Bits Bucket For September 7, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Good morning Ben and fellow HBBers.
So with the bailout of Fannie and Freddie, how does this provide a jolt to the housing market?
Lower interest rates for 30 year fixed.
These are no longer private companies with $5T in debt, these are US Government guaranteed debt with the US government in charge. Think of all the new government employees.
The arbitrage is buy GSE debt, short US Treasuries. This effectively lowers borrowing cost for home buyers by at least 3/4%.
This is the single largest financial event in my life. The US Government debt just rose by $5T.
For those that said there was “no bailout possible” this is a huge bailout. The government can do what ever it wishes with existing loans. Forgive, foreclose or modify. A blank check.
The gov’t will probably modify loans of existing underwater mortgages.
However, I do not believe this will impact price declines — new buyers coming into the market can only get approved for 3X income loans, meaning prices will continue to adjust.
The only difference between yesterday and today is that now each and every one of us are now responsible for eating the forgiven or foreclosed difference.
What I want to know is where I can pickup my used Hummer, Disneyland vacation memories and Orange County Mammaries, which I am now a partial stakeholder in.
At the end of the day, incomes = real housing prices.
“The gov’t will probably modify loans of existing underwater mortgages.”
That would be a huge reward for anyone dumb enough to buy a home they could not afford at the bubble peak.
You mentioned yesterday some banks might actually be helped while others might be hurt. Has your opinion changed at all, either way??
And shouldn’t we be seeing some more writedowns of that preferred stock the banks own??
Nope
Will the eventual bill be anymore lopsided than today’s Bills victory?
1-0, thinking playoffs but lets take it one game @ a time…
How hard is to see Favre in a non-Packer uniform?
RE: How hard is to see Favre in a non-Packer uniform?
You see him today?
He never fails to look like he has come right out of some Bowery honky-tonk after a night of hard whiskey drinkin’!
But ya gotta luv him, no what color the uniform.
So does this also mean the government will be able to lower the prices of houses so people can actually afford them? Lower interest rates do not equal affordability.
“So does this also mean the government will be able to lower the prices of houses so people can actually afford them?”
They really want the “how much a month?” losers to return to the market signing loans that have a future balance that matches the purchase price. In effect, they really want home owners to be “triple-net” tenants; Gawd’s children will hold title.
I love little bubble pops,
Old morgtage GSE slop,
Slow crashin trains, and pain.
I love dirty China streams,
Sleep without dreams,
Sunday bailout days, and prey.
And I love you too.
I love shares twistin in the wind,
Pictures of Hanks friends,
Black Swans of the world, and the herd.
I love Treasuries tin cup,
Little fuzzy pups,
Bourbon in a glass, and grass.
And I love you too.
Apologies to Mr Tom T Hall…on this fine Sunday morning.
>>This is the single largest financial event in my life. The US Government debt just rose by $5T.
The debt of $5T isn’t like the traditional US Treasury bond debt as underneath there are real estate to backup the $5T. Now granted real estate will keep going lower at least until it reaches fair value by traditional measures (income, interest rate, property tax/insurance) but it isn’t a traditional debt where it is a blank IOU like bonds.
Does anyone have the true value of the underlying assets?
Fannie and Freddie had no idea.
The government has no idea.
I have no idea.
If Fannie or Freddie would have gone into default in three weeks (quite likely), where would the bonds be trading? Collateralized or not, the Federal Reserve has said “…the extent of the support
from the government is unlimited….”
‘the Federal Reserve has said’
Yeah, well the Fed said there was no bubble in 2004 and I said they were wrong. The Fed isn’t the government and they aren’t all powerful. The US government told the world they were going to democratize the middle east. I agreed with those who said this country doesn’t have the resources to do such a thing. Talk is cheap, especially in DC. And every action has a reaction, so let’s see what the currency and bond markets have to say.
BTW, my greatest hope has always been that the GSEs go away. That looks more likely than ever.
Ben it seems now that these entities will become more prevelant, not go away. These were always govt backed entities, it just wasn’t evidenced until now.
Remember - it is an election year..
“Yeah, well the Fed said there was no bubble in 2004 and I said they were wrong. ”
No Mr. Greenspan and Mr. Parry (SF Fed) said there was ‘no housing bubble”, other Federal Reserve members were not so sanguine.
Restrain Mortgage Giants, Warns Federal Reserve Chief Greenspan.
Byline: Ken Moritsugu
“Feb. 25–WASHINGTON — Federal Reserve Chairman Alan Greenspan warned yesterday that the rapid growth of mortgage giants Fannie Mae and Freddie Mac must be curbed to avoid a major risk to U.S. financial markets and taxpayers. …” 2004
>Does anyone have the true value of the underlying assets?
I don’t think “true value” exists in a once-in-several generation inflated market like this, but if one were to crunch some numbers and value all RE behind the $5T to traditional valuation measures and let’s for argument’s sake it is $3.5T (so another 30% fall in RE prices nationwide, including some foreclosure expenses, overshooting to the downside etc). So the *real* IOU debt (ie bad debt) is $1.5T is in this case.
I am simplifying it here but just pointing out there ARE assets behind $5T debt because houses aren’t worth $0, so it is not an outright IOU like Treasury bond with only a promised behind it and nothing else.
“…so it is not an outright IOU like Treasury bond with only a promised behind it and nothing else.”
Treasury bonds are backed by the future value of the dollar, which implicitly depends on future output of the U.S. economy (what the dollar is useful for purchasing) and future inflation (the price). The promise only amounts to ‘nothing else’ in the minds of those who have convinced themselves that the dollar is soon to hyperinflate. So far, no evidence…
bluprint: Freddie and Fannie are not going to become more prevalent. From what I’ve read, they will become relatively small entities. From Bloomberg:
“The [Freddie & Fannie] portfolios “shall not exceed $850 billion as of Dec. 31, 2009, and shall decline by 10 percent per year until it reaches $250 billion,” the Treasury said. Fannie’s portfolio was $758 billion at the end of July, and Freddie’s was $798 billion.”
It looks like the American mortgage market is going to continue to be constrained in the future, at least with respect to what the two GSEs have to offer the market.
>the dollar is soon to hyperinflate
No chance in my opinion. Read my mentor Stephen Roach’s commentary on the structure imbalances in the US economy and we are just getting started with the devaluation of the dollar in the long-run.
“…it seems now that these entities will become more prevelant, not go away.”
Where did you get this idea (or did you come up with it on your own)? My reading of the available information is that the GSEs will likely be shrunken over time down to a size where they will not dangle forever like a giant and growing Sword of Damocles above the global financial system’s head. It would have been best if they had been shrunk down to size years before today, but better late than never…
September 8, 2008
The diminished future of Fannie and Freddie
The US government’s near-nationalisation of Fannie Mae and Freddie Mac leaves various questions unresolved. Hank Paulson, the Treasury secretary, recognised the biggest of these in his speech on the rescue on Sunday: whether they should become public or private entities in future.
“Government support needs to be either explicit or non-existent, and structured to resolve the conflict between public and private purposes. And policymakers must address the issue of systemic risk.”
He is right that a choice has to be made.
…
The evidence is that the private mortgage market as a whole can survive quite well without a federal agency in the middle: most other countries do quite well without one. If it cannot, then taxpayers’ money should not be used to prop it up.
I hope you two are right, but it will be the first or one of the rare times where government grows only to relinquish that growth.
I imagine that fannie and freddie may go away in form, but to have the same operations continue under the direct perview of the govt is the substantial thing. If F&F are dissolved only to be replaced with something else which ultimately is lending as much as or more than f&F, then it can only be said they are gone in form, while in substance their operation continues under the umbrella of govt.
The only way that 5 trillion in debt would be realized is if everyone went into foreclosure and that is not going to happen. I was one of the ones in this country who bought a brand new house last year with a 75/25 loan. And I can tell you I am not going to go into foreclosure. Every payment I make has additional principal. At this point I am now at 95% LTV and because I am a teacher with many years I have very close to a guaranteed salary. And there will be many people just like me!
Will you stay, and continue to pay your mortgage and HOA dues when every third home in this ‘brand new’ subdivision goes into forclosure?
You know how every time a banana republic nationalizes a major industry? Like oil or steel production.
The U.S. just nationalized its largest industry.
I remember just last year on this board I was called a liar for pointing out that Phoney Mae and Fraudie Mac were taking on a huge amount of dangerous subprime and Alt-A loans. Are those deniers still here?
An unpopular truth often makes people angry.
I don’t believe for a moment that the bulk of the people on this blog would call you a liar for that. It was the common feeling on this blog. Are you sure you weren’t dreaming that? Don’t try to act like you were alone in those thoughts and that this blog was against that idea. Everybody here knew Fannie and Freddie were a disaster. Maybe you mistook this for a Yahoo! Finance board.
Ditto that. No offense, Jerry, but NYC’s got it right.
“This is the single largest financial event in my life. The US Government debt just rose by $5T.”
If I understand your point, it is that the stock market is going to have a very good day tomorrow, as the worst is behind us and a bottom is hence close at hand?
What kind of euphoria will be have in Monday’s Markets?
Will the dollar go way up again as it has been? It should be going down as Uncle sam cranks up the presses.
Will gold and silver continue to tank?
Will the dow go up 300 or more?
Your thoughts…
I predict this will actually, paradoxically cause an increase in the dollar compared to other currencies….more as a result of improving consumer confidence than from common sense. Most people don’t think the US gubmint will ever lose its AAA rating, it’s just a black hole for dumping bad debt.
Gold down $60, Silver down $4, Platinum down $80, Palladium down $30. DJIA up 600 points. As Hoz said, this is the biggest financial event of our lives, one that will bring down interest rates and allow the government to unilaterally modify and forgive loans for all the FBs. This is a real bailout, and since the government has shown it will do anything to protect housing prices as best it can, this may mean that price declines will slow substantially.
Transmutation transportation paper boarding passes are still being accepted for flights to safety…
Agree.
~Misstrial
Who exactly will be buying up all this goobermint debt at super-low rates?
