How low will the Market go before Bush acts?

[tim huntzinger]

Oh yeah, that is me, just creating panic.  I caused the stock market to correct itself and am just happy as a clam about it.  I just want to stick it to The Man.  Right.  Got it.  Worldwide economic panic but it is because of everyday dudes like me, not because the banks themselves were freaking out.

All I ask for is to add some liquidity via Fannie Mae, for Bush to come out and make a statement, to accelerate whatever reforms need to be made to the mortgage game, and suddenly I am asking for Absolute Immunity From Any And All Personal Responsibility.

Okie dokie!

[MichaelC]

I wouldn't endorse that kind of stuff.  Not a straight funds injection.  Maybe this stuff should have been curbed sooner, but it was driving much of the assumed "economic gains" of the last few years.  Having that bubble was just about the only thing working for this administration.

We'd be in a better place now if we weren't borrowing money.  We aren't even funding the gov't ourselves, much less the war.

[aoxamaxoa]

LAS VEGAS ECONOMY BOOMING

Las Vegas, NV (AP) -- In the last 24 hours, the Las Vegas economy has shown signs of increasing economic activity. Apparently, the seeds of the boom were planted starting on Thursday around 1pm when net receipts at the local strip clubs skyrocketed due to a mysterious unidentified man who appeared to be in his 80s started handing out C Notes to all the ladies. This individual was seen at all of the major strip clubs and, later, at the casino tables.

Sources tell us that the unidentified man was heard ranting about how you can't "Eat IV", leading some to believe that he may be an IV drug user on some kind of high.

The tricle down effects on the real economy in the Las Vegas area have been astounding over the past 24 hours. Economists believe that this could signal a turning point in the stagnant Las Vegas Housing market.


Intrinsic Value

[bokworker]

Timmy, FNM cannot do anything about this situation. Continuing to ask for this as a response leads me to believe you have not read some earlier responses explaining this. As well, reforms to the mortgage "game" would NOT alleviate the problem. In fact, some of the reforms, like responsible lending that includes paying the loan back, are exactly what is going on. Hey, drink too much of the "kool-aid" and there is hell to pay with a nasty hangover.


The Fed's recent additions of short term liquidity could be deemed "life support"... a cut in rates is a bail-out. As well, with Bush's credibility do you really think ANYTHING he could say would soothe market angst?

[RecycleMichael]

My investment in baseball cards and beanie babies should get me through retirement.

[Double A]

Don't ya just love how all these proponents of getting the government out of the free market, start crying for a government bailout the second their portfolios take a plunge? This is poetic justice. Karma is a b*#tch. BTW, to everyone who ridiculed me for pointing out the serious problems we have in our economy by painting me as an alarmist or a naysayer, I hate to say I told you so, but.... lets just say vindication is a very rewarding feeling. Somebody call the wahhmbulance,  the fascists need some corporate welfare, stat.

[Rico]

"The Fed's recent additions of short term liquidity could be deemed "life support"... a cut in rates is a bail-out. As well, with Bush's credibility do you really think ANYTHING he could say would soothe market angst?"

^
Yes......!


"Today, my fellow Americans I am resigning the office of President of the United States....

Joining me in my resignation will be Dick Cheney and Codoleeza Rice..."






[}:)]

[tim huntzinger]

Look, I am just siding with Jim Cramer on the FNM thing.  If we can reign in predatory lending we can certainly do more to protect unsavvy consumers. Clearly I am not the smartest guy in the room but if one leg of the market is tanking that brings down the whole shooting match. Sending the mortgage industry some walking around change is not irresponsible if it prevents disaster.

Bush has to fight the negativism with some sort of assurances.  Lie to us, just say something to make us feel better beyond 'we respect the Federal Reserve's independence.'  In my heart of hearts I have to believe Uncle Ben was called.  Just ignoring the issue is a disservice to the nation, IMHO.

[cannon_fodder]

Tim,

Our fundamental difference appears to be in personal responsibility.  I feel that people should be free to make bad decisions, and are obligated to suffer the consequences.  You are arguing that they should be free to make bad decisions, and someone else should suffer the consequences.

