The entire week has been a prelude to this morning’s speech by Fed chairman Ben Bernanke. But late last night we learned that President George Bush would upstage Bernanke by announcing a new policy just an hour after the release of Bernanke’s speech.
Rather than pretend we know what this all means, we’re just going to open this thread up to comments from our readers. You’re smarter than us anyway.
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Jeb Bush was just hired by Lehman and Lehman is up big! Nice job bro!
does anyone even care? its the friday before labor day
Odd timing to say the least….and done while Asian markets were still open. End of the month, baby. The casino is open and all losses are backstopped. What a joke.
Easing the taxes on a mortgage short sale? That is like saying, Ok your F$%^&*ed, but at least you don’t have to pay taxes.
Look at the money pissed away in IRAQ and other “turrorist” locations and it makes this bailout plan look like the biggest joke since the Katrina debacle.
Bush is trying to put a band-aid on a gaping wound. Time to fade this market and load up on bonds.
No Bail Out of lenders… changes to the tax code to encourage work outs and mortgage write downs… He is paving the way for loan cram downs.
The FHA stuff is purely cosmetic – it will only affect a couple of percent of those facing foreclosure, and only those with “good” credit.
It seems to me that Bush, Paulson and Bernanke are all on the same page. Keep the financial system functioning, let the markets punish those who took foolish risks, and politic around trying to help those “most vulnerable”. Forgetting the rant I’d like to write about personal responsibility, none of this seems so bad nor does it seem like enough to change the fundamentals. America sucked at the nipple of negative real interest rates for 3-4 years and built up some amazing asset bubbles financed with that debt. Now we’ll see if they can handle it in a rising rate environment with assets starting to fall.
good fun!..subsidize the market with taxpayer’s money!
good fun!..subsidize the market with taxpayer’s money!
I diasgree with the Bush bailout in principle. But it’s nothing more than political bones to placate those who care. The actual number of homeowners it will affect is miniscule. In other words, there will still be plenty of foreclosures and distressed sellers for us real estate vultures to feast on.
MORAL HAZARD!!!!! Oh the humanity!!!!!
You want the answer?
Ron Paul.
Ron Paul would be great in the long run, but in the short run it would be a one way ticket to a depression. That being said, lets pay for the baby boomer mishaps now so my children’s children don’t have to pay for it.
I heard on CNBC the FHA-secure mortgage program Bush spoke about will only affect about 80,000 households. I think that is pretty significant, given my estimate that only 500,000 marginal households will be affected by the subprime mess.
Maybe those helped by Bush’s plan should be required to take an economics lesson as part of the “assistance”.
My rent’s going up 10% this fall. Where’s mah phat gub’mint check? Gimmah!
maybe just a basic math lesson. Or, “a loan is something you must pay back.”
I highly doubt Ron Paul who’s knowledgeable of the Austrian School (Von Mises, Hayek) would do anything radical instantaneously to the MS to shock the economy into a depression.
Instead of giving them relief in the form of my tax money, how about they move in to some of those FINE trailers that were left over from the Katrina “rescue”? Or are those only good for poor black folks, but not quite up-to-snuff for real estate gamblers?
“My rent’s going up 10% this fall. Where’s mah phat gub’mint check? Gimmah!”
If you’re in any rent-controlled section of NYC, you already got yours. :^)
Bush is grate
wwrpd?
Who lives in rent controlled parts of NYC? Most of them are in areas that even if you were getting a ‘steal’ you’d probably have all your sh!t ‘stolen’.
I too support some of this ‘help’ to subprime borrowers, etc should be in the form of mandatory education (similar as to how welfare payments should gradually be converted into mandatory job training after a few years, but I digress).
Nothing too complicated here, just as duh@1:03 suggested, the basics like “a loan is something you must pay back…here are the components of a loan…this is how much $ you make, this is how much you’re going to have to pay the creditor each month…see? you can’t afford 3x your annual income to buy this house once the tease rate jumps up, now don’t be an idiot…”
@3:35–nice idea, but education is a canard here.
The people who got these loans were not all ignorant, just fell off the turnip truck types. They were greedy people who wanted instant gratification. Save until I can afford a 20% down payment? Live within my means? Read a damned contract?
But I want my home now now NOW! And now that Veruca has gone down the garbage chute, she’s whining that she didn’t know the rules.
So you take these people, put them in a class, make them take a test, and what good is it going to do? The same good that giving a globe to Miss Teen South Carolina will do.
“maybe just a basic math lesson. Or, “a loan is something you must pay back.”"
OR maybe 12 easy lessons in Real Estate Speculation, taught by Sam Zell.
Any bailout will not be of the ‘real estate gamblers’, it will be an investor bailout. Under Bush’s (and every other caring bailout plan), the holder of the mortgage loan will get an immediate gain by pocketing the amount set aside for both the bad principle and the past-due amounts. John Q taxpayer transfers that liability onto his balance sheet. And the borrower? His GAAP balance sheet will show him in the exact same place before the bailout, with the principle unchanged. And the poor responsible people trying to get a house without lying on an application? Well real estate remains out of reach due to uncle Sam ‘encouraging home ownership’ (read asset bubble) through negative interest rates, tax breaks for mortgages, government guarantees for borrowers, government guarantees for lenders, government guarantees for investors, etc.
Poor people should live in the box the big screen tv they bought with cheap credit came in.
Now is a good time to buy. Buy the most you can in the best neighborhood that you can. Your house will always go up in value and you’ll always make more money.
Yes. I am addicted to Oxycontin.