Saturday, August 7, 2010

Mainstreet Is Going To Get A Gigantic Bailout

"Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages - one in five - are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama's loan-modification effort. HARP was just extended through June 30, 2011.
"The move, if it happens, would be a stunning political and economic bombshell, less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17, when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie."
Normally I blow this type of stuff off. But Pethokoukis is a serious journalist with a solid pedigree and a long list of inside contacts, which you can see at the link below.
I hope this is just a rumor. Seriously. You want to tax renters (about 35% of us) to help pay for mortgages for people who entered knowingly into a business transaction that sadly did not end well? I truly feel sorry for them. I have several very good (and responsible) friends who are in trouble, and I understand the issues. They just bought at the wrong time. But what about my investment in a start-up that failed? People who are behind on credit cards? If you bought a new car, you are underwater the moment you drive the car off the lot. Help for those? Where does it end? Hundreds of billions of debt that our children will have to pay? Say it ain't so, Joe. You can read the whole blog if you have adult beverages or blood-pressure medicine nearby. More Here..


  1. My home is owned free and clear.

    My car is 17 years old

    I have a $7K bank balance and a 401K worth $200.00

    I have always had a job, even jobs that the POTUS says we Americans will not do, to justify the illegal Mexican invasion of the south west.

    I have not had a job for 2 years! Where's my bailout?

  2. I am so taken back by this I cant even write. What a nightmare! People need jobs...that is the bottom line. If they want to help these homeowners then reduce their interest rates. The refinancing will come with fees and expenses people cant afford. Debt has to be PAID off and jobs have to be brought back home. The govt. assuming everyone's bad business deals has to stop.

  3. I don't have a mortgage and I have no debt, but I want a mo-fk'n bailout, too! How about they cut non-home "owners" taxes in half for a few years.

  4. I saw this in other forums and I was furious! I didn't get a Fanny or Freddie loan, my son got a VA loan...we are all "under water" but we are happy with the homes we have and aren't using them as investments really. Where is our "reset"?
    I somehow don't think this is going to happen...mostly due to the fact that it shows prefrence to one segment over another and would probably be unconstitutional. (not that something like that would concern this white house). However, the ineptitude of the other (HARP & HARP 2) programs. They have a huge back log and they aren't working. The government might SAY they will do this, but implimenting it is another thing.
    I'm so sick of my taxes going to help out everyone but good people who make good choices and work hard...oh wait, those people don't expect hand outs.

  5. This administration just doen't get it & the reason they don't get it is that none of them ever held a job, ran a business or had to meet payroll.

    This country needs to rebuild it's manufacturing base - this service sector shit won't cut it & besides which we are already outsourcing that!

    Obama needs to send 100 oversight individuals with a business background to each and every state to go from business to business - asking how can we help you compete? what can we do to help you grow your business and hire more people?
    Is capital available to you - etc. etc. etc.

    These people are doing everything but and the list is too long to even start on. Until we start making something again - all this bailout shit is just blue smoke and mirrors for the enevitable

  6. I would like to agree that this is 'unbelievable', but it's not. I've been saying it for months. It's not a bailout, it's wealth redistribution. As many of you have noted, people who work and act responsibly don't have Fannie and Freddie loans. It's the people who don't work and already get our tax money. They're about to get some more.

  7. Rewarding stupidity. This is this hope & change.

    The fact a home is worth less than the loan has no bearing on anything unless you plan to sell the home with expectation of reaping a finical gain.

    Listen, these people that bought these homes and are underwater made a choice. They gambled they would have a jobs and their homes would appreciate forever. They knew what their cash flow was going to be moving in and felt this was a good trade. So pay up and shut up. Those in favor of another bailout are the same ass clowns that use credit cards and make minimum payments -$4.00 lattes with 28% APR. Real brain trusts - Obama supporters.

    Forget it, there is no intelligent life here anymore, the meaningful jobs are not coming back. Nobody will hire these fiscal illiterates that can't manage money much less figure out the round peg goes in the round hole.

    Step right up to Barry's taxpayer subsidized home flipping. Coming up next, taxpayer subsidize lotto tickets!

