Seize the ????

"The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document." - Washington Post

File this under what the F?

A TAXPAYERS'S CRAP SANDWICH

Tim Geithner is expected to announce today the Obama administration's Taxpayer's crap sandwich where we will taxpayers be buying up the "bad assets" aka failed sub prime loans that the banks gave out because of their greed and activist's groups like ACORN pushed because of their social agenda. Of course President Obama did not mention the latter part of the problem on his 60 minutes appearance last night.

Obama Foreclosure Follies II

While President Obama is sensitive to being asked if he is a "socialist" he still continues to push to spend 87 billion taxpayer dollars to stop foreclosures which also provides money for his "activist" friends in groups like ACORN. Elsewhere market forces are working to decrease the amount of foreclosed houses without using tax payer dollars. Exhibit A:

It seems the Obama Administration is more concerned with throwing more taxpayer money at the foreclosure problem even when market forces are working to correct it without costing us taxpayers more money.

OBAMA'S FORECLOSURE FOLLIES! OUR TAX DOLLARS!

Hello fellow sucker taxpayers! Remember Stanley Johnson?



Well President Obama is going to help him and millions of others using about 75 billion of our taxpayer dollars to bailout the lenders and borrowers who made and got loans that should have never been made in the first place. And guess who is going to help pay for this foreclosure bailout plan. Yes you and me the responsible tax payers!

Here is what President Obama said:
" We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford."

Oh yeah Mr. President? The Associated Press has Ben Bernanke telling us something completly different:

"AP, Feb. 25: Defending the program Tuesday at a Senate hearing, Federal Reserve Chairman Ben Bernanke said it's important to save those who made bad calls, for the greater good. He likened it to calling the fire department to put out a blaze caused by someone smoking in bed. "I think the smart way to deal with a situation like that is to put out the fire, save him from his own consequences of his own action but then, going forward, enact penalties and set tougher rules about smoking in bed."

No Mr. Bernanke the person who is smoking in bed deserves to get burned. You don't just toss the cigarette to us taxpayers who just happen to live next door and think everything will be fine.

Then there is this ends justify the means rational from Sheila Bair:

"I think it's just simply impractical to try to do a forensic analysis of each and every one of these delinquent loans," she told NPR.

Wait a minute! You don't think it's practical to look at these loans. Isn't that how the banks got into this mess in the first place? But, there's more to this idiotic logic.

And, Bair added, it's in the "collective economic interest" to not have more foreclosed homes on the market. "To try to punish all of those parties now by foreclosing on more homes, putting more families on the street, putting more houses onto the inventory, creating more downward pressure on home prices when you have so much inventory on the market right now. Is that in our collective economic interest to do that? I just don't think that it is."

That's the problem with people like this in the Obama administration they don't think! While foreclosure is certainly bad for the reckless borrowers and the banks who gave out the loans. Having us responsible taxpayers bail this bad behavior is not the answer. Let the foreclosures happen and then there will be opportunities for more responsible people to get into these homes. People like:

Lynn Powers, 39, a Bethesda, Md., resident who describes herself as a “liberal Democrat” who has been hardworking, prudent and responsible — and now feels “like a fool."“We were in the market,” she says. “We put out eight bids and got outbid every time. It was very upsetting for us. I want to see some accountability and responsibility across the board. The only way for me to have an affordable home, and I’m not looking for a McMansion at all, is if we let the chips fall, in a sense. This is still the bubble — the prices have to come down. You can’t just subsidize some of the people. I don’t know how you deleverage. It is going to be painful, but this is also hurting the people who behaved responsibly.”
What does she mean by “responsibly”?

“People who didn’t overbuy. Who stuck to their guns. Who read their contracts,” she says. She and her husband wound up buying a 600-square-foot studio and moved to a rental when they had their daughter, now 18 months old.

“My husband and I paid for our cars in cash,” she says. “We have no credit card debt. We have no student loans. I don’t buy Starbucks, but that’s because they’re non-fair trade, nonenvironmental.”

When they tried to buy a house, she said, “We just felt outgunned.” And now, she says, “I feel very outgunned as a citizen.”

And she should feel out gunned. Her government is subsidizing the people who out bid her on some of those houses. Now when she and her husband might be able to grab a foreclosed property at a reasonable price the Obama administration is rigging the market. This chart from a TIME magazine article shows what has been happening due to the foreclosures.

The chart shows home prices approaching a more normal average so that responsible people like Lynn Powers and her husband can get another shot at being a homeowner. But, Obama's plan is to stop the foreclosures and so keep house prices artificially high.

