Senate Housing Bill Getting Closer
Submitted by
CalculatedRisk on Thu, 07/10/2008 - 9:38am (164 comments)
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The more they try to do the worse this will get.
What 'obstacles'...ahh, just make a even trillion and call it day.
Dow up 100, nothing to worry about. Move along.
A LIE, NO MATTER HOW MANY TIMES IT IS REPEATED, IS STILL A LIE.
There is no government guarantee on GSE paper. Pick one up and read it yourself. It has giant bold print that explicitly disclaims any government guarantee whatsoever.
You cannot have an "implicit guarantee" when you have an explicit denial of guarantee.
Anybody telling you there is an implicit guarantee is a liar.
When does this congressional committee crap end so we can get back to our regularly scheduled crash?
Seriously, when is it over?
Good old jim.
YouTube - The Dollar is Doomed and the Fed's Days are Numbered
It makes me feel good to know that I have been paying my taxes while renting my house, refusing to buy a house that I could live in but not afford, and that those monies will be put to good simultaneously bailing out the irresponsible and keeping homes unaffordable for me and my family.
Thank you pinhead politicians! Thank you! You'll be re-elected just in time to deal with this god-awful mess you just made worse.
Can we beg Tanta for an analysis of this bill? I can't get the straight scoop on whether the bill will do nothing or end the world as we know it.
That's a veto-proof margin, but they've still got to send this back to the House to sort out offsets for the tax breaks.
If this gets ping-ponged any longer, the new GSE regulator might just turn into a bankruptcy truste....
This bill may be a boondoggle, but I don't understand why the White House keeps threatening to veto something so popular - even if it is misguided. They're just threatening to step out in front of the freight train. Either they veto it and get over-ridden, and look impotent and heartless (for wanting to throw Americans out of their homes! Gasp!), or they flip-flop, don't veto, and look impotent and wishy-washy.
Are they trying to hasten lame duck status?!
"the Senate cleared away the last procedural hurdle hindering the measure"
Oh, they eliminated all common sense. Good.
So what say ye, 2:00, pop or drop?
OT, or not: Interesting stuff from Dean Baker and pals at the CEPR on loss of housing wealth and its effect on retirees:
Housing Market Meltdown Will Cause Massive Losses in Household Wealth - CEPR
"As Senators McCain and Obama fine-tune their plans for Social Security in preparation for the 2008 presidential election, a new report from the Center for Economic and Policy Research (CEPR) shows that, due to the collapse of the housing bubble, the vast majority of Americans have accumulated little or no wealth. This means that they will be almost completely reliant on Social Security and Medicare to support them in their retirement years."
and...
"The report projects that if house prices stay the same through 2009, the median household headed by a person between the ages of 45 and 54, those in their prime earning years, will have 24.7 percent less wealth than did the median household in this age group in 2004. These households will have accumulated just $113,268 in net worth in 2009, barely $15,000 more than their counterparts in 1989, whose net worth totaled $97,600.
If real house prices fall 10 percent, the median household in the 45 to 54 cohort will see a 34.6 percent loss in wealth compared with the median in 2004 while families in the 18 to 34 cohort will lose of 67.6 percent. If prices fall by 20 percent, the most pessimistic scenario, families in the 55-64 cohort will experience a loss of 49.6 percent of their wealth compared to the same cohort in 2004."
We all kinda knew this, but seeing it spelled out is interesting. This dynamic may well steer public policy for years to come.
c
Judging by the sheer size of that pop they've already fired all their ammo. I say Pluuuuunnnnngggggggeeee!
Samuel said: "A LIE, NO MATTER HOW MANY TIMES IT IS REPEATED, IS STILL A LIE."
But does that diminish the lie's effectiveness?
JMO, but this is why the bears can both be so right (on the facts) and yet so wrong (on the outcome).
S.
Boo Dodd and Friends Of Angelo -- Conflict Of Interest & Total Corruption....BOO!!! Remove the crooks!!
$300 billion does nothing. NADA. Next stop, a decade of ZIRP.
OT: Pimco continues to trade with Lehman Brothers Holdings Inc, a Pimco spokesman said on Thursday, amid rumors that the world's biggest bond fund was scaling back business with the investment bank.
A Lehman spokesman declined to comment, citing a policy against commenting on rumors and speculation.
JMO, but this is why the bears can both be so right (on the facts) and yet so wrong (on the outcome).