Remember, these companies are owned by other people - mostly Americans.  So you would be forcing the Americans that were smart enough to save money and invest to subsidize those that were dumb enough to spend more than they could afford.  To me, that should not be the behavior the government is encouraging.

The mortgage system is already set up to be very forgiving.  You do not get your house taken away for being late a month, or even missing a couple months payments.  It takes MONTHS to actually lose your house.  Which generally means you are in a spiral you will not recover from and NEED to get out of the house for financial survival anyway.  

The institutions that made these high risk loans wanting high risk returns will lose billions of dollars.  I have no sympathy for them either.  Like the purchasers who could not afford it, the companies made the loans to get more than they really could (in interest).  Both parties took a high risk and both will now lose.  Too bad.

It may shake the economy more, but government intervention is not needed to keep the ship from sinking.  The deck is scuffed and a few poor bastards may fall overboard, but the vessel is sound (/pats self on back for analogy).

Thanks for the discussion.

[bokworker]

Rico... you had me right up to the Condi part....lol.

Tim, in my book predatory lending occurs when a lender makes a loan with convenants that are to the lenders advantage with the express intent to be able to foreclose and seize collateral that is worht MORE than the loan. The fact that lenders are losing their collective a**es and now hold property that is worht considerable LESS than what was loaned is therefore NOT predatory lending.

We have all seen contracts across various business dealings that include fine print and statement s that are hard to understand but we already ahve truth in lending laws that state that mortgage loan documents must show in BOLD print the effective rate of the loan for the entire term. If your beginning rate is 2% and the loan has an effective rate of 8% and you don't understand the meaning of that then I question whether you should be taking the loan out in the first place. the reality is we went through a period where not only was this understanding not important but that you only had to qualify at the low intial rate (sometimes call a teaser rate) and not at the effective loan rate.

The value of housing as an asset class was and is driven by the availability of credit to purchase it. The recent period shows that making credit available on terms that are too lax does not spur more people to make rational responsible borrowing decisions.... the payback of these irrational, irresponsible decisions is not the end of our economy as we know it. And while not painless it will end up repricing the housing market to more reasonable levels.

One last comment Tim. have you ever listened to the disclaimer at the end of each segment of Jim Cramer's show? You should and heed the statement.

[Wilbur]

quote: Oh yeah, that is me, just creating panic. I caused the stock market to correct itself and am just happy as a clam about it. I just want to stick it to The Man. Right. Got it. Worldwide economic panic but it is because of everyday dudes like me, not because the banks themselves were freaking out.

President Bush?  Is that you?

[tim huntzinger]

[VIDEO: HERE is Bush keepin' it real . . . ]

My Lord and Savior Jim Cramer has singlehandedly saved a 1000 point crash.  All praise and glory to Him!

There needs to be a Congressional investigation of the matter.  Consumers are protected from themselves all the time and corporations whether they be banks or toy manufacturers are not immune from regulations.  I hope stockholders and vanquished homeowners find someone to sue, because someone made money on the deal and that is not right.

Folk with families who were repairing their credit and cannot refinance need assistance.  If that means banks get hosed, so be it.  And for all of you 'personal risk at all costs' types, what is the FDIC but Big Bad Gubmint protecting your assets?

[rwarn17588]

There doesn't need to be a congressional investigation. The risks of taking out a loan or investing in stocks are apparent, and are in writing.

There won't be any lawsuits worth a fig; see above.

The FDIC protects basic savings; this is commonsense fairness. It's never protected you from defaulting on a risky loan, or should it.

And if you're dumb enough to put your money in a non-FDIC institution, that's on you.

[HazMatCFO]

Bush admin has been restrained when it comes to interfearing with financial markets. I suspect unless there's a dire emergency, you're not going to see involvement here either.

The Fed is taking action by cutting rates and for now, that's probably good enough.

[tim huntzinger]

This is interesting, NYTIMES reports '. . .in March, the head of the Federal Deposit Insurance Corporation, a banking regulator, had urged Congress to create standards to protect borrowers with poor credit.'

Huh.  Imagine that.  The FDIC - which protects banks from cash shortfalls - suggested that Congress protect stoopid consoomers.  I count myself in good company.