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.

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.

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!

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.

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.

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.

U.S. Taxpayers about to get smacked in the Fannie Mae

I traveled from St. Paul to Washington on Friday and opened the paper Saturday to bad news. It had all the earmarks of a taking out the trash news release. News that the U.S. Government aka the U.S. taxpayers were going to take over and bailout the two quasi private mortgage agencies Fannie Mae and Freddie Mac. This is real bad news that's why it is in the Saturday papers and on a day when a tropical storm was heading up the east coast. Hold on to your wallets as once again more money is flowing out to bailout people like illegal immigrants and others who should not have gotten a mortgage but, should not have been in this country in the first place.
Here are some of the money quotes:

"For years, they played high-profile roles in the political and civic life of Washington, hiring armies of lobbyists to help protect their unique status and, through foundations, giving vast amounts of money to charities large and small. That began changing with a series of accounting scandals beginning in 2003. The housing crisis raised more questions about their structure and operations."

Were was the in depth reporting of the mainstream press when this was going on? Following the antics of Britney Spears no doubt!

"It's a case where market psychology became more important than the fundamentals, and that's why they had to act," said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee"

Huh? Fundamentals are good but, investors are scared so let the taxpayers pay billions to make sure these "investors" sleep well tonight but taxpayers will be paying for years. I smell something fishy going on.

The problemo Mr. Obama is....

"If the government can bail out investment banks on Wall Street, we can extend a hand to folks who are struggling on Main Street," Obama said

Nice words from Obama looking out for the "little people". The problem is Senator is that some of the people you are bailing out with U.S. taxpayer money may not be here legally and that is a sub prime problemo.

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.

Anatomy of a sub prime problemo.

The Washington Post has an article that belongs in the "Hola suckers" file concerning the sub prime loan debacle that we responsible citizens will be paying for. As is usual in liberal mainstream media papers like the Washington Post no mention is made about the legal status of some those involved. Use your own editorial judgment because you can't rely of those of the Washington Post. Still the article shows the problem that all of the rest of us RESPONSIBLE citizens will be paying for. Here are some of the money quotes:

"Looking back, Glenda Ortiz can see she did everything wrong when she bought her house in 2005."

Duh! When you do everything wrong. Guess what happens?

"Ortiz, who speaks little English, said she didn't know much about the U.S. banking system. So when a Mary Kay saleswoman, Maria Esperanza Salgado, came to her door and said she could help her buy a house, Ortiz said, she believed her."

What could go wrong here? Ortiz has lived in the U.S. for nine years and speaks little English? Perhaps if she spent a little less time watching Spanish language Novellas on TV she might have been able to read some of the documents she signed.

Exhibit A:
"She signed papers in English that she didn't understand. One said she was married to a man she didn't know. "

Uh huh. Well this must be a new law that I am not aware of.

"Erick Gutierrez, housing director for the Washington-based Latino Economic Development Corp., said is all too familiar. Gutierrez blames the government for allowing so many sub prime loans, such as Ortiz's, which required no proof of income."

Oh yeah, I blame the government too! But, unlike Mr. Gutierrez I blame the government for not making sure that some of the people getting these loans are supposed to be in this country in the first place. Of course there is no mention of this in the article.

"According to the Center for Responsible Lending, 40 percent of loans to Latinos are subprime, and it projects that one out of five of these loans made in 2005 and 2006 will go into foreclosure."

Of course not all of these loans to Latinos where being made to illegals but, no one in the mainstream media or our government seems to be asking the question of how many of these sub prime loans were given to people who should not have been here in the first place. But, we responsible U.S. citizens should be demanding that they do! After all we are paying for this debacle.

"She said she had become so depressed about losing her home that she stopped working for more than a year."

Hmmm stopped working for a year? I wish I could do that. How did she survive? Oh but, she has somehow managed to scrape together enough money to hire another lawyer. Hola suckers!

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.