S., I tend not to be nearly as pesimistic as the...ah...clownier members of this forum. That said, I wouldn't exactly say the more reasonable denizens have been wrong. That "Oh my God" Faber let out was an involuntary response to looking at that very concrete chart.
feds claim they are trying to prevent a systemic event in the economy by bailing out this multi-trillion mess.
But a bailout means the dollar goes straight into the crapper and resulting inflation becomes a systemic event.
I.e. you can only avoid one systemic failure by substituting it by a worse systemic failure.
The bill still has hurdles in the House, where it doesn't meet Democrat budget rules and where GOP opposition is stronger. It also still has a Bush veto threat.
For those watching Fannie and Freddie, the bill further undermines them with a new tax against their capital base.
Dodd Mortgage Bill Raids Billions More from Fannie Mae, Freddie Mac Capital Base | FreedomWorks
The Bush administration is already lame duck...the only thing they can accomplish is in areas where the President can act without need of Congressional approval...for example telling the Israelis to forget about bombing Iran recently. So at this point Bush really doesn't have to care about his popularity rating.
OT, most honorable CR:
SAC Capital, LEH, Pimco...not good!
The only purpose of the Senate bill is to prop up outrageous housing prices. But that's what got us into this mess. It's like curing an alcoholic with more liquor. Eventually, the guy is gonna die.
"OT, or not: Interesting stuff from Dean Baker and pals at the CEPR on loss of housing wealth and its effect on retirees:"
One step further OT, but no one should feel bad for the boomers as it should be well known and is documented thoroughly here that the boomers were irresponsible spenders during their peak earning years.
McKinsey & Company - Talkin’ ’bout my generation: The economic impact of aging U.S. Baby Boomers- June 2008
Better to have a lot of inflation than a little deflation, according to BS Bernanke. It's no fun driving a car with no accelerator.
Anyone watching the casino stocks getting hammered as gaming revenue is down? Symbols: MGM, LVS, WYNN
If prices fall by 20 percent, the most pessimistic scenario, families in the 55-64 cohort will experience a loss of 49.6 percent of their wealth compared to the same cohort in 2004.
this makes me sick because home prices, being based on land valuations, were never "wealth" in the first place.
Land value is nothing but the pricing of being able to exclude others from legal access to, and use of, your land. Not a real wealth-producing form of capital, outside of productive farmland.
"Income properties" like apartment blocks don't actually create wealth, they just serve to redistribute it from renter to landlord.
The bill is also increasingly and remarkably unpopular. From Rasmussen"
Only 21% Support Federal Help for Those Facing Foreclosure Thursday, July 10, 2008
As the Senate inches toward passage of a $300 billion bill to help homeowners facing foreclosure, a new Rasmussen Reports national survey shows that only 21% of voters think the federal government should provide such assistance.
Slightly more than half (51%) say the government should not help these troubled homeowners and 27% are undecided.
Forty-six percent (46%) blame the ongoing home foreclosure crisis on individuals who borrowed more than they could afford, while 42% say Wall Street investors and mortgage companies caused the problems.
The bill expands the FHA's refinancing program for homeowners facing foreclosure by $300 billion and calls for an overhaul of the government-backed mortgage companies Fannie Mae and Freddie Mac. The bill also allows troubled lenders like Countrywide to transfer their distressed loans to the federal government, funds a program for cities to buy foreclosed properties and increases federal support for consumer credit counseling programs.
The bill is very attractive to legislators in an election year, but the nonpartisan Congressional Budget Office found it would do little to ease the housing crisis.
Only 21% Support Federal Help for Those Facing Foreclosure - Rasmussen Reports™
It looks like Fannie and Freddie are headed for that big balance sheet in the sky, and the housing bill doesn't take their bankruptcy into account. In fact, it appears that the yet to be approved housing bill is already hopelessly behind the facts on the ground...
OT but may be of interest:
Toyota Hybrid Engineer's Death Pinned On Overwork..."Japanese authorities have ruled that the death of a 45-year-old top engineer on Toyota's Hybrid Camry line was caused by working too many hours...In Japan, unpaid overtime is apparently common, and Toyota "is often praised for the efficiency and flexibility of its workforce," to quote The Economist again"...
So it's no wonder that Toyota is giving Detroit the beat-down...its employees do the exact opposite of the UAW folks...work tons of unpaid overtime, nights and weekends.