I think this woman from Maryland pretty much sums up the feeling of many of us responsible taxpayers to Obama's misguided plan:

“I am an Obama supporter, campaigned for him, baked cookies for him; my husband and I are Democrats all the way, but this is the issue that gets our goat.”
Echoing Santelli’s complaint, a Silver Spring, Md., mom who did not want her name used adds: “I’m not sure why we should work and pay for someone else to have a granite countertop or an extra bathroom.” When asked about people who hadn’t overreached but had lost their down-?payment money when the value of their homes had dropped, she replies, “We put money in a 401(k), and we lost that money, and no one is going to give it back.”-Politico

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.

Bank, bailouts, extortion and the Senate

Well Wall Street and the banks seem to be using extortion to try and get Congress to have U.S. taxpayers buy up their crap sub prime loans. In the Senate it looks like their lobbyists may have succeeded in getting dumbocrats like Chris Dodd to railroad this through. Meanwhile the banks are using extortion to make the situation worse. By tightening credit the are making the situation worse on purpose/ Nobody is actually asking the question that these banks can not keep up this extortion for long because they are in business to lend money. That's why they are trying to rush Congress to pass this bailout bill before people realize the game they are playing. If they get away with it it will be the biggest rip off the U.S. taxpayers.

BAILOUT: Hola suckers!

Nancy Pelosi said "The Party is over." but, for some the party has just begun. Nowhere in this trillion dollar bailout bill do I see that those sub prime homeowners who will be helped and bailout along with the banks have to prove that they are in this country illegally. Michelle Malkin

pulls back the curtain to show the 800 pound Gorilla sitting in the room where this bailout scam was negotiated here are the money quotes that will cost the American taxpayers:

It’s no coincidence that most of the areas hardest hit by the
foreclosure wave – Loudon County, Virginia, California’s Inland Empire,
Stockton, San Joaquin Valley, Las Vegas, and Phoenix, for starters — also happen
to be some of the nation’s largest illegal alien sanctuaries. Half of the
mortgages to Hispanics are subprime (the accursed species of loan to borrowers
with the shadiest credit histories.

I’ve reported on the rapidly expanding illegal alien home loan racket.
The top banks clamoring for their handouts as their profits plummet, led by
Wachovia and Bank of America, launched aggressive campaigns to woo illegal alien homebuyers. The quasi-governmental Wisconsin Housing and Economic Development Authority jumped in to guarantee home loans to illegal immigrants.

The Washington Post noted, almost as an afterthought in a 2005 report:
“Hispanics, the nation’s fastest-growing major ethnic or racial group, have been
courted aggressively by real estate agents, mortgage brokers and programs for
first-time buyers that offer help with closing costs. Ads proclaim: “Sin
verificacion de ingresos ! Sin verificacion de documento !” — which loosely translates as, ‘Income tax forms are not required, nor are immigration papers.’”

Yes, Nancy Pelosi had it right "The Party is over. But, for groups like La Raza and the illegal immigrants and banks who have these sub prime loans the party has just begun. Meanwhile we American taxpayers are the ones who will be left to clean up the mess thanks to this bailout bill. Hola suckers!

Wall Street is selling it's sh$t! Guess who is buying it?

From today's Washington Post:

Congressional leaders and the Bush administration this morning said they
had struck an accord to insert the government deeply into the nation's financial
markets, agreeing to spend up to $700 billion to relieve Wall Street of troubled
assets backed by faltering home mortgages.

Yes Wall Street is selling it's sh$t and we tax payers are buying it! Hello suckers!

Full details of the plan were not immediately available.

That's because the devil was busy looking at it and try to find a way to climb into it.

There was at least one good piece of news the Republicans seemed to have been able to get the Democrats to drop their demand that suspect "social services" groups like A.C.O.R.N don't get hold of any taxpayer money since their record of corruption and voter registration fraud is one of the under reported scandals in this whole mess. Here is the money quote:

They also agreed not to dedicate a portion of any profits from the bailout
program to an affordable housing fund that Republicans claimed would primarily
assist social service organizations that support the Democratic Party, the
official said

Only time will tell how badly we taxpayers are being screwed by this legislation and those who negotiated it want this passed before the opening bell of Wall Street. So it looks like our time is up!

Bailout Barney Frank to the rescue! Of who?

As the saying goes "Fools rush in where wise men never go" so it was the Democrats and Bush administration officals like Henry Paulson who tried to rush this Wall Street bailout plan cooked up by the banks themselves through Congress this week. Now comes this irritating comment from Bailout Barney Frank in today's Washington Post:

"I am convinced that by Sunday we will have an agreement people will understand." -Barney Frank

Oh we understand Congressman Frank. We understand we taxpayers are about to be screwed by a bailout orchestrated by the banks and financial institutions like Bank of America to save their butts because of the bad sub prime loans THEY made.

