Willem Buiter, a professor at the London School of Economics, makes Santelli's case AND digs into the mortgage interest deduction and its effects, in this post on his blog: Home loans in the US: the biggest racket since Al Capone? Of course, being as how he's from London, he makes it sound all classy & sh*t. Anyway, some pretty good points to chew on in there. My point in this, um, gentlemanly discussion he gets into in this bit: Also, not to commit the violation of engaging in reasoned discussion in the middle of all this bomb-throwing, but there are three parts to the Obama plan: 1 - Allowing folks whose homes are nearly or completely underwater to refi to a lower rate without bringing down the principal. 2 - Handouts to folks to make their payments, basically. 3 - Restructuring mortgages. I can't find a problem with the first part. (yes, I'm a socialist pig. Sue me. If, on the other hand, anyone wants to ask nicely why, I'll explain.) Third part is a case-by-case kind of thing. Second part is just crazy.
I'm sorry, but were you not the poster who said, "STOP with your ridiculous derivatives blame"??? And you don't think that the CDS market has had any effect on the current state of our frozen credit markets and banking system? If those derivatives aren't the problem, then why did the market take a big dive when Lehman went under? Why did the federal government "loan" AIG $145 Billion? In case you've been living in a cave the past week or so, the MAIN point of the Barron's Plan or the Administration's Housing Plan is to help the BANKS. Why are the BANKS the center-piece of Tim Geithner's work right now? Simple. The CREDIT MARKETS ARE THE KEY and they need to be unfrozen in order for the Economy to stop contracting. You keep talking about the consumer who overpaid, or bit off more than he could chew, but that is a smaller portion of the pie. Feel free to do the math.
That's what this thread is about, you dimwit.... Santelli's rant in response to Obama's plan to bail those losers out.
Duh. And why does the Obama Plan seek to bail-out the home buyer who bit off more than he could chew? Try turning on your BRAIN and thinking up the "food-chain" another level or two. Duh.
No, you engage your brain if you have one. The abdication of personal responsibility is NOT in our country's long term best interests... only naive liberals and/or people needing to be bailed out drink that koolaid. Only in America would we reward fraudsters and the irresponsible in the name of the "greater good" by bailing them out with money our children and grandchildren will have to repay. People used to sacrifice so future generations could lead better lives. Now we steal from future generations to underwrite our mistakes, hoping it will make our lives undeservedly easier.
beggar thy neighbor like the 1930's is back gain. instead of between nations it is within country. people who made bad decisions in investing in their homes are asking the gov't to force other people particularly renters to bail them out. why should renters bail out homeowners?
Be my guest to blame CDS markets for frozen credit markets. Thats pathetic to say the very least!!! To remind you a) credit is frozen because cash is precious and nobody is willing to EXTEND credit at this moment b) The market sold off after Lehman NOT because some banks/funds suffered losses from the Leh bankruptcy but because the trust in the system was shattered and a major financial institution was allowed to fail for the first time in this crisis. Consensus among financial professionals is that this should have never happened, that the govt should have stepped in similarly than what they have done for AIG/BS. c) The govt loaned money to AIG because they made bad investment decisions (only a small part of those bad investments can be traced back to CDS positions) and a failure of AIG would again have had an even larger effect than the Lehman failure. Banks <> CDS, just for your information.
This is the main issue here. It's stupid, but fine if people want to blow their own futures in this mess, but leveraging our grandchildren's futures is immoral. These apologists refuse to address this issue. Anything as long as the value of their home doesn't go down. Regardless, these fixes will fail anyway. -burn8
If you in fact were an idiot who actually paid an inflated price, and can afford to keep up with your mortgage, there will be a larger nicer house in your future as prices decline and you can upgrade... Look, an idiot who overpaid for his house BUT can afford to keep paying for it will be able to upgrade after prices fall 80%... He bought a 500K house instead of the Million dollar house... at the end of the day the 500K house is selling for 100K and the million dollar house is selling for 200K, and so he should be able to upgrade into the former million dollar house no problem (so long as he still has a job and can keep up with his current payments).... It's only 100K more rather than 500K more...