Question:
If the bill passes and the cities get the money to buy the foreclosed houses..what does the city end up doing with the houses it buys?
Bob Dobbs, interesting and scary stuff.
I'm hoping CR will do a post someday on the effect of this bust on income inequality. And in turn what effect growing income inequality will have on the housing market.
was caused by working too many hours.
they actually have a word for that, karoshi, added-labor-death
"So what do folks see in the crystal ball for GE's earnings tomorrow?"
Beating expectations.
DOW falling again. Can't it make up its mind?
Thanks God for all those Big Government, "Privatize Profits, Socialize Risk" Republicans in the House. They'll stop this bailout bill cold!
BWAAAAHAHAHAHAHAHAHAHA!!!!
Fannie, Freddie Tumble on Bailout Concern, UBS Cut (Update3) - Bloomberg.com
Senator John McCain, the presumptive Republican presidential nominee, said the federal government can't allow them to fail.
Fannie Mae and Freddie Mac are vital to Americans' ability to own their own homes</b>,'' McCain said in response to a reporter's question during a campaign stop at a diner in Livonia, Michigan.They will not fail; we cannot allow them to fail.''
Why is GE going to beat expectations? To me, indications that it is trying to sell pieces of its core business is decidedly bearish.
Only positive sign is CEO buying $3M of stock in May. Ambac's CEO bought stock all the way down. That's their duty...
Troy...yep, that was mentioned in the linked article.
Begs the question which is better: work like a galley slave and die with all your savings in the bank, or spend like a drunken sailor and die because you can't afford overpriced medical care? Apparently people in other countries have value systems different than America's...who knew:)
OT - Do we still need to say OT?
I'm noticing hourly bearish flags everywhere - DIA, SPY, QQQQ, XLF, IWM, etc.
On the SPY, for example, a break would project down another $2.50 or almost 25 SPX points. No idea when it will break (tomorrow probably).
Sebastian, "JMO, but this is why the bears can both be so right (on the facts) and yet so wrong (on the outcome)"
So, have you framed your outcome (NEW share certificates) and featured them in the "Sebastian's Hall of Shrewd Investents Fame", in your basement so your family can admire them ?
Policy-makers said on Thursday they were doing everything possible to restore calm to financial markets,
U.S. needs financial regulatory overhaul: officials
| Reuters
No! What they are doing is making things worse buy not telling these companies to get this crap on their books, mark it to market if there is one if not it's a zero, let stocks fall, let housing prices fall to affordable levels, raise the damn interest rates to get the dollar off the floor and put the commodity bubble to bed. Assholes. The market will eventually do it for them but the damage will be much worse.
It's not the final bill. The 84-12 vote was only a cloture motion.
The Nays were:
Barrasso (R-WY)
Bond (R-MO)
Bunning (R-KY)
Coburn (R-OK)
Cornyn (R-TX)
Crapo (R-ID)
DeMint (R-SC)
Ensign (R-NV)
Enzi (R-WY)
Inhofe (R-OK)
Kyl (R-AZ)
Vitter (R-LA)
And Not Voting:
Clinton (D-NY)
Kennedy (D-MA)
McCain (R-AZ)
Obama (D-IL)
Not a single Democrat voted No.
Are they trying to hasten lame duck status?!
Margin Call of Cthulhu
obviously they aim to be eaten first.
Rhetorical Q: why do they always claim that these plans will help 100s of 1000s when in practice it's 10s of 1000s,
look who is NOT voting!
My MGM Puts just went through the roof.... Is there some big earnings news on Casinos, or just speculation?
I could easily see MGM losing half its value with its poor construction timing. What were they thinking?
So what are Sebastian's predictions for the ecomony 6 months from now. Just to have them firmly in black and white so we can say whether he was right or wrong?
"Why is GE going to beat expectations?"
You're kidding, right? Everybody's doing it.
If these guys can't beat the low expectations I predict a minimum 10% drop in the stock price tomorrow.
People gambled on their houses and lost..no wonder Las Vegas is going off a cliff..no money to gamble with
Samuel writes:
A LIE, NO MATTER HOW MANY TIMES IT IS REPEATED, IS STILL A LIE.
...
You cannot have an "implicit guarantee" when you have an explicit denial of guarantee.
An excellent point. But as we know from experience, a bailout doesn't require an explicit guarantee!
JMO, but this is why the bears can both be so right (on the facts) and yet so wrong (on the outcome).