No Boo Hoos for WAMU!

As the Washington Post reports:

"Federal regulators last night seized the massive, troubled mortgage lender Washington Mutual in the largest bank failure in U.S. history,"

J.P. Morgan submitted the highest bid in an auction regulators held Wednesday night, buying Washington Mutual's 2,200 branches, its $135 billion in remaining deposits -- and its vast portfolio of troubled investments in mortgage-related securities.

My my how could this have happened? As Diggers Realm reported a while ago here is an example of the kind of sub prime mortgage that Washington Mutual gave out:

"Soledad Aviles, an immigrant from Mexico with a 6th grade education who can't read or write English and makes $9 an hour, was approved for a mortgage of $615, 000 by Washington Mutual. It should be noted off the bat that Washington Mutual is one of many banks that accept the Matricula Consular ID card as proof of identity and which is easily forgable."

"Referred to a local loan broker by a trusted friend, he borrowed the entire purchase price of $615,000 from Washington Mutual at a high interest rate typical of sub-prime loans. The monthly payment, as he says he understood it, would be $3,600 -- steep for a glass cutter who made $9 an hour"-

Gee, What could go wrong here? Meanwhile Congress and the mainstream media continues to ignore exactly who these banks like Washington Mutual were giving mortgages to and why we should not be surprised how things turned out and why these banks deserve to fail and not a penny of taxpayers money should be spent to save them.

Stupid money and the common sense of mainstreet.

The Washington Post had an article today that looked at the feelings of some people in suburban main street communities who like me are not in foreclosure, who lived with in their means and did not borrow more money than they could afford when they bought their homes. Here are the money quotes:



"Ed Merkle, 58, as he pointed to the "for sale" signs lining his street.
But Merkle, a defense contractor, said he has lived within his means in an era of easy credit. He didn't take on a huge loan even when his bank encouraged him to dream bigger.
"I've been financially responsible with my own money. Why should I now be responsible for the fact that you were not?" he said. "



""If I spent more money than I have, I don't deserve to have somebody bail me out," said John Owens,"



"This may be a Main Street bailout backlash in the making. The details of the financial crisis are still hard for most people to follow -- what with talk of exotic "derivatives" known as "credit-default swaps" and so on -- but the central fact of the matter hasn't been lost on anyone in this Northern Virginia community: The taxpayers are on the hook for the bad judgment of others. "



Backlash indeed! I say bring it on and take it to Washington and Wall Street.

I woke up this morning and...

I woke up this morning and found this note on my pillow.

Somehow I don't think this is good news.

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.

Bank of America profits down! Hola suckers!

"NEW YORK, April 21 -- Bank of America, which has a sprawling business in personal and commercial loans, reported a 77 percent decline in profit Monday, the latest indication of how financial troubles that started with sub prime mortgages have spread across the credit markets-Washington Post

I guess the great financial geniuses at The Bank of America who came up with the plan to give credit cards and sub prime mortgage loans to illegal immigrants may not have had such a great business idea after all. Perhaps BOA should change their name to Bank of Idiots. What's next? Forget turning to CNBC and the Wall Street Journal to find out. If you would have been listening to Bob you would have seen this train wreck coming a long time ago.

Money, Money, Money

Well the masters of the universe in the banking and financial industry who came up with these hair brained schemes like "sub prime loans" still do not understand that their universe is shrinking. Even as Feds try and make a silk purse out of a sows ear and the idiots of the finiancial industry still can not own up to their mistakes. Here are some of the money quotes:

"Taken in total, the effort seeks to cure three paramount failings behind the credit meltdown: Financial firms at each step of the securitization process didn't know what they were buying, didn't care as long as they were making money, and didn't have enough cash to cover mistaken bets."

TRANSLATION: I believe this is called mismanagment. And gee who is responsible for that? Oh yes the "managers" of these institutions.

"Unfortunately, you've got the brightest minds of both parties working night and day to come up with solutions, and so far there have been a lot more misses than hits," he said."

Ya Think!


"Paulson, a former chief executive of Goldman Sachs, also raised the hackles of some Wall Street bankers by suggesting they cut dividends to shareholders to raise their capital levels to cover potential losses. They said punishing shareholders was the wrong move for banks that are struggling."

