Another Gubment Bailout
This is from the Neal’s Nuze section, this shit pisses me off!
This is what happens when politicians lack the political will to do what is obviously right.
Fucken scam politicians eager to buy political “good will” by passing the buck to future generations by promoting a fake crisis and what makes it worse is that BOTH political parties are guilty of this massive pandering.
Sphere: Related ContentThis one could cost $25 billion, but what the hell. Actually … that’s a minimum estimate. Some analysts think the mortgage bail-out that Bush is oh-so-eagerly going to sign this week could cost $300 billion. The politicians who curry favor and buy votes with this money don’t have to worry about where the money comes from. They’re going to be long-gone when the bill comes due. They only have to worry about doing what they need to do to buy votes so they can enjoy the prestige and privileges of power until that time.
Who are these people who are going to be bailed out?
- People who knew they were buying more house than they could afford, and who thought that they would be bailed out by rising equity.
- People who got home loans in spite of bad credit ratings … loans spurred by media and government anguish over the unavailability of home loans to bad credit risks.
- People who bought the house, took out the loan, and moved on in knowing full well that they wouldn’t be able to make the payments when the interest rates went up. But what the hell .. they would just ride the cheap rates until then, and throw in the keys.
Yes .. I know that there were some bad actors in the mortgage business. There are bad actors in every business. Me, for instance. But I can remember a dozen or so years ago when almost every major newspaper in the country was running investigative reports on the evils of the mortgage business. These reports told us that these evil mortgage companies were not doing enough to bring the American dream of home ownership to poorer people. The nasty mortgage lenders were actually using criteria such as income, job stability, credit ratings, loan-to-value ratio and other anti-inclusive measurements to intentionally keep minorities, single women and other poor, poor pitiful victims out of the home market. So — before the feds stepped in and made them do it – the evil mortgage lenders started lending to people that should be renting. And here we are.
Remember … over 95% of the people in this country with home loans are making those payments each and every month. So what kind of crisis is this really? Can’t it be said we’re weeding out the chaff here?
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July 28th, 2008 at 3:22 pm
Neal is correct that $25b is the minimum. I’d be willing to bet you 750mm of Maker’s that the final price is 10x that. More likely it will be 20x.
But Neal simply does not understand the issue if he’s arguing that 95% of people paying their mortgages proves there’s no problem. Imagine you’re at a party and there’s a big punchbowl on the table. Then someone climbs up on the table and takes a big dump in it. Hey, 95% of the contents of the bowl are still punch, but no one’s going to be drinking it.
Mortgages are the same problem. The 5% of shit-lined mortgages have been rolled into big burrito of good ones, then leveraged 30+ times by banks all over the world. The problem is, no one knows where the shit is, because the inside of the burrito all looks like shit and there’s no way to tell.
Here’s the bottom line: the issue is NOT keeping people in their houses, that is a diversion, a distraction, meant to keep investors in these bonds, eating these burritos. If they don’t, then these pieces of crap will blow up the whole financial system like they did Bear Stearns, IndyMac, two more banks in Nevada over the weekend, and would have - actually still will - Freddie and Fannie. It’s not about Main Street and never was; it’s about Wall Street.
I don’t think they can hold it together, but it will be fun to watch either way.