I just don't see this ending any better than the Japanese tailspin of 1990-2003.
I don't see a depression ahead -- it is true that on the whole this nation is immensely wealthier now than the 1930s -- just a long, painful decline from the credit-fueled boomtimes of 2003-2006.
The bill from that extended party has now arrived, and the national credit card only has about 10% of its authorized limit left to charge.
Is there any tax credit for homebuilders on this bill ?
Link to Marketwatch story.
News from Vegas only getting worse
Precipitous drop in gambling revenue guts casino stocks
DOW seems to be giving up its gains for the day
"I just don't see this ending any better than the Japanese tailspin of 1990-2003"
You meant: 1990-present
JMO, but this is why the bears can both be so right (on the facts) and yet so wrong (on the outcome).
Somebody woke up to the fact that TPTB are fudging numbers?
be still my heart
PPT break for lunch, or something?
"Gavshire Hathaway writes:
Only positive sign is CEO buying $3M of stock in May. Ambac's CEO bought stock all the way down. That's their duty..."
I agree. Now it's about sorting out whether Immelt is up a few notches on the CEO intelligence bell curve. I would say GE has a lot more earnings power, assets and probably a stronger balance sheet. Of course I could be way off base.
Disclosure - I bet on GE early this week.
PPT pumped and everyone else dumped
450 point move -- Watch 11,100
OT: FED and DSL under pressure, but CORS has been stubborn the last few days. Any ideas? Management trying to prop things up w/ buybacks?
Trying again with the Markewatch, Vegas story link. Now embedded as a tinyurl.
http://tinyurl.com/5mc2lk
Check out Oil!
Up over $5!
What a plunge in the DOW! Seems sinister to me.
@Beemer
GE is a finance company traded under the guise of a conglomerate. They have significant exposure to consumers, and I expect to see significant losses in their consumer credit portfolio. Reggie Middleton did a very nice piece on them recently. You might be correct about the upside surprise, but I'm not so sure.
Besides, which positive earnings surprise are you referring to? Only significant one so far was Alcoa, and I was expecting them to perform well.
pump dump and buy oil
Thanks mr beach - LV is in deeeep trouble
DOW seems to be giving up its gains for the day
My SRS stop came within a gnat's nuthair of being activated, which would have sucked since its taken a 5% upward move since then.
Man, setting stops is an art. You've got to eat as much pain setting the stop as you can stomach, so as to not to get cleared out by all the stops failing above you when the short-squeeze comes.
was down $1000 today at one point, now up $2. LOL.
you have a strong stomach Troy
Just talked to the PPT crew...they are on a lunch break...they will return shortly.
Troy, a priofit is a profit. Don't spend it all in one place.
day's not over yet. Prolly will get stopped out eventually. This market is moving.
I think the PPT is dumping all the crap they have been buying
The McCain comments on the GSEs are very disappointing. As though Americans were never able to own homes before the GSEs were created.
wawawa, there's no loss carryback for homebuilders in the bill (that was the most controversial provision in the first stimulus that was dropped), but there is a $8000 tax credit for first time homebuyers that's a NAHB proriority.
If folks want a more detailed look that's still understandable, here's the bill summary: http://rpc.senate.gov/public/_files/L62HR3221Houseamendments0618SN.pdf
CNBC just announced crude oil jumped $50 a barrel. Must be a typo, should only be $5. Let's hope.
Gav,
Point well taken but I think they, like everybody else, will continue to play beat the number. It's all they got.
Are you short or have any PUTs on it?
"If the bill passes and the cities get the money to buy the foreclosed houses..what does the city end up doing with the houses it buys?"
Taos,
Here in Minneapolis there was a 'tour' a few months ago where the mayor and Housing Authority people went through a number of foreclosed properties. The Housing Authority estimated at that time that one-third of the foreclosures in Minneapois should be immediate tear-downs.
Do they have funding to tear down? Of curse not... and they face a declining property value tax base.
I don't understand why Kennedy didn't vote. There's no rule that says you can't vote in the Senate with a flat line brain scan. Every vote counts!
Ready for the big save next week?
I think we have a big rally to bring bakc fannie and freddie after they get their candy in the housing bill.
I think the owners of fannie and freddie (banks and mut funds) are using this drop dead talk to prepare to squeeze the shorts after they get a heap load of sugar from Uncle.
Cynical, and most likely true.
They are absolutely TBTF.
