Thanksgiving

Well there may be some things to be thankful for this Thanksgiving Day.

1)That John (Juan) McCain is not President.

2) That Obama seems to be taking a more centrist position in setting up his administration.

3) That things may be improving in the housing market according to a story in today's Washington Post:

Would-be mortgage borrowers have rushed to refinance their loans and even weighed plans to buy homes following the government's move this week to loosen consumer lending.
With interest rates suddenly plummeting, "the phone is ringing, the e-mails keep coming," said Jennifer Du Plessis, a mortgage adviser at Prosperity Mortgage, the lending arm of Long & Foster. "Real estate agents are hovering outside our office saying: 'I've got another client who wants to refinance.' "

Now if we can only keep Congress and whatever administration from doing something stupid like buying up "toxic assets" aka sub prime loans with good taxpayer money we may actually be seeing light at the end of the tunnel in this economic downturn. This is certainly something to be thankful for.

Song for Citibank with the Paulson Subprime singers

From today's Washington Post:


"The Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. announced just before midnight Monday that they will protect Citigroup, one of the nation's largest banks, against potential losses on a $306 billion pool of troubled assets. "


How are we to account for this turn of events? The answer is in this video.

The TARP plan was always a turd

I guess the good news for us hard working middle class U.S. taxpayers who pay our bills and debts is that Henry Paulson and the Treasury Department are no longer going to be buying the sub prime crap loans under the Toxic Asset Reduction Program. Which in my book should have been called TURD loans because that is what they are. The idea of using our good tax dollars to buy crap loans from the banks who gave them out does not sit well with this and many other taxpayers. I think Hockeymike 374 speaks for many of us taxpayers:


"How can people be so stupid. Does anyone in congress understand that if you reward irresponsible behavior you will get more of it? I feel like an idiot for paying my bills and living within my means. I would say write your representatives but the last time we did that we were punished by making a 700B dollar bill an 850B dollar bill. This is beyond outrageous. The worst part is this will do nothing to solve the problem. NO more bailouts for corporations or the greedy and irresponsible people who bought homes they could never afford."

Sounds like good advice.

Congress and the bailout: Bad hand or bad idea?

I've got Nancy (the putz) Pelosi's words ringing in my head after she and the other sheep in Congress railroaded through the 900 billion dollar bailout pork bill. She said that the were dealt a "bad hand" like the members of Congress were at a casino. Yep, she and my Congressman Tim Bishop and Senators Clinton and Schumer were gambling alright. With our money! What was the result of their roll of the dice? Today's Washington Post has the money quotes:

"Last week, the nation's political leaders said the financial system would collapse unless they passed a $700 billion rescue package for Wall Street. On Monday, the first day of trading after the plan passed, the financial system continued to melt down anyway. "

The American people told congress that this was a bad idea they did not listen.

BAILOUT: The fix was in...

This BCP post from February is going into the I told you so file. All the hoopla about the administration officials coming up with this plan to buy up the toxic mortgages and bad sub prime debt and make us U.S. taxpayers pay for it is a bunch of B.S. The fix was in many months ago as I correctly predicted in February. It always seemed curious to me why the Bank of America would buy a failed mortgage broker like Countrywide with all it's bad sub prime debt. The answer is now clear Bank of America had a plan to unload that bad debt from the Countrywide purchase on us taxpayers from the begining. With the recently announced plan to have the government spend 700 billion dollars to purchase these subprime loans it looks like they succeeded. Here is exhibit A from my Post in February 2008:



"Bank of America, which is in the process of acquiring Countrywide Financial and has potentially huge exposure, has circulated a proposal to create a new federal agency that would buy vast quantities of delinquent mortgages at a deep discount and replace them with fixed-rate federally guaranteed loans."-New York Times 2/2008



That sounds very similar to what is being railroaded in in Washington this week. Just remember I told you so.

Socialism comes to Wisconsin Ave.

