unless you prefer to remain oblivious.  (Blue Pill or Red Pill, Neo.)

blunderdog's picture

I did my best to educate folks over the past decade, with some success here and there.  I'm doing fine.  I never bought a house.  I also don't have kids. 

I'm just reminding folks that although there were plenty of fraudsters and charlatans in on the game, there was a great number of their victims who ended up with the worst of all outcomes.

It's easy to blame them for not knowing what you may have known, but do you really want to lay the foundation for punishing them even MORE now that they've already lost their shirts?  To what end?

(It's not so very difficult to see where the stolen money WENT.)

MachoMan's picture

False dilemma/strawman.  I said nothing of the sort, nor implied it.  Here's the issue, ALL ARE TO BLAME. 

ejmoosa's picture

I think you meant to say that homeowners did not do a good job of evaluating the real estate markets before committing to a purchase price.

If you want to know who really made out, check out who collected the taxes on all those housing transactions, and all those that had their property taxes skyrocket because YOU OVERPAID for your house.

Winston Churchill's picture

The people that really made out:

The merchant banks that set up the REMIC trusts.

Not happy with a one off profit of 40% on cost,they sold these loans

multiple times.The record is one loan sold 42 seperate times.

The average Note was sold ten times.They also benefited from CDS

contracts written on ALL those sales,

The homeowners are straw men hiding the banking  fraud.

The biggest fraud in history.

flattrader's picture

Yep..Biggest Fraud in History...and the idiots here are STILL blaming the "homeowner" and defending the fraud (and Santelli.)

Thousands of articles posted here explaining in excruciating detail how this happened and they still don't get it.


boogerbently's picture

Gotta agree with the rest, flattrader,

The home isn't yours until it's paid off.

You took out a loan you couldn't afford. Tough $hit.

You walk away from your contract because it wasn't the "investment" you envisioned, you CAUSED the recession.

Not everyone foreclosed on was hard working Americans who lost their job during the recession....not by a L O N G S H O T . Lead by example. NOT two wrongs make a right.

flattrader's picture

>>>You walk away from your contract because it wasn't the "investment" you envisioned, you CAUSED the recession.<<<

How 'bout you make a shit load of crappy loan without documenting income for fat origination fees, bundle them together with a few good ones and then pawn them off as high grade investments to some suckers???

Now, exactly WHO caused the recesession again???

redpill's picture

All of the above, plus Congress and the Fed.

MachoMan's picture

and a shitload of apathetic citizens...

unununium's picture

and the ratings agencies.

Beam Me Up Scotty's picture

"How 'bout you make a shit load of crappy loan without documenting income for fat origination fees, bundle them together with a few good ones and then pawn them off as high grade investments to some suckers???"

Did you lose your house?  Or did you lose your ass buying MBS??  Average Joes weren't out buying Mortgage Backed Securities.  But they were out buying the absolute most their money could buy on a house.  Mabye instead of taking out a $500,000 mortgage they should have gotten a $250,000 mortgage and half the house.  But its no fun when your buddy has a nice new McMansion and you don't isn't it.  Plain and simple, most people bought more house than they could afford.  Period.

flattrader's picture

>>>Average Joes weren't out buying Mortgage Backed Securities.  But they were out buying the absolute most their money could buy on a house.<<<

Some average Joes didn't buy McMansion they couldn't afford but, got their asses handed to them nonetheless in the form of unemplyment or saw their small businesses fail because the greedy fucks fed at the trough and puked up a recession.

Raymond K Hessel's picture


You and BMUS are both correct, but he's more correct than you.  

If you don't watch out for yourself, then you are not doing your job.  Everyone knew prices were too high.  Everyone.  

But they kept buying.  I tried to buy and said no way.  The mortgage payments, even at 75% LTV, were higher than rents on comparable apartments.  

It doesn't make sense to buy when it was cheaper to rent.  

People were buying thinking prices never go down.  They got burned.  Too bad.

Beam Me Up Scotty's picture

I agree there was some fraud.  But by and large, an hour of education about a mortgage is all that it takes to avoid problems.  And you can't blame the bank if you lose your job, or you get sick.   But I see people who every day make piss poor life decisions and then cry like a spoiled baby when they can't afford something.  I see people talk about making late mortgage payments then later hear them talking about the movie they watched on HBO.  What?  You haven't made your mortgage payment but you have a top tier Directv package? 

I know a woman who is in her early 30's.  She's single and has 4 kids.  She can't afford the 4 she has, and guess what, shes having a 5th.  I'm sick and tired of people pissing and moaning about their own shitty decisions, and then trying to make me pay for them. 

Leopold B. Scotch's picture

Dooood.  You're harshin' my mellow with all that "blamin' the victim" talk...

Beam Me Up Scotty's picture

I don't feel any sympathy for people who are victims of their own stupidity.