I don't care what BB and HP say.
Someday this war's gonna end...
Troy,
Didn't you mean the US credit fueled boom times of 1997-2007?
Nah, I'm not playing GE. I just have massive Puts on financials, so if they beat I'll get whacked pretty hard. But if they miss I'll shoot sky high.
Major risk, but I don't think I'm going to trim.
Beemer,
Just like the upper downtrend line of most indexes weren't broken during Tuesday's scorch, oil's lower uptrend line wasn't violated this week. So much for this week being a reversal.
Oh, and Barry Ritholtz sucks.
"Not a single Democrat voted No.
El Cliffo | 07.10.08 - 2:25 pm | # "
Sigh. I'm a Democrat, and I would've. But I don't believe in looting the system to gain a little more cred through Election Day. Some politician I would have made.
I think that in the long run, Las Vegas rather than CA or FL will be seen as the epicenter of the current cycle. Given the growth in the city's core industry of gambling, which is obviously discretionary personal spending, plus massive bets by casino builders on continuing high rates of growth in gambling, plus the real estate investment(gamble) boom; all of which helped propel construction and commodity costs up; add up to one enormous unsustainable blowout which is now in the midst of a process of vaporization in a massive firestorm of wealth destruction.
Wally
I just wondered..here in Taos there are a lot of locals who can't afford a house..maybe the money would help us to buy something..but probably not.
1997-2001 seemed rather productive to me, but then again software is my field.
Troy I was in high tech from 1997-2001..then after 9/11 it seemed to go bust for awhile
The "Hindenburg Omen"
Gauging A Spooky Market Crash Omen - CNBC
LEH down 17%... hmm.
some of you people should stick to what you do best
there is no epicenter, it's systemic
were you not listening today? the set up is what this was, whenever some one of those solons tried to get all substantive and/or challenging Franks cut them off
we are freaking doomed (no hat tip)
massive firestorm of wealth destruction
wealth destruction is that half-finished development out in bakersfield rotting away.
Overpaying for an asset is wealth-transfer. We saw plenty of that all across the country 2004-2006, thanks to the new "affordability" loan products that were anything but.
CNBC: Schumer says too important to go under. Congress will act if needed.
Kung Fu -- What's your take on MGM and WYNN? I expect their recent projects to absolutely crater. A $9.2 Billion dollar CityCenter??? Dear god...
RUMOR LEH
not Pimco
Fido???
Wow, if you've got $175,000 to blow on a rec room for your kids, you've got too much effing money.
Rooms to Stop the Young From Straying
Of course, these parents probably DON'T really have $175,000 to blow on a rec room for their kids...
1997-2001 was profitable for tech, but obviously not very productive. That was the start of the loose money bubble. Not apres 9-11.
look who is NOT voting!
Yep. Obama didn't have the balls to vote on the Homegrown Terrorism Prevention (aka, anti-freedom) Act either.
Sebastian's role as a stock picker
, social critic, market prognosticator, and psychologist are atrocious.
Gold is trying to break its $945 resistance. But not doing a very good job of it.
@I don't understand why Kennedy didn't vote. There's no rule that says you can't vote in the Senate with a flat line brain scan. Every vote counts!
Did you see he showed up and voted on health care? Still kickin. He's goddam pickled.
by NOT voting doesn't Obama set himself up for some negative ads in the fall?
just wait till BZH goes bankrupt. Fortunately for sebASStion it won't dent his bullet-proof housing value. North Carolina prices can never go down!!!!
Russell 2000 getting cheappppper sebASStion. Wright Model B commands you to buy!!!
I could easily see MGM losing half its value with its poor construction timing. What were they thinking?
MGM probably had money being thrown at them to do anything when times were good. Afterall, the cash flow of Vegas two years ago was outstanding.
Rumor: 2nd time today
LEH will not survive thru the weekend
Wow. the DOW is taking a real plunge now. Down 32
Vegas will become a theme park for future generations to visit
Ozymandias writes:
Gold is trying to break its $945 resistance. But not doing a very good job of it.
I hear ya.
I've got to say it:
SHORT BUCKY!
This thing's gonna blow!
LEH rumors all over the net....
1997-2001 was profitable for tech, but obviously not very productive
waddya mean? It produced haloscan!
This here bear market is more of a rattlesnake market...only without the warning rattle lol
Say..did Hank Greenberg really buy LEH? it's down 19% now.
snake rattle and roll
Ok Gav. I'm in on some August PUTs on GE. Go Dawg Go!