So let me get this straight these bankers screw up up but, they don't want to punish the shareholders? OK how about these executives resign and sell their Hamptons houses, private jets and a only drive one car (without a chaffeuer) too. When they were making money were they giving any of the extra profits back to the rest of us taxpayers. I think not but, now that house of cards has collapsed they don't want anyone to pay for their bad decsions exept the U.S. taxpayers. I don't think so.

Bank of America's plan. Hola sucker taxpayers!

Yes the genius at the Bank of America are pushing a plan to help them out of the sub prime loan crisis. You remember Bank of America don't you? They are the geniuses who thought it would be a good idea to allow illegal immigrants to open up bank accounts with them. Then they went further and allowed illegal immigrants to get credit cards. Perhaps they should change the name of the bank to the Bank of Criminals.
Now these same corrupt banking officials have come up with a plan to help bail them out of their sub prime loan mess no doubt full of loans to illegal immigrants too. And guess who they want to be stuck holding the bag. Here is the money quote:

"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

Hola sucker taxpayers!

The Stimulus Bill and the corruption that caused it.

President Bush and congress had their photo op yesterday with the signing of the "Stimulus" Bill. Since I have paid my bills and loans on time, saved money and had some investment and work income that will just barely put me over the threshold. I will probably not recieve a check from the IRS from this legislation. However, since the money for the refunds of the stimulus bill will be borrowed I will be helping to pay it back in the future. And they wonder why we taxpayers are getting so angry.

But, while the lapdog pack mainstream media is mostly drooling over the Roger Clemens testimony there are more important storys that deserve more attention from the media and we the people that are directly related to why the stimulas bill was even created. Luckily, Washington Post reporter Carrie Johnson has a look at the roots of this financial meltdown and the corruption that caused it. Here is one of the "money" quotes:

"FBI officials said yesterday that they are conducting criminal investigations of 16 companies, while their partners at the Securities and Exchange Commission are probing nearly two dozen more. Those federal investigations follow subpoenas from attorneys general in at least four states and class-action lawsuits that target home builders, lenders, credit-rating agencies and the banks that packaged groups of mortgages into securities. "


This is a much more important story than if Roger Clemens got needles stuck in his butt. I say to the FBI and Security and Exchange Commission investigators: GO GET EM!

Bank of America, You've got to give them credit.

From today's Washington Post:
"Bruised by a rise in foreclosures, banks have been reluctant to lower rates for cardholders who have missed payments or had their credit scores slip, analysts and industry watchdogs said. Yet even some cardholders who pay on time have not benefited from the Federal Reserve's recent actions, as banks raise rates and fees to make up for losses in their mortgage departments, analysts said. "

Here is some more money quotes:

"Bank of America, for instance, notified some customers recently that their rates would increase as a result of a periodic review of their credit risk. "
Hmmmm Bank of America were'nt they the bank that .......
"In the latest sign of the U.S. banking industry’s aggressive pursuit of the Hispanic market, Bank of America Corp. has quietly begun offering credit cards to customers without Social Security numbers — typically illegal immigrants.
The new Bank of America program is open to people who lack both a Social Security number and a credit history, as long as they have held a checking account with the bank for three months without an overdraft. Most adults in the U.S. who don’t have a Social Security number are undocumented immigrants."

Bank of America. Higher standards? No! Higher rates.

Sub prime McCain?

"By last November, John McCain's presidential campaign was broke. To survive, he offered his fundraising lists as collateral for a $3 million line of credit from a local bank. But obtaining the loan required an unusual extra step: He had to take out a special life insurance policy in case he did not survive the campaign."-Washington Post

Well at least it was not an adjustable sub prime loan. When it comes to politics it is always useful to follow the money. Here is another money quote on McCain's loan:

"Cleta Mitchell, a Republican campaign finance lawyer who has been a critic of McCain's, said she believes the arrangement raises serious questions. "Did they base this loan on the fact that, even if he lost, he would still be a sitting senator and able to raise money?" she asked. "In my mind, that raises questions about whether he complied with Senate ethics rules," which bar members from using their position to negotiate financial terms that an average citizen could not. "

So John McCain gets a loan from this bank using his political donor list as collateral. I wonder how much of a loan the average person could get if they used their Christmas list as collateral. File this in the Hmmmm file.

Blood on the floor

"Stock markets around the world plummeted yesterday as a financial crisis that began in the market for U.S. home mortgages spread to almost all corners of the globe."-Washington Post

Welcome to the global economy. The ripples from the Wall Street ponzi scheme known as the sub prime market has turned into a big wave that threatens to clear the beach. I hope that most of us investors survive and those bankers who came up with the idea of giving $650,000 home loans to illegal immigrants making $18,000 dollars per year and other bad risks get swept out to sea and never return.