At last a plan that gets at the root cause of the crisis...

[Mvic]

http://online.wsj.com/article/SB122531677860781723.html

This is the type of plan that should have been considered 1st not last, many of us on ET had the foresight to realize that backstopping mortgages was what was needed at the end of last year, it has only taken those in Washington going to the brink of financial armageddon to begin to start talking about a real solution. And the cost, a paltry $40-50 billion, had they spent that or even $100B a year ago reducing interest rates, lengthening terms, and in extereme (but not the hopeless cases) cases modifying principle all the massive intervention of the past few months and the trillions in losses and wealth destruction and the hit to GDP could have been substantially smoothed if not avoided.

 

[AMT4SWA]

The current economic financial grid takedown was never about mortgages.....that was the side show distraction. Globalist wealth entities have set us up for a wealth transfer consolidation, which has played out almost exactly as their own documents described.

The world one year from now will be so completely different from what we knew only 6 months ago.......there will be very clear winners from the "Globalist (wealth transfer) Games 2008".....and that wont be US.

 

[lassic]

something is fishy, don't know the answer or solution but...
"As many as 7.3 million American homeowners are expected to default on their mortgages between 2008 and 2010, with 4.3 million of those losing their homes, according to Moody's Economy.com, a research firm."

2.4%, 7.3 million out of 300 million population(don't know total number household, would have been a better comparison),
is the economy this fragile or are we being fooled into "wealth distribution" from taxpayers to the wealthy

 

[poyayan]

Here is the deal. Whatever help those deadbeat homeowners getting, it is only fair the honest homeowners get them too.

IE. If it is low-interest government loan, then every American also should have the right to them.

If it is reduction of principle, then those don't need it should get a tax credit of the same amount.

 

[poyayan]

Quote from lassic:

something is fishy, don't know the answer or solution but...
"As many as 7.3 million American homeowners are expected to default on their mortgages between 2008 and 2010, with 4.3 million of those losing their homes, according to Moody's Economy.com, a research firm."

2.4%, 7.3 million out of 300 million population(don't know total number household, would have been a better comparison),
is the economy this fragile or are we being fooled into "wealth distribution" from taxpayers to the wealthy

As always, we are being fooled. That 700B didn't do jack. Fed still need to do the lending itself to the CP market.

 

[Mvic]

I don't know about any of that, what I do know is that if you aren't already long get so and in a big way.

As far as everyone getting a mortgage workout that is obviously not going to happen so you have to ask yourself if you want a few to get the help the system needs them to get or if you want every non problem homeowner to have their home value decline further, the financial crisis to linger (and yes if mortgages had been back stopped at the beginning of the crisis instead of calling sub prime contained the crisis would not have cascaded, I have no idea if that was by design or not as I don't move in such lofty circles), and GDP to take another whack. As bearish as I have been and even as I look around for properties to buy having been a renter the last three years, I would rather the crisis not get worse than it is already. With all the wreckage so far and all the bailout out money already burned and ineffectively so I can deal with an extra $50B being used to actually do something that will work.

 

[poyayan]

Mvic : it is not mortgage anymore. Do you think 50B will entice foreigner to buy billions of CDO again? That market is done for. There is a supply of money going to mortgage market that will be gone forever. Hence home price will need to be adjusted downward to match that.

As for the homeowners, fix them into 60, 90, 120 years mortgage if they need to be fixed into something that they can't afford.

 

[AMT4SWA]

Quote from poyayan:

As always, we are being fooled. That 700B didn't do jack. Fed still need to do the lending itself to the CP market.

BTW, just a fact to pass along......the bailout is NOT in the $750 to $850 BILLION range. The bailout bill ACTUALLY allows for TRILLIONS to be used as needed, the $700 to $800 BILLION dollar number is really just for perception sake......bloomberg news has already written a good piece which highlights this unfortunate fact.

 

[arealpissedgoy]

Quote from lassic:


is the economy this fragile or are we being fooled into "wealth distribution" from taxpayers to the wealthy

when half witted illiterate imbeciles making $20,000 a year mouth off concerns on taxation policies for those making over 250K

you know the only answer can be

"we being fooled into "wealth distribution" from taxpayers to the wealthy"

 

[Mvic]

Quote from poyayan:

Mvic : it is not mortgage anymore. Do you think 50B will entice foreigner to buy billions of CDO again? That market is done for. There is a supply of money going to mortgage market that will be gone forever. Hence home price will need to be adjusted downward to match that.

As for the homeowners, fix them into 60, 90, 120 years mortgage if they need to be fixed into something that they can't afford.

True enough, it is no longer about just mortgages that time has long past but house prices are still a very important piece of the recovery puzzle and unless the foreclosures are taken out of the equation the market will have a hard time gaining its footing just as it does anytime there is forced selling that artificially impacts prices in any significant market sector.

Absolutely, extend the term if need be this is what I proposed as a solution back when subprime was still an issue. If they had dealt with the mortgages back then we would not have gone through what we just did. Maybe those who say it was all orchestrated are correct(personally think it is highly unlikely) but if they are I think those doing the orchestrating lost control somewhere along the way.

I hope that a lesson has been learned and that is that when you have a creeping problem that has the potential to unravel the whole system you act swiftly and decisively rather than jawbone and apply half measures. Oh, and it would help if people who are in charge of monitoring the financial system actually had a clue about what the instruments employed are and do. The whole notion that someone who has good management skills can transfer to any area without expertise in that area is bunk and yet it persists in this MBA and consultant saturated culture. Brownie did NOT do a heck of a job because he didn't know anything about the real work that FEMA did (that and he was probably a bad manager to boot, just like his Boss!). Obama's chief health care architect is a Harvard economist who doesn't have a clue about the actual challenges of providing quality healthcare (trust me I know this 1st hand having talked to the guy, utterly unrealistic about the actual working of healthcare and yet has written a book about it and will be directing Obama's healthcare plan!).