Ozymandias writes:Wow. the DOW is taking a real plunge now. Down 32
Huh. It wasn't down 30 minutes ago. Hoocoodanode HaloScan.com - Comments
LEh down below $16....
ow Beemer's got a strong stomach
Metals are doing just fine and so are the mines, made a few $ on swings on PAL, SWC today
24-hour Spot Chart - Gold
when BSC went down, did'nt that super cutie analyst say LEH did'nt have the same problem, and she defended it?
Good, while the Govt seeks more giveaways it should clear a path for me
to sell thousands of options I can't
afford to cover if exercised. I'll just
declare insolvency and let the good ol'
public foot the bill.
CNBC says Fannie and Freddie marks a bottom?
Fannie and Freddie: Beginning of a Stock Market Bottom? - CNBC
Looks like the SPY just broke that bearish flag.
The Dow is getting awfully close to that 10999 mark. When will it get there?
there goes s&p 1240.
Don't buy based on my gut. I'm frequently wrong on earnings calls. However I'm usually right on long term trends....
Looks like the SPY just broke that bearish flag.
yep -- going to be a very interesting close. a rally would help!
Gavshire Hathaway writes:
Don't buy based on my gut. I'm frequently wrong on earnings calls. However I'm usually right on long term trends....
Gavshire Hathaway | 07.10.08 - 2:59 pm | #
what is the long term trend?
PAIN
I've said for weeks now, the Intermediate Trend is down until either SPX 1175 or SPX 1080. Then you should get a bounce (put on the fibs to project the bounce, but some bounce will occur).
GE has much more financial exposure than is currently priced in. Long term trend is down.
I do think there are other companies that are much safer to short, however.
C, GS, MER, and MS for example.
3011
this bottom calling tablist biz is a full time job
Puts And Insurance Now = PAIN
Ya, Puts just got really frickin expensive.
supply and demand = PUTS through the roof
SPX 1175 or SPX 1080
SPX could really suck if oil backs off a bit driving that sector (~10% of the S&P 500 IIRC) down, but not enough to materially benefit the rest of the economy.
wealth destruction is that half-finished development out in bakersfield rotting away.
Overpaying for an asset is wealth-transfer. We saw plenty of that all across the country 2004-2006, thanks to the new "affordability" loan products that were anything but.
Overpaying for assets also destroys wealth, just in ways that aren't so easily recorded. If somebody thinks they're very rich, go out and buy a Cadillac, then discover that they've overborrowed and have to sell it and drive some clunker, they are much worse off overall than if they'd bought a Chevy Malibu and hung on to it. Wealth has been destroyed; quite a bit for the many who will end up essentially destitute; but you can't measure the effect.
Angry Renter said:
The bill still has hurdles in the House, where it doesn't meet Democrat budget rules and where GOP opposition is stronger. It also still has a Bush veto threat.
The House will find money somewhere. As for GOP opposition, many Rs in struggling areas will be hard-pressed to vote against a bill that the Democrats can say was designed to save the housing market and revitalize the economy. Republicans are running scared before the election, and the last thing they want to do is give the Dem candidates running against them a vote against "saving struggling homeowners."
It might have been easier for them to vote against this when it was in a big omnibus last year, but this close to an election, Republicans run an enormous risk voting against the bailout.
The interesting question is whether enough Republicans in the House will be terrified into overriding the veto. How many want to go home to "You sent Rep. X to DC and he voted to throw grandmothers out of their houses" propaganda?
I suspect that fear will pass this bill, just like it passed the warrantless surveillance bill.
What are the rumors about Lehman? These things are usually true.... Anybody have an ear to the street?
I'm playing a small $ amount with house money. We can critique the trade tomorrow.
Gavshire - three rumors running wild at the moment.
1 - pimco reducing exposure
2 - sac reducing exposure
3 - talks of a buyout
they are rumors. not true. don't listen to them! this is a strong buying opportunity in a great company
New thread above.
Beemer writes:
I'm playing a small $ amount with house money. We can critique the trade tomorrow.
Beemer | 07.10.08 - 3:07 pm | #
good luck..hope you don't need to shell out $ for Malox
dk -- thanks!
Assume you're being sarcastic about the last sentence?
Wealth has been destroyed
nope, the Cadillac dealer is a happy camper.