At what point do these numbers and the subsequent “accounting” thereof reach a point of being so absurd as to render it all meaningless.
Today.
What Hoz said was, “The arbitrage is buy GSE debt, short US Treasuries.” This is not the same as saying interest rates are going lower, but rather suggesting that the now-explicit GSE debt guarantee implies some combination of higher l-t T-bond yields and lower GSE bond yields. Where this convergence leads is anyone’s guess, but generally speaking, loading an extra $5.3T onto Uncle Sam’s balance sheet would have the expected effects of weakening the dollar and increasing l-t T-bond yields to reflect a higher inflation risk premium.
Early morning trade: Reuters
The euro shot up around 2.8 percent to 156.88 yen , from 152.52 late in New York on Friday. It also rose to $1.4397 , from $1.4236.
The U.S. dollar climbed to 108.96 yen , from 107.14 on Friday, while the Australian dollar jumped to 90.77 yen , from 87.05.
Doubling the national debt is generally not considered an economic boon, and not good for the currency.
I agree. It’s not the government bailing out $5T in debt. It is we, the taxpayers. Add that amount to what you are now in debt for. Doesn’t this make precious metals attractive? If not, explain why this is not inflationary.
“If not, explain why this is not inflationary.”
I don’t expect anyone to offer any plausible explanations.
I suppose it is possible that Freddie and Fannie could simply give the houses to everyone who owes them money and tell the Chineese and other countries that they have lost their investments and will not get it back. In this case it is like a giant tax on the Chineese and Americans get free houses that are cheeper. This case it is not inflationary.
“…could simply … tell the Chineese and other countries that they have lost their investments and will not get it back.”
Er, wouldn’t the chance to do this have been at the point when the explicitness of the GSE debt guarantee was still in question?
“I suppose it is possible that Freddie and Fannie could simply give the houses to everyone who owes them money and tell the Chineese and other countries that they have lost their investments and will not get it back.”
No I think the government will assure the Chinese and other lender countries that the American Taxpayer will pay back every penny, after all the Government needs to keep borrowing and growing.
It seems to me that this take over gives the federal government title to 50% of all real property in this country. Anyone who cannot pay their bills loses their house to the government. With 25-50% unemployment in the cards, there should be plenty of properties that will go to the government.
Before now, only the state governments could claim title (via property taxes).
This is a VERY disturbing development if you care about liberty.
>With 25-50% unemployment in the cards
So Super Great Depression on hand, is that it, since *only* 25% unemployment during the “regular” Great Depression? Let’s all move to Chindia!!!
RE: This is a VERY disturbing development if you care about liberty.
Legions of of “chicken little” soccer moms concerned more about security than individual freedom will be thrilled-even though their kids are completely fooked!
You pinned it. This security issue is precisely why Objectivism and Libertarian politics is male dominated. Soccer moms will only be sorry when/if they get to the age to see their grandchildren serfs to the gulfstream do gooders.
RE: there should be plenty of properties that will go to the government.
They will be “recycled” at reduced cost to single mom’s; domestic minories; and new immigrants.
The Commies have won!
what does being a single mom, or a minority have to do with being a Commie? Are your some Aryan nation nutcase?
I think he means that, under the prevailing dogma of political correctness, the houses the government comes to own through foreclosure will be disposed of in a politically correct, communist manner, with all the typical “gimme sumthin fur nothin” interest groups demanding a piece of the pie: minorities, single moms, etc. Sort of like Section 8, but better (worse).
The Wall Street/home flipping/commodities trading crowd also has a “gimme something for nothing” mentality, but instead of seeking overt handouts from the government, they seek tax breaks and leveraged credit to fund their endless Ponzi schemes. I see no difference between the section 8 crowd and the McMansion crowd, other than the level of education.
Comparing tax breaks to welfare is like comparing apples to oranges. If I pay 35% taxes and the rate is cut to 25% then I am still paying a huge amount of my income to the government. How much taxes does the welfare crowd pay?
Unfortunately SaladSD, hd74man has to always blame a woman for something. He can’t seem to see that men should be held accountable for their actions also.
He isn’t blaming all women, just the irresponsible ones who choose to have babydaddies instead of real husbands. However, he should also blame those men who abandon their childrens.
RE: I think he means that, under the prevailing dogma of political correctness, the houses the government comes to own through foreclosure will be disposed of in a politically correct, communist manner, with all the typical “gimme sumthin fur nothin” interest groups demanding a piece of the pie: minorities, single moms, etc. Sort of like Section 8, but better (worse).
Thank you LA InvestorGirl.
I owe you a beer in Vegas.
RE: Are your some Aryan nation nutcase?
LOL~
Man, talk about hysteria when the anti- PC button gets pushed!
Right on, SF Bay Area Gal. I had been unaware that the terms “minorities” and “single moms” were synonymous with women.
As predicted repeatedly by yours truly, here comes EMINENT DOMAIN on a massive scale. The guberment seizing land and houses left and right for the *greater good*. Especially if Democrats get elected.
If the Republicans get elected, then they will just pass along even more of their debt to my generation and my children’s generation…all for the sake of preserving the precious undeserved tax cuts of the rich *for the greater good*.
But Eudemon, what will the gov’t and Dems. do with ‘em ? They can’t get rid of all of the empty ones around here right now. Probably build bridges to nowhere, except that now the gov’t. won’t have the gelt.
The last time I looked Paulson is working for a Republican President that nominated him and I believe at the time a Republican legislature that approved the nomination. Eminent domain on a massive scale brought to you by a Republican Secretary of the Treasury.
And the NY Times and enviro-nuts sure love it, given that they are getting property on the cheap or tossing others off theirs in the guise of Saving Our Planet.
And I agree, the Repubs are hardly our friends on this matter, either.
What the guberment should do with all the crap they’re going to seize is sell off what they can and use the rest for its energy value.
They won’t though. They’ll give it away to every societal leech they can. And make everyone who produces anything of value pay for the upkeep.
Cripes - I would think that one thing this blog has shown is that R vs. D are just two sides to the same corroded coin.
RE: here comes EMINENT DOMAIN on a massive scale. The guberment seizing land and houses left and right for the *greater good*. Especially if Democrats get elected.
Interesting you mention this, Eudermon, as this circumstance has arisen in the town of Millinocket, ME.
The town government is looking to seize thru Eminent Domain the the 37 megawatt electrical generating infrastructure of the former Great Northern Nakoosa paper mill from it’s current Canadian owners pursuant to their closing of the mill and the lay-off of the last 200 remaining
workers
The generator’s have the capacity to generate all of the town’s electrical plus the surplus will put another $15k into the muni’s coffers.
However, it’s small recompense for a 100 year old business which once employed 3000 men with the best wages in Maine, with town residents making the comment-Depression-What Depression
Hey Democrats. If your party is so good, how come the Republicans have a Ron Paul and you have no one that comes close?
Gee, maybe you missed it Bill, but Ron Paul is a persona ultramega non grata in Republican circles. He made it clear he wasn’t welcome at the GOP convention.
Paul still nominally carries the (R) next to his title, but his policy positions have absolutely nothing to do with the party at large.
Russ Feingold and Dennis Kucinich are Dems that are in Paulian territory. There, that’s two. One from each chamber.
(But I’m an independent.)
RE: here comes EMINENT DOMAIN on a massive scale. The guberment seizing land and houses left and right for the *greater good*. Especially if Democrats get elected.
If you think eminent domain and its use/misuse is a right v. left issue, you best do some more readin’, because you’re sadly mistaken. Its a greed and power issue.
ET,
I don’t even see it as a power/greed thing, per se. I strongly suspect it’s more a generational thing than anything else. If power and greed characterize the generations involved, so be it.
I’m falling more and more into the camp that swears by the four/five generational waves of mankind as seen over many centuries.
Both NPR and the NYTimes, in their summaries treated falling house prices as a catastrophe that needs to be stopped!
For example, listen to this NPR story:
http://www.npr.org/templates/story/story.php?storyId=94366330
And in the Times, Gretchen Morgenson says:
The companies are likely to need tens of billions of dollars over the next year, but the utlimate cost to taxpayers will largely depend on how and how fast the housing and mortgage markets recover from their current crisis.
For some reason, Ms. Morgenson didn’t see house prices that were 10x the median income as a crisis! In my view, the crisis is finally ending because prices are returning to what they should be.
They are, of course, just parroting what our Government tells us:
Paulson says:
“Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe,” Mr. Paulson said. “This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation.”
Paulson is full of BS . If the issue was credit availability ,the government could open up a new government loan company for lending on ‘New Money”to operate during a crisis period . The problem is losses and the problem has always been how to deal with
losses on paper already on the books .
Also, the additional problem is the lack of ability of buyers to qualify under more normal underwriting and that is a big factor in the government not being able to prevent the crash of the bubble
prices . You really can’t get private money to put up funds for stupid loans anymore because of the repricing of risk that has taken place .
In fact ,any loans made until the foreclosures are clear out and market price stability takes place and supply and demand hits the happy levels is a risky loan . The lenders or government don’t even know the real value of real estate anymore because of the fake bogus inflated prices that were based on faulty low down lending and crazy loans .
My guess is the government will try to re-spike the punch bowl with some easy money type loans .
I agree. They need to dissolve the GSEs and get out of the housing subsidy business entirely. Real Estate is indistinguishable from a Ponzi scheme and they should have cracked down years ago. Instead they are trying to salvage it.
That is bank speak:
Translated into English
Fannie and Freddie debt have been bought by a lot of foreign countries. Failure to get more foreign buying of Fannie and Freddie debt will cause incredibly high interest rates (think 18%) and I’ll be out of a job. If foreign governments don’t buy US debt, we are f’ked and I’ll be out of a job. Failure to secure foreign financing eliminates the republican party and I’ll be out of a job. It is real important that I keep my job, China said ‘guarantee and we will buy and let you keep your job’.
Argentina becomes U.S.
Alad, unfortunately, I think it’s the other way around. The US becomes Argentina….