Clear as Mudd

In reading the commentary today's Washington Post by Fannie Mae chief Daniel Mudd all I can say is Hola Suckers. His attempt to use this taxpayer backed organization to help banks in the disguise of helping clear the current economic mess is pathetic. But of course it's not what he says it's how he says it. Here are some of the money quotes:

"Fannie Mae is not exempt from the housing cleanup. We have spent three years and billions of dollars repairing our accounting and our governance. We are taking our lumps along with the industry, but are now prepared to be part of the solution."

"Repairing your accounting and governance"? Don't you mean Mr. Mudd: waste fraud and abuse? Or is it just corruption and incompetence? And by the way where did the billions of dollars come from to make these "repairs"?

"New Americans in particular face a tortuous path to homeownership. Over the past 10 years, the Internal Revenue Service has issued more than 8 million tax identification numbers to immigrants. People who pay taxes and reside here legally deserve a chance to own a home. Some lenders use these numbers to verify identity and provide loans; others do not because there is no clear standard. We need one."


Why don't all lenders use tax identification numbers to verify identity Mr. Mudd? Because just about anyone can get a tax payer identification number. Yes, even illegal immigrants! Giving loans out to people like illegal immigrants who already show a proclivity to break U.S. laws is not a good business model as the sub prime debacle has already shown. Your lack of knowledge regarding taxpayer identification and the law does not give me much hope that this sub prime mess will get better soon.

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.

Bank of America is banking on amnesia.

Bank of America is going to be buying Countrywide Mortgage and it's sub prime loan portfolio. Of course they think they can make money eventually with this deal. The head of Countrywide certainly will. Here is the money quote:"In a written statement yesterday, House Financial Services Committee Chairman Barney Frank (D-Mass.) said Mozilo, "who will be profiting from this transaction personally," should "donate a substantial portion of the $150 million he has collected over the last several years to nonprofits and other institutions that are helping us deal with the problem he helped to create."
I'm sure Bank of America also has it's bases covered too. If things go sour they can just call up their lobbyists in Washington to get the U.S. taxpayers to bail them out. After all Bank of America is one of the banks that give credit cards to illegal immigrants. Now this always sounded like a pretty nutty idea to me since these customers are known to have broken U.S laws already. Yet Bank of America wants them as customers. Here let Bob explain it and see if it makes sense to you:

I told you so.

To all my fellow taxpayers who took out loans and dutifully paid them back and continue to live within your means I say Hola suckers! As the Washington Post article today the Bush administration is set to announce a plan to bailout those sub prime loan borrowers and of course it involves some of your tax dollars. Here are some of the money quotes:

"The administration's plan appears to be winning support on both sides of the aisle. And perhaps as
importantly, it has backing from key private-sector players, including nonprofit groups, mortgage lenders
such as Countrywide Financial and big banks such as Citigroup. "

Imagine that! The banks and mortgage lenders that gave out these sub prime loans, the non profits that will get an influx of taxpayer money to help support it are all for the plan. Who would have thunk!

"In some ways it's worse than a taxpayer bailout," said John Berlau, director of the Center for
Entrepreneurship at the institute. "It pressures an industry to essentially alter the terms of millions of
contracts, and it's going to make investors think twice about investing in America again."

Not to mention that no one will take loan agreements seriously and those who invest in mortgage backed securities may no longer take the risk.

"Yesterday, lawmakers expressed concern over the accountability of nonprofit groups that would receive
public funds under the administration's plan. Some taxpayer money -- about $200 million -- would go to
nonprofit groups staffing a national credit-counseling hotline for troubled homeowners. Some
Republicans worried that about the expanding role of local housing authorities, which can be difficult to
police."

Yes, hola sucker taxpayers for less than a quarter of a billion of your taxpayer dollars your government will be giving this money to "non profit" organizations. Yeah, what could possibly go wrong with this idea. They are "non profit" but, that does not mean they will be non corrupt with our tax dollars. Stay tuned!

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!