  8. 7:01 What Business did Reagan run? George Bush Jr. ran a business and ran the U.S. into the ground as well. He also left it a mess for Obama who is also wetting himself. Look, do you honestly think we would be any better off with McCain as president? I mean honestly...The last 8 years for Americans under Republicans was a disaster. The next four with Democratics will also be a disaster. The system is broken. How can you claim to have a democracy when if you don't like the party in power you only have ONE viable alternative? It's time for an American Revolution 2.0.


    There has already been a wealth distribution going on the past thirty years and that has been to the top 1%. It continued with the bailouts that socialized losses and privatized profits. I would agree that the 90% taxes the top 1% were subject to in the early 1960's was to high. We have gone to far the other way now though. The whole tax system itself is a a form of wealth distribution. We've seen though that you can't survive on credit forever while tax revenues continue to fall off a cliff.

  9. The tech bubble popped so greenie swallowed it. The housing bubble popped so bernie swallowed it. The sovereign debt bubble is getting ready to pop. What happens when someone swallows a live grenade with the pin out?

  10. I have not had a plastic time bomb (AKA Credit Card) for nearly 30 years. I have not earned more than $30K annually. I don't have any fancy shit. Believe it or not, my "Big Screen TV" is one of those ancient, rear projection systems. The picture quality sucks, but I will not buy a new TV till this one dies and then I'll pay cash, if I have any!

    I have lived as a Poster Child of financial responsibility and my reward was job termination and 2 years of unemployment.

    It's no fun anymore...

  11. I'm in my early 20s and I have no motivating force to get a job. Fuck it, why bother!? I'm working on a manuscript, it will get published at some point. I'm not expecting much money from it. But I know I won't work again or even search for a job.

    People in my generation all have this same mentality; even though most are too stupid to understand they do. What reward will you get from working? Your money will be given to others and you'll just have to work harder to make a living.

    Hard work isn't worth it anymore. Instead why not try to do the wrong thing and look for quick escapes? Will I be bothered if I end up on the streets? Nope. Walking around with bums has more appeal to me than working 60-80 hours a week just to afford a home with food.

  12. You are only working for the elite anyway: Government coffers, banking fees, interest and taxes. You don't ever get to keep anything. The system must collapse. That way, the elite can be in the same boat as us "hillbillys".

  13. What's on the books at banks is ZERO. So what the heck difference makes if your house is "a percent"? any percent of zero is ZERO. Your house is the wholesale cost of the boards and nails in India and China, minus about 50%. Anybody who voted for Bush and didn't listen to the jobs getting shipped offshore deserves what happens next. I mean, FASB accounting rules had to be bent. ZERO is what banks, the investment and specualative community around banks and real estate. Live with it.

  14. 11:58: You wouldn't be on the streets, as the government would probably give you housing, food and medical care.

    But everyone would work if they could get a job with a decent pay. However the government and the rich elite made sure that's not possible. The first part of their plan was to put everyone in your generation in debt anyway, but now the second part of their plan is just to not have any jobs. I don't know what kind of idiot came up with this plan, but that's what they're doing.

  15. This is just another robbery of the working class by the PTB bankster class! This has got to stop! When will our economy crash with all bankster bailouts?

  16. I for one think ees great what the goobermint to do for me a new house only if I can get one with door big eoungh for mhy crane to ge my wifge into eet/

    She has got a so much to eating disorder and it is affecting me so much i cannot work. My doctor says I am depressed about thes but still soocial secretary wil wil not big me benefits.

    Waht would ou do if you couldngt get medicine and food when uou take kae of wilfe and babya ll day. I cannot get drunk anymore because of all the trouble even if I drink full case.

  17. 7:57
    Lets get something straight right out of the gate

    This country was designed by the founding fathers as a Republic - not a Democracy. Pull
    the 2 up on your computer and read - there is a huge difference!

    I do not have room to debate what president had/did this etc.

    But they all had some business experience ( when your a working actor, what you just sit around and wait for the phone to ring? no, you have agents, advisors your pounding the payment - your running a business and that business is selling yourself for this movie role)

    More importantly; any President of any company worth it's salt will tell you - whom you surround yourself with is equally as important as you are.

    Pull up the prior adminstrations cabinet breakdown with business experience and you'll see what I mean - you cannot run an economy the size of ours when nobody on the board of directors has any clue what makes a business tick

    It really is as simple as that - our current cabinet came from special interest groups and wall street.