More of a pun along the lines of “Argentina becomes us”…
ha
And if the Chinese lenders can make the US government use taxpayer money to bailout GSE’s then they can make the US treasury NOT inflate away our debt.
Its will take forever to pay off
You DON’T want to get between a NPR-listening limousine liberal and his/her yuppy lifestyle - supporting home equity!
Ummm, hate to break it to you: it’s not just the liberals who got rich off of leverage and speculation.
Actually, a real liberal is a great human being. I’m not talking about the savages who stole Bastiat’s term and spun it to mean the opposite.
Madonna, Bono, Al Gore, Joe Biden, Barack Obama are all conservatives. They want to conserve their station in life and prevent lower income people from achieving the American dream. I hate conservatives.
Hey Bill,
You also have some Republicans that want to conserve their station in life and prevent lower income people from achieving the American dream. I hate conservatives.
Good, God! That’s all I need to deal with….an urban, limosine liberal who blathers on and on about how grand they are for taking public transportation from their $350,000+ yuppie condo in the city.
“EVERYONE should live in high density areas, and be all carbon-footprint aware as I am!” Tra-la-la.
Mr. Paulson said. “This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation.”
———————–
He’s wrong.
If housing were cheaper (lower prices), families would have MORE money to budget toward savings, retirement, and education.
A failure of the GSEs would not preclude buyers from entering the housing market. The private market exists (see our own az lender) and there is A LOT of money on the sidelines just waiting for such an opportunity. Naturally, they will not be making 100% LTV loans nor will they charge abnormally low interest rates, and they will certainly want to ensure the borrower has the inclination and ability to pay back the loan. This, in the long term, is better for both lenders and borrowers AND home prices; as prices will be low enough for more people to easily afford them.
As I understand, Paulson is trying to keep the mortgage rates lower, so that the housing stabilizes. Would it really happen?
I’ve 1000 common stocks of FNM that I bought at $40. Is my 40K in the toilet now or I can wait for 4-5 years to see the stock price go up?
I am sorry to hear that. I don’t think common are worth much in any case. It may get a bump or not come Monday but now that GSEs are govt-run, the common shares (”owners”) are no longer really owners. Your only hope is that in 5-7 years if the RE market stablizes the GSE will be reverted to its original form and common made “whole” again, but that’s a long time and BIG if.
Common stock will be wiped out. Preferred may get a few cents on the dollar if they are lucky. There is no way they have enough assets to satisfy their liabilities, especially at this time.
Let them eat stock…
(with apologies to Marie Antoinette)
In the toilet and it stinks big time. No dividends and unlikely to get anything.
This is why you need stop loss levels on stock. If you loose 8%, get out and don’t look back.
The good news is that if this is not a retirement account, you can treat it as a capital loss in your taxes. You can claim 3k per year and carry it over. You’ll need to close out the trade in order to book it for this tax year.
Is there a way I can claim the whole 40K as a loss on my taxes instead of doing it for 13+ years (3K per year).
When we have to pay tax on the total realized profits, why not we are allowed to claim total loss?
“When we have to pay tax on the total realized profits, why not we are allowed to claim total loss?”
That’s a really good question and you should debate it with the IRS and see if they’ll relent.
You are limited to $3,000 in losses. I think at least part of that is to keep people from using long term capital losses to offset huge income in one year. And it is unfair and sucks, especially for the people still writing off huge technology losses from the early 2000’s.
However, you can sell some stock that has a gain to net out the losses. (And even if the losses are long-term and the gains short or the gains long-term and the losses short-term you can still net them out.) So if you sell $40,000 worth of FNM at $0 and sell $10,000 worth of WM at $50,000 (ok, not likely) your net tax is zero as the $40,000 loss and the $40,000 gain cancel each other out.
If you don’t want to take $3,000 for several years you can sell (and then rebuy) some winners which will basically make your basis much higher. (Be aware that you cannot do this with stocks that have lost money to counteract gains - you can’t rebuy losers for at least 30 days.)
Hope this helps.
The Gov’t gets warrants for 80% of the companies, dividend goes to zero. The stock holders are more or less wiped out.
‘Bend Over, Here It Comes (Fraudie/Phoney)’ form the market-ticker website:
“”The FX and Bond Markets will tell you what everyone thinks, along with commodities. Currencies open before futures, and futures before Asia. I will watch currencies in particular.
I have no idea whether the market will interpret this as “good news” or “aw cr@p!”; the facts say its “aw cr@p”, but the market has a habit of paying zero attention to facts for variable amounts of time. Witness Bear Stearns.
I think there’s a very good chance that the reaction will be extraordinarily violent, but which direction remains open to question - for a few more hours anyway.
In any event, this is what happens when Americans sit in front of the Boob Tube and watch American Idol instead of paying attention to what their government is doing.
We are now in the zone where mistakes can cause a government funding collapse.
Congratulations America.”"
See you at the bottom with 15% mortgage interest rates.
Best Wishes!
RE: In any event, this is what happens when Americans sit in front of the Boob Tube and watch American Idol instead of paying attention to what their government is doing.
Maine’s top rated radio talk show on WLOB-FM recently trashed their world/state/regional events discussion forum and replaced it with a 24 hour yackity-yak sports format, despite vehement oppostion from listerners.
Comment from owner…”I get more ad revenue from a sport based show. “People are “intense and emotional” about their sports”.
We are Wal-Mart Nation.
What has changed since the time of the Roman Empire?
“What has changed since the time of the Roman Empire?”
The Roman Empire had usury laws (unlike the US).
My opinion (prediction) We will suffer this:
http://en.wikipedia.org/wiki/Unintended_consequence
Was that a scary press conference or what?
Both Paulson and Lockheart looked completely nervous, making sure that they didn’t miss one word, or add one, to whatever the teleprompter told them to say…
Humpty Dumpty sat on a fall
Humpty Dumpty will bankrupt us all
All the bean counters and all the Fed men
Couldn’t put Humpty Dumpty back together again
Why does Paulson sound so hoarse??
He’s probably hoarse from doing so much preying to his maker, last night.
I was thinking more along the lines of yelling going on in some of those meetings this weekend.
I say we combine the 2 entities and rename it “Frantic”
fun facts:
We the people are now on the hook for $5 Trillion more than we were yesterday.
The stock capitalization value of Fannie & Freddie combined, is less than that of toy maker Mattel.
Throw another shrimp on the Barbie~
Thinking, good…
‘We the people are now on the hook for $5 Trillion more than we were yesterday.’
It’s interesting the logic that’s dished out these days. “We” are going to borrow money from outside the states to pay off people outside the states. Someone yesterday said this was a WalMart nation. IMO it’s the whiner nation. The biggest deadbeat FB in the world is the US taxpayer. Are you for paying what you owe? I hear it’s $500k for every man woman and child. Have you got that laying around? Does your neighbor?
Or are you for cutting spending? Is there anyway in heck the US will ever make good on this $50 trillion in obligations?
The US doesn’t have $5 trillion, so who is paying what?
I refuse to work anymore, in order to support our current government’s agenda, via taxation of my gains, squandered on their aims…
Well said, Ben. “We’ve” been spending money like drunken sailors without replenishing the kitty for over 25 years now.
What do you do with a drunken sailor,
What do you do with a drunken sailor,
What do you do with a drunken sailor,
Earl-eye in the morning!
Way hay and up she rises
Way hay and up she rises
Way hay and up she rises
Earl-eye in the morning
Shave his belly with a rusty razor,
Shave his belly with a rusty razor,
Shave his belly with a rusty razor,
Earl-eye in the morning!
Put him in the hold with the Captain’s daughter,
Put him in the hold with the Captain’s daughter,
Put him in the hold with the Captain’s daughter,
Earl-eye in the morning!
What do you do with a drunken sailor,
What do you do with a drunken sailor,
What do you do with a drunken sailor,
Earl-eye in the morning!
Put him the back of the paddy wagon,
Put him the back of the paddy wagon,
Put him the back of the paddy wagon,
Earl-eye in the morning!
Throw him in the lock-up ’til he’s sober,
Throw him in the lock-up ’til he’s sober,
Throw him in the lock-up ’til he’s sober,
Earl-eye in the morning!
What do you do with a drunken sailor,
What do you do with a drunken sailor,
What do you do with a drunken sailor,
Earl-eye in the morning!
What do you do with a drunken sailor,
What do you do with a drunken sailor,
What do you do with a drunken sailor,
Earl-eye in the morning!
Hoarse? He seems more jackass to me.
Why doesn’t the Supreme Court step in and order the Treasury department to wait so they could decide the Constitutionality of this $5T bailout?
Just as the $1 billion Chrysler bailout a few decades ago should have been denied, due to it being unconstitutional. Or the airlines bailout in 2001/2002.
I didn’t watch, I’ve seen enough political stage acting the last 2 weeks.
You missed a beauty…
The cast of Wizard of Awes was there~
The Cowardly Lying and Scare-Crow.
RE: The cast of Wizard of Awes was there~
The Cowardly Lying and Scare-Crow.
LMAO!
Geez, ‘Sane…Again, you’re killin’ me!
Get an agent will ya!
RE: the bailout of Fannie and Freddie,
The Beantown Sunday Glob’s front page story is panders to the lemmings, with a quote from some Columbia University stiff noting that the Federal takeover ultimately means a cheaper mortgage for J6P-but never mentions the US dollar in his pocket will become virtually worthless.
Treasury Dept. things to do list.
1. Prevent deflation at all costs. Keep interest rates low and print as much money as needed.
2. Bail out Wall St. to the extent possible, under the guise of preventing a freeze-up.
3. Redouble efforts to peddle that ever-less-valuable paper (Treasury bonds and bills) to suckers overseas.
4. Begin design of 1,000, 10,000 and 100,000 dollar bills.
If this is all true (which I believe it is, Bill), why do gold & other commodities keep crashing? And, they likely will plunge tomorrow.
Gold and other commodities are getting hammered because a number of big hedge funds are in deep doo-doo due to redemptions and losses. They are unwinding the positions they took during the last run-up in order to raise cash.