Better_late_than_never's picture

McDonald's made me fat. They should have told me that all that sugar was bad for me. It's not my fault. They made it taste good.

helping_friendly_book's picture

I watched a VP of the FHA on C-Span admit that the FHA is extending credit to people who defaulted 3 years ago. He claims they are a good risk now. Unbelievable. My mortgage rate is 4.875% but, I'm going to get it down to 3% soon.

Jeepers Creepers's picture

I remeber a friend railing about how the bank screwed over his mom on her mortgage that made her lose "her" home.  I asked how the defrauded her, he said they were upfront about everything with full disclosure about what she owed and her responsibility, but the big crime was that they approved her.  Something tells me this guy would be screaming if the bank had turned her down about how the system screwed his poor little mom.  And something tells me had the real estate market gone p, she would have found a way to make the payments.


Look, I hate banksters as much as the next guy, but I'm not going to check my intellectual honestly and pretend every other person is some innocent angel.  It's really no different than student loans or credit cards with young people.  No one put a gun to your head and made you become reckless.

blunderdog's picture

    The home isn't yours until it's paid off.

That's not true.  The house (whether it's a home or not) belongs to you when you get the deed.  The mortgage holder just has a LIEN on it.

The "ownership" is a done deal--it's handled by the county clerk.

You really ought to learn just the tiniest bit of stuff before trying to pretend you understand what's going on.

VisualCSharp's picture

While you may be legally correct, practically, if any person or entity can put a claim of ownership on your property then it is not truly yours. It can be taken from you legally through liens or eminent domain.

blunderdog's picture

Then you never can possibly "own" anything.

You've got kind of a self-defeating argument there.  The bank can't "claim ownership" of your house, they basically have to sue you for it.

Anyone can try to sue anyone for anything.

Spigot's picture

Are you seriously stupid? The fuckers are already rich without your decaying McMansions. Santelli has never advocated anything but letting the market fail ALL failures big or small. Your version of Santelli is pure ignorance.

Seer's picture

"America’s homeowners have just lost about $6 trillion in home value in 2008, largely because the people who are supposed to oversee and finance the economy didn’t do their jobs"

No one was forced to do anything.  Greed ran rampant, that's what happens in bubbles.  I'm fairly conservative, in which case I wasn't willing to take everyone's advice- I sold before the market collapsed.  And if little old I could have figured it out (with NO/ZERO adivce from anyone else- I went on logic alone) then ANYEONE else could have as well; but not the case with those in which greed kept them locked in.

Buy low, sell high.  Food, Shelter (not "investment properties") and Water.  And people continue to be suckered because they are greedy, THAT is what happened.

"can scarf up the properties for pennies on the dollar and get rich"

I've challenged others on this (who may have come at it from a different angle, but the aim/target is the same- that "they" are buying everything up).  Who the fuck are they going to sell to once everyone is broke?  And are those cheap condos really work anything?

Riddle me this: if "they" weren't buying up real estate WOULD YOU BE?  If you think that this could be the big get-rich scheme then why aren't you/didn't you moving/move on it?  Are you waiting for someone else to tell you?

I took plenty of ridicule for straying from the herd.  My aim of being a farmer was looked down upon.  That's what happens when you step outside the circle.  Can't step outside the circle AND be free of risk.  Stay in the circle and it's quite likely that the herd is rounded up, at some point.

I don't like Santelli either, but then again I don't care much for ANY talking-head (whether right or wrong- best course of action, most productive is, well, to be "productive" [and market trader also doesn't classify for me as being a "producer"]).  And given the base economic philosophy of "perpetual growth on a finite planet" is a BIG FAIL, all of these folks' offerings are worth little (other than entertainment- also provide good fodder for attacking others- humans are good at casting dispersions on others).

azzhatter's picture

I would still like to slap that asian bitch. She is a smarmy little cunt

batterycharged's picture

I know right, is there another man on the planet that you would love to CRUSH more?

Starting with his geeky little head?

I love  little fags that make tons of money by swapping paper berating people that actually FUCKING WORK FOR A LIVING.

kliguy38's picture

Good luck Ben when this Biatch slap comes

Cursive's picture


To paraphrase Liz Phair, when it comes, it's gonna be a volcano.

Id fight Gandhi's picture

So go over the cliff, freak everyone out, get a brief mkt pullback more QE and more spending and remove the debt ceiling.

buzzsaw99's picture

the market is a myth like manbearpig

NewThor's picture

I dated a womanbearpig once.

She fucked like a woman,

caught fish like a bear,

and tasted like bacon.

...but eventually 

the lack of good conversation

was a a real bore,

so I had to move on. 

Unicornwomen is where it's at!

Mad Mohel's picture

I bet if she fucked like a pig, you could have overlooked the shitty conversation. What are ya anyway a professor or something? Conversation, LOL.