So much for the Republican idea of free markets. Now that the Bush administration is using our taxpayer dollars to bailout Fannie Mae and Freddie Mac and the mainstream media refuses to look any deeper than the headlines to find out how this happened. This has all the look of a problem that is attempting to be swept under the rug. Here are some of the money quotes:

"There is no guarantee that the takeover will work, and it comes at a potentially massive cost to taxpayers. The government has pledged to inject money in the companies in any quarter in which they would otherwise be insolvent -- up to $100 billion in total for each company. "

How nice! No guarantee that after spending up to 200 billion that this may not work. If somebody in congress proposed such legislation would Bush sign it?

"Paulson also announced a separate program in which the government will start buying securities backed by mortgages -- $5 billion worth, initially. That will, in effect, subsidize the purchase of homes by lowering the interest rate that buyers must pay for a mortgage."

Why do we taxpayers have to be the only ones to buy these mortgage backed securities? Paulson should have made all those banks and institutions who gave out the loans to unqualified home buyers and illegal immigrants and then bundled them into securities be required to buy these mortgage backed securities on a 50 50 basis. Why not they caused this problem in the first place they need to share the pain of the recovery not just us taxpayers.

What does this mean?

"President Bush and congressional leaders moved closer to agreeing on a compromise economic rescue package yesterday, fending off fresh protests from both the right and the left as they rushed to respond to a cascading series of economic troubles and to head off a potential recession." -Washington Post

I was boarding the Amtrak train at Union Station in Washington yesterday. When I looked up and saw a rainbow in the late afternoon sun. Is it just a coincidence that this rainbow appears after the Federal Reserve lowers the interest rates. Speaking of pots of money at the end of the rainbow. Here is another money quote:
" As markets roiled from a sharp sell-off around the world and the Federal Reserve cut interest rates at home, Bush met with House and Senate leaders to work out a package of tax breaks for consumers and businesses. In an important concession to Democrats, Treasury Secretary Henry M. Paulson Jr. signaled that he is open to including breaks even for those who pay little to no income taxes. "
I just hope that the Democrats and Bush mean that they will make sure that this money they want to give to people "who pay little of no income tax" will be Americans and not illegal immigrants who will send this money off to Mexico and other countries instead of it being spent here in the United States for our economy.

Sub prime suckers!

As the Washington Post reports today the other shoe is about to drop on the sub prime loan debacle and as I predicted it is going to fall on us taxpayers. In a cryptic speech yesterday Treasury Secretary Henry Paulson announced a "plan" to help bailout the sub prime loan borrowers and lenders. Details of which are supposed to be announce "later this week". Let's hope it is not in the dark of night here are some of the money quotes:

"Municipal housing authorities now offer mortgages at lower-than-average rates to credit-worthy, first-time buyers whose earnings are at or below the average household income levels, which vary by region. Cities and states can provide such advantageous loans because they sell tax-exempt bonds backing the mortgages to investors at lower rates, passing on the savings to homeowners. "

Translation: The loan risk will be slid off the banks portfolio and onto the taxpayers, Hola suckers taxpayers!

"The lack of details has made it hard to know how many homeowners the plan would help. In the past two years, about 2 million credit-challenged, or sub prime borrowers bought houses with mortgages that typically had interest rates of 7 to 8 percent. "

Credit challenged? What type of politically correct nonsense is this? The banks and lenders gave these loans out to these people. They are the ones responsible but, there is a slight of hand going on here and these "credit challenged" homeowners are about to become the problem of us taxpayers and not the lenders and banks who gave them the loans.

"Paulson's plan also faces a daunting task of figuring out who is eligible for mortgage relief, because many loans have little documentation of a homeowners income, said Douglas W. Elmendorf, a senior fellow at the Brookings Institution"

You can just smell the lawsuits beginning from those who don't get relief. I'm not even going to go into the number of illegal immigrants who have gotten sub prime loans which is the eight hundred pound gorilla in the room that no one wants to talk about.

" Whatever plan Paulson presents, "they are going to need the nonprofit community," said Kenneth D. Wade, chief executive of NeighborWorks America, who spoke at the housing forum yesterday. "

Oh yeah this is a good one. Let the "non profits" run the show. You can see the corruption beginning. The banks will be off the hook and by the time anyone realizes how much money was ripped off from the taxpayers who are subsidizing this bailout it will be too late. Get ready to open your wallets sucker taxpayers!