As someone else recently pointed out here, when you need money fast, you sell whatever you can get a bid on. And you can always get a bid gold and most other commodities. As we have seen, you can’t always get a bid on debt… See Auction Rate Securities for a recent example.
One gets immediate payment selling precious metals, but it takes 5 working days to get paid on stocks…
Why’s that?
Also just 2 banks shorted 10x the amount of silver in the whole comex last week…Where’s the shorting laws there? What’s truly amazing is in spite of the lower prices evrywhere is sold out of the most popular products. I just about lit a candle in thank you for this recent price drop…
I recently got in a heated discussion with the my BIL about PM’s where he thinks it’s foolish to buy, and not get any return. He was the same one who said house price won’t fall “you’re nuts”
I’d say 5T debt in one day, and stroke of a pen is evidence enough.
I guess I am just a simpleton when it comes to this stuff. But as long as salaries continue to decline (and they will) and unemployment continues to rise (and it will), RE will continue to plummet. I dont care what the PTB tries to do.
Just wait…consumer spending and confidence are dropping like there’s no tomorrow. More banks will fail including several big names (WaMu?). Negative psychology is picking up steam and will be very difficult to turn around.
I agree, LostAngels. I was out yesterday doing my estate sale thing and one of the nice old ladies tending one of the sales started talking about how now is the time to buy real estate before prices started going up again. I patiently explained to her that, barring a miracle, the market wasn’t coming back because most people just don’t make the kind of money to pay what people want around here. I explained that wages would have to go up dramatically and jobs would have to improve. She sort of got it, so I left it at that.
I usually cut the retirees some slack (some don’t always deserve it) because of their age and achievements. Many of the retirees here come from the midwest and most are decent people who worked in the great midwestern industries of yore, or are ex-military or ex-diplomatic corps. Many were engineers, people who actually designed and produced decent and useful things. But, wow, are many of them ever clueless and complacent. They’ve got their pensions, their Social Security, their investments, etc. Indeed, many saved in order to have those investments, so I can’t diss ‘em. But they truly live in a little bubble of their own around here, in a nice retirement community and are oblivious to how the world works now. I bet if their Social Security and pensions dried up, it would be a real eye-opener for them. Even more of an eye-opener is the crime they are starting to have to deal with from all the illegal immigrant spawn they used to give the old “kootchy-coo” and donate food to. Today, it’s golf cart rip-offs. Tomorrow, home invasions like some of the rest of us.
The ones who are going to really have it rough are the tail end Greatest Generation, not the boomers. They’re just not going to be able to assimilate the “rough justice” that’s coming. Boomers will mostly have enough time to adjust to new realities, although they won’t do it well or gracefully in many cases and some will sink, some will swim. And, I’ve met enough local Vietnam vets to know what some of these guys have enough cynicism and survival skills to cope.
All the retired people I know don’t know what’s happening and what is to come ,and all they know is that their dollar doesn’t go as far anymore .
You are painting retirees with a broad brush there.
I had lunch with my retired father yesterday. When I sat down in the dining room where he was reading the paper he immediately said - “have you seen the headlines?” and threw me section A with the Fannie/Freddie bailout in large black ink.
He was positive things were going to be getting really bad no matter what the politicians say.
I was talking to my octogenarian mom earlier today about FanFred, and she’s now pretty hep to what’s going on.
She only reads 3 daily newspapers, now…
I was just speaking about most of the retired people i know and not painting any kind of brush . The few retired people
that I think know what is happening are actually the over 85 year old people that I know .
The fact that they want to live off of their government subsidies after a lifetime of voting for politicians promising tax giveaways during times of war, natural disaster, and crumbling infrastructure makes me feel even less sorry for them…the boomers in particular should have their taxes doubled.
They have not put their fair share into the pot for far too long and deserve to pay the piper. It’s so unfair to us in the younger generation that we have to pay interest on 50 trillion in national debt while our parents lived beyond their means and sold out the prosperity that our more responsible grandparents left them to China, the Gulf States and India.
“the boomers in particular should have their taxes doubled.”
WTF? I voted Libertarian in every contest except one since I was eligible to vote in 1978.
I want your name and address an d SS # - I will forward it to the ailing Ted Kennedy and ask him to pass a special bill to double your income taxes.
“the boomers in particular should have their taxes doubled.”
well they won’t be able to retire
RE: But, wow, are many of them ever clueless and complacent. They’ve got their pensions, their Social Security, their investments, etc. Indeed, many saved in order to have those investments, so I can’t diss ‘em. But they truly live in a little bubble of their own around here, in a nice retirement community and are oblivious to how the world works now.
Spot on observation, Big “P”.
You describe my 80-something mother to a T.
My father left her quite well off when he died, but according to Peter Schiff’s Book on the coming collapse,
her portfolio contained virtually every financial asset he
claims will be slaughtered by the crushing of the US dollar.
So much for boomer inheritances.
I just got a $10,000 raise because I completed my master’s degree. Don’t assume that everyone is not getting a raise. Almost every teacher in this country gets a raise every year. And inflation in food prices are not the same everywhere either. I marvel at the prices some pay for food. I can buy a gallon of skim milk for $3.49. I just divided up 2 packages of super lean hamburger meat. I made 7 half pound burgers and paid $2.79 per pound. We also bought a 5 pound chicken for .99 per pound and a boneless pork loin for $3.49 per pound. Oh and Friday night I had fresh Coho salmon for $7.99 per pound.
I am not attempting to brag I just want to point out to all of you who think inflation is killing us that it is not a problem to as many as you think.
It’s not going to be a problem to those who now are old enough to reap the benefits of a rigged Ponzi system.
BTW…have you studied the so-called benefits and so-called raises that most new teachers are getting across the country? There’s no pension for most new teachers, and no matching on investments, either. Most new teachers are paying $150/mo. or more for health insurance - as provided by their districts. And - FYI - in the state of Colorado, teachers got a 0.4% raise this past year. How does that compare to the rate of inflation?
Once again - those Greatest Generation (pre-1938) and Boomer Generations (1938-1954) haven’t a clue as to what younger workers are dealing with re: compensation or future societal debt obligations.
Try saving for TWO retirements, WAman, (your own and then some other American’s retirement), with NO prospect of receiving a pension, Social Security or MediCare.
I think boomers go to 1964
ummm….Boomers are 1946 to 1964, your numbers are way off
This again….
Again, my definition of boomers is from 1938 to 1954. And it shall remain so. Accept it.
And, yes, the common belief that boomers are from 1946 to 1964 is every bit as arbitrary as the 1938-1954 years I maintain. Even more so, actually, because unlike the marketing rubes who coined the “Boomer” phrase so many moons ago to sell product and avarice, I’ve spent some time thinking about where more meaningful generational lines should be drawn.
I feel my take on the mindset and behaviors of people born during different eras is more meaningful and distinctive than some arbitrary years set on population statistics alone.
Those born in 1961 are very much dissimiliar than those born in 1947. Their life experiences (social, economic, philosophical, familial) are not at all alike. If you can’t accept that idea and the resultant long-term ramifications to you and yours, that’s your problem.
Remain in the dark all you want. Just don’t come whining to me looking for a handout once all the entitlement programs go bust in 10 years.
It didn’t come off as bragging, but very few people (including myself) are in your position.
I don’t have to do any analysis to know that the 3% raise I got on a relatively small salary still doesn’t even cover my increased food and gas costs. Inflation might not be killing me, but that pinching it’s giving me doesn’t feel very good.
“Almost every teacher in this country gets a raise every year.”
Not for long, babe.
Get ready for the revolt against the civil service.
The civil service is the only industry, writ large, that has not been hit by wage deflation, caused by outsourcing, the internet, wall st. etc. and so on.
There are too many of you getting paid too much money, which impacts my way of life directly. Where I live in Suffolk County NY, the civil servants have a higher median wage than private sector employees. This is ahistorical, and counter to the idea of the civil service which was lower wages in return for job security. And I am tired of seeing civil service royalty live better than people who take risks and have to produce on a daily basis.
My area also boasts 18% gov’t employment, which is not sustainable by any economic equation.
Four people can simply not carry the fifth person on their back for an entire lifetime. You should do a little more research as to where your paycheck actually comes from, and if the people paying the bill can actually afford it.
In other words, you are a cost, and expenses have a way of getting cut.
“Get ready for the revolt against the civil service.”
Yes I expect this to happen in California.
I realize people love to crap on civil service employees but here’s the real deal. Civil service employees get big fat paychecks from uncle Sam and that money greases the entire economy. If you cut back Government employment and salaries where will all the private sector folks get their money from? The sad truth about the USA and all Countries is this: We are all government employees, directly or inderiectly.
The REVOLT is Not so much the pay, but the inability to fire them quickly.
If you have a bad employee why does it take forever to fire them? then add in Naacp, or maybe gay rights etc…all delay the process to get the losers out and hire someone who cares about their job.
Plus how can Janitors make $100K in NYC…when most of the money is from overtime? Major work rule changes have to be imposed too….
you mean bad employees are members of naacp and are gays?
Jose:
well lets see…does a white person get fired faster then a minority in guvment?
Inquiring minds want to know!
darthrealtor,
You nailed it.
We don’t need to take civil service employees down. We need to bring the rest of the workers UP (and that includes workers in foreign countries).
There is a lot of money out there. Unfortunately, it’s not going to the workers. It’s going to the “investor” class — and all related financial/corporate leeches (disclosure: I am also a stock/option speculator).
I’d much rather see nurses, firefighters, cops, teachers, etc. making $100K+ than see CEOs, X-fund managers, etc. make millions per year.
If you really believe civil servants are overpaid and underworked, that would make you a fool for not joining them. Step right up!
Sigh. Immigrants may prop up the declining school populations for some time. Long enough?
Seems like around me a lot of schools are whining about how they are going to pay for increased operating costs (fuel, etc.) and still open all those new schools they just finished building based on the same population projections that helped fuel the housing bubble. Be glad your state isn’t $9B overdrawn like CA, or they might sometime have to cut back even essential services.