But yeah, I see your point that the human feeling of wealth is asset based, so the Cadillac dealer's gain in wealth-feeling is overshadowed by the borrower's continuing wealth-deficit having lost the car, not to mention the end bag-holder of the loan who is the ultimate loser in this process.
One thing I'm still trying to understand is what happens to loan defaults were the loaned money came from fractional reserve lending. Did the lender borrow that money from the Fed, or what?
Mal:
$175K for a basement? I'm trying to get mine done, with full bath, for less than $20K.
Yeeesh.
"house money"? Isnt that what got us in this predictament anywho?
Gavshire, if you have any further questions about rumors, just ask Charlie Gasparino.
The only way we're ever going to get affordable housing at this rate is when we're all broke and we're back to bartering for goods... or something.
Unreal... They just keep finding ways to make the situation worse in an effort loot the system a bit more!
"Did the lender borrow that money from the Fed, or what?"
It depends... there's bagholders all the way down and the ultimate one might be the Fed, or a foreign government or a pension fund.
Looks like we should finish positive.
What's 5 buck volatility for oil... tomorrow it may go down as much.
How will this bill prop up housing prices?
^ I was talking about fractional reserve lending. If you borrow money via an ABS or whatever to lend out, that's not fractional reserve.
merlin writes:
How will this bill prop up housing prices?
It won't, will just stop everyone going broke at the same time.
Hmm... subprime mess (lower class) getting worked through. Now that the folks that may have actually had money (middle+ class) and took out the Option ARMs on the fancy homes are in trouble, we go for the bailout. Dammit. I was waiting for the homes associated with the next wave
whipsaw...
entry points have no conviction. stand clear
Anonymouse writes:
Huh. It wasn't down 30 minutes ago. Hoocoodanode http://www.haloscan.com/comments...? a=15971#512959
Looks like it was a rally instead today.
"How will this bill prop up housing prices?
It won't, will just stop everyone going broke at the same time."
I disagree. Once the government is the ONLY lender, they can make housing prices whatever they wish.
Oh, sure - it'll lead to hyperinflation and total currency collapse in a few years, but that's a few more years of unaffordable housing and economic misery for us and skimming off the top for the kleptocrats. Then, after the collapse, they'll end up destroying everyone's savings, too, which is also nice for sociopaths who just can't stand the thought of anyone aside from themselves not being destitute.
Ozymandias said: "So what are Sebastian's predictions for the ecomony 6 months from now. Just to have them firmly in black and white so we can say whether he was right or wrong?"
The same as they've always been.
No recession last year, this year or next year, not even a near-miss. If you'd like me to put numbers to this year's real year-over-year GDP, I'd estimate +2% to +2.5%.
I went through a similar exercise last year in forecasting "no recession", and suggested that anyone who was interested bookmark the post for later comparison. Nobody ever seems to dredge up that post.
Sebastia
Seb,
Don't get all pouty now, I distinctly recall someone giving you kudos on the "no recession" call in a post...
George C.
You're right that the Mortgage Rescue bill has already been overtaken by events, but Congress just doesn't want to face up to the Fannie & Freddie mess right now.
In fact, the mortgage bill leans on F&F to do more when they're already overextended. I'm hoping that the collapse in F&F stock prices might get Bush and Congress to notice that the problem is much greater than sub-prime mortgages.
By the way, FHA is also in desperate shape, but has not received as much attention because they have no stock. FHA has an EXPLICIT Federal guarantee.
someone should tell congress forestalling foreclosures, or even preventing them will only delay the correction
"During times of universal deceit, telling the truth becomes a revolutionary act." - George Orwell
Republicans are braindead if they think that going for a housing bailout will garner them votes.
I talk to people about this all the time.
NOBODY supports this. In fact, people, once they are aware of what the politicians are up to, are pissed, really really pissed. And that includes both renters AND homeowners.
Ask people how they feel about using 300 billion of their taxes to bail out the lenders and people who overbought . You will be amazed at the anger out there over this.
Again, the Republicans are missing the boat here. They actually had a chance of winning if they had stuck to the "no bailout" line.
Anonymous 6:13
Barney Frank has said on numerous occassions : "We are not trying to stop the correction, we are trying to slow down the correction!!!"
He always says it in a panicked voice.
Every single person who over-extended to buy an overpriced home in the past year can thank Barney Frank and his ilk for "slowing down the correction".