  18. This is a republic, however these tinhorns we elect think they are kings. Just look at these pompous assholes as they gallivant around the globe, doing the "people's business."

    We the people were handed something special by the founders. It's our fault for allowing this to grow into the beast we now face. Instead of the king of England wow we are ruled by thousands of little kings and queens that poke their fat fingers up our asses each day to rip out a pound of flesh.

    This narcissistic corrupt kingdom cannot fall fast enough.

  19. the ability of homeowners to maintain their homes will aid the whole economy. those of you talking about where is your bailout will have look more closely at where you are helped. it can be through extending unemployment insurance or access to credit. or possibly you were fortunate to ride the credit build-up (mainly through gov't guarantees) prior to the fall. stop begrudging families, on this issue.

  20. 7:24 says stop begrudging "families"

    Well, some families are destined to be renters. No guarantee of home ownership is spelled out in the Constitution. Most of those in over their heads had no business getting in. Many responsible home owners were also caught up in the down-swell due to the government financed housing glut, but they don't sit around and whine about their losses, they gut up and move on with their lives.

    The cry babies that expect others to pay their way out of the housing casino are worse than welfare cheats and petty criminals. This is wide-scale grand larceny.

    Government guarantees means robbing the people that actually pay taxes so others can get a free ride. As my taxes go up my ability to help others through charities goes down. I will begrudge those families that rob mine so they can enjoy the fruits of my labor. They hurt my family and those that really are in need of help.

  21. Some have dreams of exchanging the collapsed great ponzi economy with a rebuilt American industrial capitalism that produces real material wealth for the ordinary working people. But this generation of capitalists only know how to make profits from financial scams and from de-industrializing America.
    They do not even have an institutional class memory of making money any other way except from cheap foreign labor commodities and getting bankster bonuses from the 'productivity" of profits from ponzis , from outright corruption and stock market
    Manipulation organised and blessed by the governments they own. The whole american economy is now structured to serve that old Ponzi 'services" economy.

    They have already carried a financial coup for bailouts socialising past losses and for handouts of cash to replace their capital reserves , they have built a Corporate bailout State. They are finance capitalists = usury capitalists that control America now ,not industrial capitalists.. They make propaganda and are sending send up trial balloons plans as can be seen in this article above to find out what form of bailouts might be acceptable to Americans.
    Americans are already angry not very keen on another open bailout like the last TARP show ,so the ruling elite seeks another way to prop up their failed Ponzi system.
    With falling state revenues they cannot afford the cost of their wars, high social security benefits and handouts too. Let alone rebuilding an industrial productive America!
    It makes little difference to them how well American live ,just as long as their profits on their past investments continue. If they think that those income returns from dud mortgages could be best got indirectly through the government help in long term management of the mortgages for the bondholders and banksters ,well so be it.
    America has already set out on this bailout road , the next level of bailouts must be made soon and will be made by the Fed and Treasury. Whatever puppet Prez or political party is in nominal control of the senate and congress.
    The die is cast and the Rubicon was crossed to an open Corporate state bailout for capitalism . Even by the printing press as enabled by the financial coup over treasury. The dollar hegemony Ponzi and living on foreign credit and cheap commodity supply is over. Bankrupt .Insolvent!
    As America is already de-industrialised except for the military related industries ,there is no other large source of profit now available , than looting the housing assets of the middle class. As Americans are already maxed out on credit this middle class will be turned into debt Peons.
    Anyway, in order to rebuild an industrial America one needs to find industrial capitalists with capital and assess to a credit supply for working capital.
    And that is against their own short term aims of realising profit on their past investments! They will not tolerate a plan for investment for re-industrialising America and call it Keynesian big Government. Besides that would create competition for their investments in Chinese industry !
    The , corrupted crop of finance capitalists America has now would not have a clue how to build industry. All they know about is usury and usury control of the state as guarantor for the TBTF banksters. Could you trust that corrupt corporate state socialist thieving bankster lot on Wall St. to re-build an honest industrial America?
    If not ,the only alternative to the current plans for corporate State Fascism for rebuilding America and providing a decent living for Americans may be socialism.
    Perhaps, America will need to find a Stalin or Stalinist economics to get out of the system of debt enslavement to usury debts and permanent unemployment for millions ?

    Should america concentrate on heavy and machine toolmaking industries like Stalin
    or light industry first in the Maoist manner?


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