Why don’t you buy regular milk and add water if you want skim.
My friend is a teacher in California. He tells me that he’s not getting a full paycheck this month, and maybe not next month due to the lack of a budget. What is going to happen to you when Washington doesn’t have a budget?
“Attenting not to brag”…well, it appears to have failed.
Well, as the GOPs like to brag, they don’t operate in a reality based world, so this may all work out, or at least give the 1%ers enough wiggle-room to take their money and dump it in some offshore account. America first!
So, Shrub-Cheney can save a 5.4 trillion $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
dollar private company…and all we taxpayers get is a lousy $600.00 T-shirt that says:
“Be a Happy Camper”… on the front…&… “Hey, Snap Out of It! on the back.”
It’s not a private company, it’s a “GSE”, a freaky Frankenstein monster formed by grafting a New Deal social program to a venture capitalist firm and commodities brokerage. It is bigger, scarier, and twice as ugly as the sum of its parts.
What kills me is the accounting scandals that are coming out after all the scrutiny and “reform” over the past decade or more. Seriously, how can people on this board talk about ‘too much government regulation’ being the problem???…clearly, there was not enough of it.
“how can people on this board talk about ‘too much government regulation’ being the problem???…clearly, there was not enough of it.”
There’s never enough, that’s the problem. As long as corporations (and legislatures) have legal privileges not available to the rest of us, the legal system will be incapable of containing them.
To maintain otherwise is akin to saying that communism would have worked fine, if only there had been more regulations.
You can’t force the gov’t to uphold the law if they have made up their mind not to. All the hearings and other fluff was for plausible deniability, it’s been clear for years. A couple of “tells” were the refusal to even consider delisting them and the “hands-off” approach to F. Raines, clearly he knows where some bodies are buried.
Clearly there was enough regulation, but the regulators were not allowed to interfere with the operations of Phoney and Fraudie. Accounting fraud has always been a crime. Take an auditing course and you will see how many laws are on the books regarding accounting and financial fraud. There are entire law firms that specialize in it. The problem is not lack of laws, but lack of enforcement.
And the losses of F&F could of been kept to a lower level with the melt-down because they were capped at 417K . So ,Congress and the Senate has to pass a bill increasing the loan limits to over 700k so the losses will be more extreme because of the new loan limits .In a declining market this move never made sense . In fact ,all the moves the Powers have been making in the last 16 months brings us to the government taking over the problem of the housing bust . I expect anything and everything from now on .
anything and everything that is bad and stupid
Government created the corporation.
Govt created the GSE.
Govt (via the fed) poured fake liquidity into the market causing a bubble.
Govt is now dumping resulting losses onto the taxpayer.
Seriously, how can people on this board talk about ‘too much government regulation’ being the problem
What I can’t figure out is how people who want more govt intervention can’t understand they are asking for more of the same. You are already getting what you are asking for. They’ve been giving it to you for decades already. And you respond with “Thank you, may I have another?”.
Ode to Chuck Berry…
I’m gonna write a little blog story
Gonna e-mail it over the airwaves
It’s about a rocky financial record
I want my Treasury Secretary to play.
Roll Over Fannie & Freddie, I gotta hear it again today.
You know, my temperature’s risin’
And the market’s about to blow a fuse.
My portfolio’s beaten within
and my soul keeps on singin’ the blues.
Roll Over (and play dead) America and Bloomberg tells us the news.
I got the gambling pneumonia,
I need a shot of absinthe and blues.
I think I’m rolling 7’s, line out
Sittin’ down by the rhythm review.
Roll Over Fannie & Freddie rockin’ in two by two.
Well, if you feel you like it
Go get your loan, then reel and rock it.
Roll it over and move on up just
A trifle further and reel and rock it,
Roll it over,
Roll Over Humpty Dumpty rockin’ in two by two.
http://www.youtube.com/watch?v=fGQYlIjKpt8
My apologies to AC/DC…
(Cue Whole Lotta Rosie music)
Wanna tell you a story
Bout a gov’ment I know
When it comes to lovin’
It fails to show
It ain’t exactly pretty
Ain’t exactly small
More than 20 million strong
You can say it got a lot
Never had vermin
Never had vermin like you
Doin’ all the things
Doin’ all the things you do
Ain’t no pretty story
Lyin’ about saving homes
Givin’ all you got
Weighing 280 million stone
You’re a whole lotta vermin
Whole lotta vermin
Whole lotta posin’
And you’re a whole lotta vermin
Funny how you do it
Lyin’ to me all day long
Only wanna turn
Turn the money spigot on
All through the day and night
Right around the clock
It’s no surprise
Oh you never stop
Cause you’re a whole lotta vermin
Whole lotta vermin
Whole lotta posin’
Whole lotta posin’
Whole lotta posin’
And you’re a whole lotta vermin
Well Alrighty Then: One for Mr. Paulson from a cheerleader
Oh Henry it’s a crime,
Such a crime it blew my mind.
Hey Henry (Hey Hey)
Hey Henry (Hey Hey)
Oh Henry it was time,
It’s a crime you blow my mind
Hey Henry (Hey Hey)
Hey Henry
Oh Henry cross the line,
Buy some banks and they’ll be fine
Buy Fannie! (Hey Hey)
Buy Freddie! (Hey Hey)
Oh Henry it’s a sign,
It’s all fine the loans are prime
Buy Fannie! (Hey Hey)
Buy Freddie!
Hey Henry
You’ve been around all right
and that’s a little wrong,
You think you’ve got the right,
But I think you’ve got it wrong.
Why can’t you say goodnight
So you can buy my loans Henry,
Cause when you say you will
It always means you won’t
You’re giving us some thrills
Henry, please baby don’t
Even if you’re right it sure didn’t go as planned
Henry!
Chorus
Oh Henry what a pity you don’t understand
You’re flying in the dark
But you think you have a plan
Oh Henry you’re so witty
Can’t you understand?
Its guys like you Henry
Oh what you do Henry
Do Henry
Don’t break my bank Henry
Now when you gobble Fan and Fred
The world is gonna know
Every time you move
They line up for the show
There’s nothing we can use
So please say no Henry!
So go on and give it to them
Anyway you can
Anyway you want to do it
They’ll take it like a man
Oh Please, Baby Please
Don’t leave me in the scam Henry!
Chorus
Oh Henry what a pity you don’t understand
You’re flying in the dark
But you think you have a plan
Oh Henry You’re so witty
Can’t you understand?
Its guys like you Henry
Oh what you do Henry
Do Henry
Don’t break my bank Henry
Oh Henry what a pity you don’t understand
You shot them in the heart
And they’re striking up the band
Oh Henry it’s so shitty
Can’t you understand?
FADE…to black.
Excellent!!!
The new black: A forward “reverse” mortgage loan:
There’s just no end to the “financial innovation” these cockroaches can create is there?
“”Under Grander’s My Equity Freedom program, the owner of a $500,000 house can receive a $71,429 lump-sum payment in exchange for agreeing to share 50% of future appreciation.”
New industry offers cash to owners in exchange for a share in the future growth of their home’s value:
http://www.latimes.com/business/la-fi-harney7-2008sep07,0,4971446.story
OMG. Dumbest. Idea. Ever.
Future appreciation?
Someone didn’t get the memo.
My IQ slid a few points reading that one Hwy!
Leigh
50% of the appreciation will be around 50% of the value if inflation roars for a decade or so.
And the b*st*rds will make money running this scam, I’ll bet.
I wonder if they provide lube with that JT?
Let’s see.
5+ Trillion dollars of debt tacked onto the US balance sheet, rising unemployment, declining value of the assets underlying the Fannie/Freddie balance sheet, commodity inflation, foreclosures and late payments rising, huge trade and government deficits, 12 billion month Iraq war (with Iran and Russian heating up)… The list of really big problems is too long to list.
I’m going to watch the 5-10 year bond markets. The 10 year is paying 3.70%. as a “safe” investment?! The logical conclusion should be a big jump in long term US treasuries interest rates. I’m thinking we are going in the direction of Argentina.
Add to this a bloody nasty political election that will leave 1/2 of the country hating the other half. A house divided against it’s self will surly fall.
Good luck.
“Add to this a bloody nasty political election that will leave 1/2 of the country hating the other half. A house divided against it’s self will surly fall.”
Exactly. Say what you want about Pat Buchanan, but he hit the nail on the head about how Americans lose either way this election goes.
Let the culture wars begin again.
I don’t think the culture wars ever stopped, they just change form.
well there always is RALPH NADER……………..
Nader is the only prez candidate with principles that aren’t changed by each news cycle. He knows that we are getting screwed by the PTB, but the people seem to prefer getting screwed and lied to instead of electing someone who tells them the truth. Since the truth sucks - just ask Jimmy Cater about what happens when you tell the American people the truth - people would rather live by the lie of the fantasy.
Let’s see. Nader prescription: “From each according to his ability to each according to his need.”
No thanks.
“Exactly. Say what you want about Pat Buchanan, but he hit the nail on the head about how Americans lose either way this election goes.”
P.Buchanan&Co have done a masterful job at splitting the populist and catholic vote. He’s done it well for 25 years. Listen to his rhetoric and even I agree with him until he endorses a candidate. His rhetoric and his endorsements don’t align *at all*.
You did an excellent summation, Bluestar. I just bought 22 more oz. of silver today. I’d buy more if Anthony would email me - Anthony, my offer still stands. 100 of your maples, $ 3.00 over spot, that’s $ 15.29 per maple, I will put the $$ to you on Paypal tonight. Feel free to email me @ Oakash1011@aol.com. Or feel free to make counter offer
You can try http://www.apmex.com if Anthony gets second thoughts. I think I saw that they still have some in inventory.
Well, I just bought 22 oz. of various types of silver somethings ( actually 2 rounds and 20 American eagles ) today, so my silver lust is temporarily satiated. Plus, Anthony doesn’t seem so eager for my “hot” offer. They’re goin’ nuts on ebay, though. Lost all of my gold bids. They were topped w/in an hour. Wow.
They’re goin’ nuts on ebay, though.
Yes its kinda scary
Funny about half hating the other half. Both the Democratic candidates and Republican candidates are conservatives, two peas in the same pod.
They want to conserve their elite stations in life.
In 4 years or 8 years J6P will finally say mea culpa and clearly understand why.
He will look in the mirror in 2016 and say…
“I asked for universal health insurance. My neighbor is very fit and I’m obese. I stole from my neighbor to pay for the diseases my obesity caused, while my neighbor only gets an annual physical. Mea Culpa…I asked for forced family leave from work and won it. I stole from the childless workers in my state so that I could be home for my newborn…How come the U.S. now has European style double digit unemployment now? Yes, now I know. yada yada yada.”
“…How come the U.S. now has European style double digit unemployment now? Yes, now I know. yada yada yada.”
I fear the government loves this though, it can control everything and grow giant. ugh.
The US would have double digit UE if the unemployed were all counted, but then again crap stats are what keeps us great.
I learn all I can about housing-related financial stuff, but I get pretty lost when it comes to these macro-problems and large housing-related entities. Can anyone take a crack at these stupid questions I have?
1. What’s the root cause of Fannie and Freddie’s failures? Bad debt and stupid loans? Is it large numbers of defaults that finally brought this thing to a head?
2. Who ultimately directed lending standards at Fannie and Freddie and allowed people to dump outrageous loans there? Can he have their head(s), NOW?
3. As far as politicians go, who was most responsible for overseeing these GSEs with so-called “implicit government backing”?
It ticks me off that Washington went from “No problem, the economy’s fine.” to “Oh my gosh, we better bail Fannie and Freddie out before the whole system collapses!” in just a few years. Or even months.
1. Governmental interference
2. Congressional Democrats
3. Frank, Schumer, Reid, Pelosi, Bush
Considering the GOP had a monopoly on all three branches of government from 2001-2006 that coincides with the housing fraud years, you might want to rethink the blame.
Don’t forget Paulson ,Senator Dodds and friends .
In response to number 2 question . I believe a lot of really bad higher loan amount paper has been dumped on F&F in the last 12 months after they raised the loan limits . Some people might not agree that this happened . I just wish I could get the answer on how much debt was bought in the last 6 to 12 months by F&F .
Also ,at some point in the housing boom ,F&F started buying some of the sub-prime sort of loan bundles . Of course this would of been limited to loans that were smaller loan amounts because of Fand F
loan limits ,(which Congress/Senate just changed ). Also ,because so many builders and sellers took advantage of F&F
loans that allowed seller assistance in the down payment ,the default rate on those loans are around 40% (a scary percentage ).
You’re not looking back far enough. The real question is who’s responsible for the housing bubble. ‘Cuz without the bubble there wouldn’t be the huge declines in values that we’re seeing now.
“who’s responsible for the housing bubble.”
all those idiots on “million Dollar Listing”
really its the borrowers of the money thats the way I see it. But what do I know I rent
Greenspan…for dropping rates so low and forcing lenders to go out on the risk curve for higher returns. You had to go into risky investments just to break even (real terms).
I think this is exactly what they (Fed, member banks and investment firms) wanted.
Tons of profit was made during the credit bubble. Those players are gone, and the hapless taxpayer is holding the bag (convinced he is winning because “they” are supposedly trying to prop up housing prices). Suckers!
Let me congratulate Ben and all the other great members of this blog. You guys nailed this. This is takeover of Fannie/Freddie is what this HBB board has been predicting since at least 2006… Now the REALLY hard part is seeing what’s next. I’m looking forward to the debate.
I’m predicting it will take 3 more years from here before we hit bottom both in housing prices, the stock market and falling GDP. At that point maybe we can start talking about long term recovery if China/Brazil don’t crash too.
The book “The coming collapse of the dollar - and how to profit from it” published in 2004 by Turk & Rubin has proven amazingly accurate with what we’ve seen so far–including the “ticking time bombs” of Fannie and Freddie. About the only thing they’ve been wrong on is the price of metals, thinking gold would rise to $5,000/ounce.
I remember an interview by Marc Faber a year ago when he predicted metals were excellent long-term, but that he felt there would be an event just prior to their parabolic uptick where they’d decline a fair bit. Maybe this is the calm before the storm in metals?
CCC, I seriously think you are right.
I like Dr. Faber. Even he said, a few days ago on Bloomberg, that Thai politics are confusing. He lives here.
a low down dirty shame.
USA, a developing nation:
WASHINGTON — The federal highway trust fund will run out of money this month, requiring delays in payments to states for transportation construction projects, Transportation Secretary Mary Peters said Friday.
The trust fund — used to help pay for highway and bridge projects — will run about $200 million short of its commitments for the fiscal year, which ends Sept. 30, Peters said.
http://seattletimes.nwsource.com/html/localnews/2008161902_roads06.html
A Billion Dollars to help rebuild Georgia, but not one Cent left in the transportation trust-fund…
According to the CATO Inst, the real foreign aid budget is around $50 BILLION per year. Then we could cut around $100 BILLION from the defense budget if we would stop expanding our military into every corner of the world. The Founding Fathers called for a military to defend America, not the rest of the world. I still don’t know why we have military bases in Western Europe, Japan and South Korea when they are all strong enough to defend themselves.
Jerry, exactly right.
How many years must we criminalize marijuana and cocaine and other hard drugs, the illegality which finances terrorism?
How long must we have laws against prostitution, when it’s a successful business in Amsterdam and Nevada?
How many years must we violate the Constitution and have fit taxpayers pay for the health care of obese people or smokers when Obama socializes health care?
How many years must America be a policeman to the world, meddling into the internal affairs of other nations, inciting terrorism and hatred against Americans?
Yes and How many years must we be dependent upon natural resources from the same countries that hate us?
The answer my friend, is blowing in the wind. The answer is blowing in the wind.
“The federal highway trust fund will run out of money this month ….”
For a guy who considers the dollar a worthless fiasco you certainly post a lot of articles that show a strong demand for the thingys.
“The trust fund — used to help pay for highway and bridge projects — will run about $200 million short of its commitments for the fiscal year, which ends Sept. 30, Peters said.”
Does the fact that they are running out of money make them bailout-worthy? Everyone knows that the U.S. economy would grind to a halt without its automotive infrastructure.
Sorry, but you’re still ignoring the elephant in the room: social security payments and the other entitlements.
The social security elephant will be taken care of by the postponement of retirement, IMO. Working ’till seventy and beyond will become the norm.
anyone buying real estate in the southeast?
Hurricane Ike grew into a bigger threat to Florida and the Gulf Coast Sunday as it roared through the Bahamas mid-morning, with forecasters expecting it to gain in strength as it approaches Cuba.
At 11 a.m. today, the National Hurricane Center issued a hurricane watch for the Florida Keys, and said Ike was “an extremely dangerous Category 4 hurricane.”
http://www.nytimes.com/2008/09/08/us/08ike.html?ref=us
Well, if they’d give it to me for $ 50.00 per (formerly valued) $1,000, I’d buy some. Otherwise, uh, no. And maybe not even then. A couple of months ago, went with (reluctant) husb. to see a foreclosed $31,500 rental in a nice working class city one over from ours. Walked the property. Decided that the best thing standing was the garage. Didn’t make an offer. Haven’t looked any further. Cash IS King, I guess.
We’ve seen some profound changes in our weather (8,000 dry lightning strikes in California a few months ago, et al) in ways nobody can ever remember happening…
Here on just the other side of nowhere-last fall, we had an electrical storm with flash lightning and cloud-to-cloud lightning.
I’ve never seen this phenomenon in California, and the day after, I ran into a lady that’s been here since 1933, and I asked her if she could remember anything like it?
She shook her head, a rather emphatic NO!
Climate Change is the Joker, in our House of Cards…
Maybe it has happened but she’s too freaking old to remember. She’s only been around for 75 years while the earth has been around 4 billion years. The climate is changing as it always has. I would be scared if it stopped changing
The weather change in California was so severe it made sunspots disappear for an entire month.
Oh, please. Everyone knows the lack of sunspots is Bush’s fault.
Will gold and silver really plunge by that much on Monday ? I don’t think so. What’s left to put your wages and savings into ? Already have stocks. Already have bonds. Already have cd’s. Already have 3 checking accounts and two savings accounts. Already have two houses. Already have one mortgage. Don’t want anymore of those. Already have 3 old cars which still run well. Already have food. Already have one kid who’s grown up. Don’t have any guns. Maybe silver and gold are good.
Does it really matter what happens on Monday, if you are already positioned for success, no matter what happens?
But am I ? Are we ? Do we know that we’re “positioned for success ” ? Who knows ? Nobody that I know. Everybody “thinks” they know, but nobody really knows. NOt no one.
Have you got your health? If so then you are positioned for success. If you don’t then you are screwed.
Don’t take my word for it; Go ask any rich guy that suffers from poor health.
(Money is the easiest thing in the world to replace.)
combotechie… you bring up a good point, something to remember in tumultuous times. Wealth all starts with health.
On the hurricane front, I hope no-one is mauled or worse by the Cat 4 storm. I recall Andrew blowing Homestead to smithereens. Glass shards still stuck in crooked telephone poles six months later - that kind of damage.
But I do have a few shares of US refiners with non-Gulf exposure, beaten down guys that could use a lift.
I was speaking financially only, combotechie, but of course you’re right. My husband & I are very happy to have found each other, have been in a stable 10-year relationship, and spent the weekend doing the simple things that satisfy the soul but don’t cost an arm and a leg. Talked, walked, played with the dog, marital bliss, went to an apple orchard. Called daughter who’s former Fannie Mae-employed finace’ is flying home to India tomrrow, but she didn’t reply. She’s getting engaged over there in a formal Hindu ceremony at Christmas, and then we’re flying over for the big wedding next summer. She’ll be teaching in Mumbai in a foreign school next year. It’s life-changing, of course. I’m upset because she’s moving so far away, but happy that they have found, what used to be called, “true love”, as far as I can tell. He’s got some job interviews lined up in the banking industry over there. Bright guy. So yes, I am positioned for success, as far as life itself goes. And, thank God, we have roof over our heads with a fixed-rate-mortgage we can afford, a $ 4.60 chicken my husband just took out of the oven, homemade Jewish chicken broth soup we unfroze earlier, and some veg’s for dinner. Also rice. And, we both are fortunate enough to have jobs to go to in the a.m. Our homemade lunches are already packed and our clothes for tomorrow are laid out, and my gas tank is filled. It’s not a McMansion, but it sure as heck is the American dream, for us.
If you have your health, you are rich, until the dumbocraps socialize health care and force you, who only gets an annual physical, to pay for the house-priced bypass to the obese or the smoker who partied hardy.
I hate socialism.
Dear Bill,
Are you aware that people who lead healthy lifestyles also contract nasty, expensive diseases? And get in nasty accidents they might have avoided if they’d been sedentary on the couch? It happens every day. I hate absolutism.
Thank you, catspit.
Sometimes, it seems Bill doesn’t quite get it.
I’ve seen far too many healthy people get very, very ill while those who smoked, drank and partied their way through life live well into their 80s.
While living a healthy lifestyle is a good thing, it does NOT prevent us from getting very bad diseases and getting injured.
How about placing some of your wages and savings into something of extreme value? TIME.
Go get yourself some beer, a golf cart, a labor-saving device. Go wash your car on the driveway. Go pull some weeds. Call your kids, grandkids…set up a day for everyone to get together and do something fun. Go see a movie. Take a nap in a nearby park. Go watch a game of peewie football. Eat some ice cream.
But I find it more and more difficult to call the trends now . I knew the stock market was going to have a zig-zag pattern for a while ,but now I don’t know . I beginning to wonder what would happen if the government arranged it so fixed loans would go out at 3.50%.
We’ll refinance the mortgage on our residence, of course.
Auto industry seeking up to $50 billion in government loans to modernize plants
http://biz.yahoo.com/ap/080907/automakers_congress.html
“This is not about benefiting Wall Street,” said Ford Motor Co.’s President of the Americas Mark Fields, referencing recent federal support for the investment firm Bear Stearns and troubled mortgage companies Fannie Mae and Freddie Mac. “This is benefiting Main Street, the working men and women. The auto industry is part of the backbone of the U.S. economy.”
“This industry could fall down, literally, or be absorbed if they don’t get something in place very soon. I think it’s that severe,” said Rep. Joe Knollenberg, R-Mich. “Something has to happen pretty quickly because they can’t compete paying 15 to 20 percent (interest).”
There will be plenty of corps sticking their hands out for their share of the taxpayer pie. With elections coming up, the congressional critters will be signing checks over to whatever business wants one. 5 trillion here, 50 billion there; after a while that adds up. Hell with crumbling infrastructure and sub standard schools, we need to bail out sub standard businesses that have laid off/fired tens of thousands. How about some cash for manufacturers that have off-shored thousands of jobs? Where’s their handout? Shouldn’t we bail out Kodak for not knowing that digital cameras were going to be their demise. They have given the boot to 40k workers, so give them some cash. Homebuilders are going to need cash to survive, so give them a few billion. I’m sure there are other failed or failing businesses that need free cash, yeah, the airlines need some billions because fuel is expensive - give then 50 billion or so. But make sure you make it harder for J6P to file for bankruptcy because of bills generated from no health insurance or job loss. Screw them, they are a burden - make them indentured servants. Wait… what about the trickle down theory? I see, it’s now the trickle up theory. Free market clowns only want a free market when it’s convenient for them. Overpaid CEO crud cuts wages, lays off thousands; yet they make millions off of tax deferred payments, options, lesser taxes for capital gains and every other scam they can lobby congress for. I haven’t seen one of these corporate pigs say they will sacrifice any of their millions in salary for the sake of the company, but they don’t mind begging the taxpayer. Rant done - for now.
“what about the trickle down theory?”
The trickle-down theory does in fact work in practice. What trickles down is a form of toxic diarrhea.
Yes indeed 8 years of Bush and his gang of republicans have really srewed up this country. And now the guy who has helped screw it up for 26 years says he can fix it. LOL
http://twitter.com/natfriedman/statuses/912311260
Ford cant sell its 65mpg car in America because WE HATE DIESEL!
You mean the enviromentals who also hate hydroelectric and nuclear energy.
I consider myself to be aware. I’d be all for nuclear energy if you could tell me what we’d do with the radioactive waste (and putting it in a cement vault on top of an active earthquake fault, 22 miles from a major water source doesn’t sound like a good idea to me.)
I’d buy one. I don’t even think it’s for sale. Ever seen a commercial for it?
Nope. It doesn’t get the profit margin of the Excalade with spinners.
I’d buy one also MattR. I’ve never seen a commercial for it either.
diesel is more efficient and doesn’t explode I don’t know why its hated? Smog ?
re diesel: When diesel fuel burns in an engine, the resulting exhaust is made up of soot and gases representing thousands of different chemical substances. 90% of the soot consists of <1u diameter particles that can be inhaled and deposited in the lungs. Diesel exhaust contains 20-100 times more particles than gasoline exhaust. These particles carry absorbed cancer causing substances known as polynuclear aromatic hydrocarbons (PAH)’s.
RE: Rant done - for now.
BizarroW for Prez! (stands up applauding!)
hd74man, may I ask what organization are you lobbying for and how much can I count on you for support?
Condo in Palm Springs, old lady passes, someone inherits, neighbor tries to sell before it goes on mls.
One week ago the neighbor tells me it is 295k, later we peel the price label back to see it was 365k, and now the guy keeps calling me saying WE are the best ones for this condo, he doesn’t want to take the “other offers”. Just make and offer at this low price and next year it will go up 100k+. And I would make the profit. hahaha
I said, nicely, no it won’t go up.
Do they make a new tax for us to pay the 5 billion or will we just keep lending our money to the gov for 1.5 %?
Will people refuse to take the help?
Will borrowers be forced to show all the fraud in the loans, finally?
Help, I am getting scared again.
I tried so hard to turn off the background noises this summer. But the voices of dread have reared their ugly head.
PB, can we have a mortgage sermon?
I need some faith today.
I need one more shopping spree so I can die of shopper’s high.
You go ouro gal, you go. Just breath deeply.
Eventually home price inflation will make housing all good again, or so the PTB secretly and fervently hope.
Here ends the sermon.
Inflation, or hyper-inflation, will cause house prices to rise again AND make our govt’s debts easier to pay off. Just don’t mention the downsides.
I guess PMs are in my (very) near future.
BTW, are there STILL folks here who think deflation will begin in the near future?
I was up for deflation until this free money give away. I still don’t see how they are going to get this free money into the paychecks of j6pk, but with the goverments williness to cram down mortgages the freefall in foreclosure may be put to a stop.
If they do cram the mortgages for the FB’s I hope they add a no Heloc ATM clause to the mortgage.
This isn’t the 70’s and I don’t see wages getting much of the inflation that is coming our way, so $10 for a gallon of milk is not likely to sell unless the PTB increase min wage to $20 per hour.
–
“And let me make clear what today’s actions mean for Americans and their families. Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe. This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation. That is why we have taken these actions today. ”
All in the name of helping Americans. With friends like these who needs enemies.
Jas
Yep. Seems to be against the spirit of individual freedom and responsibility, and limitations on federal government power, in the Constitution.
Since government meddling in the economy has a consistent losing trackrecord, I’m certain this medicine will be worse than the disease.
“A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance.”
because none will loan us money if we don’t pay them back
Its becoming clear to me who is in control
Imagine foreclosures handled by the IRS.
Imagine loan applications scrutinized by the FBI.
Imagine Federal Real Estate Taxes.
The unintended consequences of the “biggest financial event of our lives” have got to be huge. My bet is that it will nail the lid on the real estate coffin one way or the other.
I am so glad I do not rent a house from the US of A.
.
We may have just witnessed the end of CONsumerism as we knew it.
Not a bad thing, really.
If you are a dj it is a sad day………I remember 5 hour monthly booze crusies for Bear Sterns Merrill Lynch, women dancing half naked….singing playing Trini Lopez If I had a hammer around the staute of liberty……….or only in america jay and the americans….or yes james brown……
fun time all gone for more sedate events. The mid luxury market all gone….
it’s official now, all savers and profligate citizens alike will be
footing the bill together…we the people of the United Socialists
of America.
“May you live in interesting times.”
Interesting times indeed.
We could all move to Alaska, the socialist state. No income tax, no sales tax, annual oil subsidies for every citizen. drill baby drill, says the frontiersmen. Per Wikipedia: Alaska has the lowest individual tax burden in the United States, and is one of only five states with no state sales tax and one of seven states that do not levy an individual income tax. To finance state government operations, Alaska depends primarily on petroleum revenues and federal subsidies. Per capita federal earmarks: $51.19 national average, $506.34 Alaska, and $1,000 Wasalla. Ahoy matey’s.
I already followed that advice
You still have to pay federal taxes and a higher cost of living though.
Man….. I bet running a state that has nothing but surpluses and excess revenues takes a person with superhuman strength…. How does one individual actually do it all?
Who’s in charge of this damned Congress that gives them so much money?
Could it be “we the people?”
We the people reelect over 90% of these clowns year after year. The only congressional rep that is any good is the one in the district lived in by the voter. Very strange.
We the people reelect over 90% of these clowns year after year.
We have met the enemy, and he is us
- Pogo
Duh.
Isn’t CONgress’ approval rating in the single digits? That’s what happens when you put Republicans in charge.
Oh, wait.
“We could all move to Alaska, the socialist state.”
You should certainly take the opportunity to go there if this sounds attractive. I personally would consider moving there, but my wife would not be willing to reside in a place where the temperature dips far below zero in the winter, and the longest nights last 24 hours. Given the rich base of natural resources for the taking (fish, petroleum, etc), and the large number of potential workers who might be willing to live there if not for the climate and daylight availability, it makes good economic sense for Alaska to attract a labor force by subsidizing it.
Depends on where you live in AK. I worked in Nome for a couple summers and saw snow each month except for July, but those 24 hour days are memorable. My flight from Kotzebue to Anchorage on October 11 had to wait for blizzard conditions to clear before takeoff. Juneau and Anchorage winter temps rarely get below zero. Fairbanks can range from -40 in winter to 95 in summer, so there is a temperature for everyone in AK. The oil workers in Barrow get to have fun with average mean of -10 in Feb to a relatively warm mean of 46 in July. Those long winter nights would take some getting used to; the shortest amount of daylight in Fairbanks is four hours, Juneau and Anchorage six hours, Barrow zero hours/zero minutes - ouch. Probably more than you needed to know, but it’s a fascinating state to visit.
Bizarroworld,
I was in Fairbanks in the late 70s’ during the month of January. A free one month stay courtesy of the U.S. Army.
I loved every day I was there. Sun rose at 10 set at 3. Was very lucky to see the Northern Lights. Had some clear days and clear nights.
SanFranciscoBayAreaGal, circling in a helicopter above angry musk ox, seeing black bear lounging along the side of the road, caribou wandering the tundra and living with the biggest, most fierce mosquito swarms in the world are also fond memories.
While the conditions are not always very comfortable, they are very memorable.
That’s interesting. I thought the oil companies pay the big bucks to attract workers to places like Dubai. Why wouldn’t the same hold true in Alaska, especially since the oil “is for the taking.”
Every tomato costs three dollars, though. Maybe five during winter.
I think the members of Congress are as dumb as a box of rocks!
The Bush admin asked Congress for War power authority just to show the UN we were united. They didn’t plan to start a war. Ya sure
A couple of months ago the Treasury asked Congress for the authority to bail out Fannie and Freddie, just to calm the markets. They saw no need to actually bail them out. Ya sure
I think in the up coming election we need to focus less on the Presidential pic and more on the Congressional choices. Surely we can find some people with a head to serve in Congress. These current buffoons would fall for a scam where someone said they won a million dollars in an African lottery and only need to send in $10K to collect it.
Congress will continue to screw America until we have term limits. Two terms for the Senate and four terms for the House or a combined maximum of 12 years.
From a Guns & Butter economy, to a Buns in Gutter economy?
Butter my bun and call me a biscuit!
will this be a good thing now because nobody can lie on loan apps?
will this help get rid of fraud?
will house prices continue to slide because nobody wants to open their books?
I am looking for a silver lining in the sludge.
I understand people will still have to qualify in terms of income…so that’s good. As long as lending standards stay tough, housing prices have to fall. And with the added tax burden of this mess, housing prices have to fall more. Therefore my cash stack is worth more. Q.E.D.
Just to lighten it up a bit here
I’m watching Ice Road Truckers. Fascinating show.
Fog is finally come back. I can see it draping it’s white cloak over the hills of the west Peninsula. I love mother nature’s air conditioner.
Ha! Me too. Had this show on the last 4 hours!
Just to lighten it up a bit here
I’m watching Ice Road Truckers. Fascinating show.
Fog has finally come back. I can see it draping it’s white cloak over the hills of the west Peninsula. I love mother nature’s air conditioner.
I like that show. I DVR it on sunday’s and watch it a bit later (usually after finishing homework).
My apologies for the double posting. I thought I had stopped the first posting from going through.
Is it too late to start a Poole on how large the GSE mop-up charge to U.S. taxpayers will be?
U.S. Losses on Fannie, Freddie May Be $300 Billion, Poole Says
By Christopher Swann and Pimm Fox
Sept. 7 (Bloomberg) — William Poole, former president of the Federal Reserve Bank of St. Louis, said taxpayers may face a $300 billion bill to revive Fannie Mae and Freddie Mac, the mortgage giants being taken over by the Federal government.
“I would not be surprised if their total losses aggregate about 5 percent of their obligations” of about $6 trillion, Poole said today in an interview on Bloomberg Radio. “Five percent does not seem to me to be an outrageous guess.”
I think they are way underestimating the costs to taxpayers.
Of course, these are the same people who first declared there was no housing bubble; and once the bubble became too obvious, they assured us it was all “contained.”
My guess for the Poole: $2 Trillion (with a capital “T”).
GSE rescue could scare bears
“I think the stock market is going to take this as a positive,” agreed William Larkin, fixed income portfolio manager at Cabot Money Management in Salem, Massachusetts.
“It’s going to hurt Treasuries because that flight to quality that was occurring will probably go the opposite direction.”
“The government is going to be basically pulling a lot of this stuff onto the U.S. government’s balance sheet and that may be a concern for the dollar, but it is going to be a positive for our financial system,” Larkin said.
The early reaction in equity derivatives markets dovetailed with that view. Standard & Poor’s 500 equity index futures surged late Sunday when they opened trading for the week, pointing to gains when Wall Street opens on Monday morning.
http://biz.yahoo.com/rb/080907/column_stocks_outlook.html?.v=3
well, some insight as to how the markets are reacting. is this going to help people make their mortgage payments? is this going to make people feel better about spending at the malls this christmas? i dont think so.
it also says in the article that inflation is taming so they think the fed will cut interest rates again! go figure?
Wall Street finally got what it’s been angling for: a bailout of Fannie Mae and Freddie Mac that could aid a recovery of the broken U.S. housing market and arrest a slide in stock and credit markets worldwide.
http://biz.yahoo.com/ap/080907/mortgage_giants_wall_street.html
i like this writter, she just throws the truth right out there in the beginning of the article.
Fannie, Freddie deal helps some borrowers, not all
http://biz.yahoo.com/ap/080907/mortgage_giants_consumer_impact.htm
“PUKE ALERT” lots of quotes from a ca-realtor in the article. they are pi$$ing all over themselves because of this bail-out. it makes me sick!
Monday morning when those who will bail out fre-fnm, etc know they are the chosen ones. They will hum a few bars of this:
“skating away, skating away
On the thin ice of a new day…”
Oh yeah, somehow watching “Ice Truckers” and thinking of this bailout brought that one to mind. Appropos?
Asian Stocks, U.S. Futures Rally on Fannie, Freddie Takeover
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHLoV7kk04Ks&refer=home
Sept. 8 (Bloomberg) — Asian stocks surged from the lowest in almost three years after the U.S. government took control of Fannie Mae and Freddie Mac, boosting confidence financial companies will weather the subprime mortgage crisis.
Futures on the U.S. Standard & Poor’s 500 Index jumped more than 2 percent. Korea’s Kookmin Bank and Commonwealth Bank of Australia both gained more than 4 percent. Samsung Electronics Co. led exporters higher with a 2.9 percent advance on speculation the bailout of the U.S.’s largest mortgage guarantors will help revive growth in the world’s biggest economy.
Party on taxpayer; the markets will be celebrating your kind bailout! Let’s go buy houses tomorrow!
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHLoV7kk04Ks&refer=home
http://biz.yahoo.com/ap/080907/mortgage_giants_wall_street.html
“This is an important step, but it has be part of an overall program to get buyers to come in and step into the housing market,” he said. “You’re going to need other elements, other packages, to get it going again.”
We need more housing bubbles! We need more irrational exuberance! We need more bailouts! Come on taxpayer, step up to the plate. This racket can’t continue without your help.
“Sept. 8 (Bloomberg) — Treasuries tumbled, causing the biggest increase in 10-year yields in two months, as the U.S. government takeover of Fannie Mae and Freddie Mac gave investors confidence to buy higher-yielding assets.
“U.S. debt has gotten crushed in Asia,” said Kenny Borowicz, bond-futures broker at MF Global Singapore Ltd., part of the world’s largest broker of exchange-traded futures and options contracts. ”
looks like its going to cost a little more to run the government now
The War on Savers is turning. As the availability of money tightens money is becoming more expensive, thus cash rules.
hoz,
Did this bailout just destroy the US dollar? I noticed the pound and the euro are heading up.
From NYTimes:
“But in a strong indication of Mr. Paulson’s long-term desire to wind down the companies’ portfolios, drastically shrink the role of both Fannie and Freddie and perhaps eliminate their unique status altogether, the plan calls for the companies to start reducing their investment portfolios by 10 percent a year, beginning in 2010.”
It’s interesting that 2010 is used here. I often thought housing prices wouldn’t stop falling nationally until at least 2010 and then stagnates for perhaps another 5 years until 2015. But it seems that after 2010 GSE’s won’t be around anymore doing its things which means all mortgages will be either staying on books of banks or sold without gov’t implicit backing. I don’t know about you, but if this happens then the US housing market will NEVER be the same again, as the GSE’s were created to facilitate home ownership and absence of them will make mortgages rates significantly higher than comparable Treasury rates.
Will I be able to buy two houses when this is all over?
Pimco’s Bill Gross on the Fan/Fred rescue: “We like it”
3:14 PM, September 7, 2008
Bill Gross, the bond market guru at investment giant Pimco in Newport Beach, told my colleague Peter G. Gosselin on Saturday that he wanted to “see the money” in a federal rescue plan for Fannie Mae and Freddie Mac.
So how does $200 billion sound? I asked Gross today.
“We like it,” he said. “We think it’s a positive step.”
GrossfotoGross has been agitating for months for a bigger federal role in bailing out the sinking housing market. He acknowledges his critics, who say he’s “talking his book”: Because Pimco is a huge investor in mortgage-backed bonds of Fannie and Freddie, the firm and its mutual funds stand to benefit now that the government is stepping in to assure that the companies stay solvent. Pimco also will be helped as the Treasury begins to buy mortgage-backed bonds in the open market.
But Gross has asserted that the feds needed to act for the greater good of the economy and the financial system, not just for the continued health of his Pimco Total Return bond fund, the world’s largest. The $130-billion-asset fund is up 3.5% this year, ranking it in the 96th percentile for performance among bond funds.
Anybody else see the PIMCO manager McCulley on CNBC with the most disgusting sh*t-eating grin on… make me puke. What a joke.