Santelli's Rant: A Watershed Moment? 102 comments
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Yesterday I got an email from a friend while I was out with the kids. "Did you see Santelli on CNBC?" he asked. When I inquired what he meant he told me to watch it ASAP.
After I watched it, it got posted to YouTube and wow, what a reaction. As I write this is has been less than 12 hours since the video went up and already over 105,000 people have viewed it and the less than 5 minute video has received over 1,300 comments. For those who missed it, here it is:
A less than scientific look through the comments says that they are trending 10 to 1 for the sentiment expressed by Mr. Santelli. If we put aside the discussion of whether he is right or wrong, one cannot deny that he clearly touched a nerve with a ton of angry people.
If we watch the nightly news on any network we see story after story of people about to lose their homes essentially through no fault of their own. The clear implication is that were it not for extraneous factors, everything would be OK. I am sure that there is a certain segment of the population for whom that is true, of that there is no doubt. BUT, it is impossible to have a collapse in any market like we have had in housing unless there was extreme excess from all parties, banks and buyers. The larger the fall, the more froth and irresponsibility involved in the bubble phase. There are very few "innocent victims" here. While I am sure we can all dig to find one, I am just as sure with very little effort we can find 50 who aren't.
Back in October of 2007 I wrote about the following story:
Wilbur Ross, a self made billionaire and his son were playing golf a few weeks ago. As they finished up, their caddy approached them and wondered if he could ask them a personal finance question.
"Sure," Ross replied.
"I bought 5 condos in Scottsdale, Arizona," said the caddy "I was able to flip the first 3 but I am stuck with the last two. Should I keep making the payments on them or just walk away?"
Ross thought about it for a minute and asked "Well, where are they? Is the area nice? What else is around the complex that may be of eventual value?"
"I do not know," the caddy replied, "I've never been to Arizona."
That, is a nice neat summation of what a "bubble" in a market looks like. When your caddy thinks he is Donald Trump, it is time to take a close look at what is going on.
Where are the heart-breaking interviews on the nightly news with folks like Wilbur's caddy? Where are the "lesson learned" pieces about gamblers who rolled the dice on housing? See, we know they are out there. We also know they are the majority, not the minority in this scenario. This explains the frustration on people's part when it comes to the hundreds of billions of dollars being thrown at the "problem".
The common argument for doing it is "we have to stem the tide and save people". Well, the FDIC did that already with its first mortgage modification plan and after six months over 50% of those loans were again delinquent.
Of course the criticism of Santelli is coming. The Columbia Journalism Review was the first that I saw. It is the typical stuff, focusing on the tone and anger of Santelli's rant, (and yes, that is what it was), ripping a few sentences and extrapolating much more from it than what was there.
The author of the piece denigrates his knowledge of Santelli and the network with this one sentence. "Of course, he didn’t get himself into nearly this much of a lather over the trillions of dollars we’ve given to Wall Street welfare cases and the busted banks." Now, anyone who has seen Santelli or watched even just a few days of CNBC over the past two years has seen an almost daily diatribe from Rick opposing EVERY bailout that has come down the road.
To make it simple, go to Youtube and watch any video of Rick at random, the thought process is the same, government needs to stop the bailouts, all of them.
He then says "this bailout isn't even designed to bailout homeowners but the banks". Umm... somebody might want to tell President Obama that because he has told us "this is designed to save 9 million people from losing their homes". Ooops.
Since the author of the Columbia piece clearly does not even begin to know his subject (Santelli or the bailout plan), further discussion of the "every homeowner was screwed by the banks" piece bears little more mention.
I am sure there will be others, but that is all I have now near midnight.
What is far more important than an erroneous criticism is the emotion Santelli has unleashed. Read the 1,300 plus comments on Youtube, read the page after page of Twitter commentary on it (here is the RSS feed for the topic and see how the blogosphere lit up with the "Chicago Tea Party" Santelli suggested.
Now, personally I do not watch much CNBC (too much yelling at each other all day, gives me a headache). But what we do enables events like this to spread like wild fire. What gets me about this one is the total one-sidedness of the response from people. Those who would object to Santelli are outnumbered by a gargantuan number by those who are practically throwing their arms in the air yelling "finally" as if Rick expressed everything they have been feeling but not seeing in the MSM.
Politicians may want to look at this before they do something else, people are not happy out there and it isn't just because we are in a recession. It is because we feel the most aid and help is going to those people and institutions who got us in this very mess. That is infuriating for people who have behaved responsibly.
It should be noted that isn't because of what they aren't doing in Washington, but what they are and that is a huge difference.
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This article has 102 comments:
It's a little late for us little people to start making a fuss. People are only now waking up to what the ruling class has done, and we're already in the handbasket halfway to hell. To expect the fine public servants we have placed in Washington to come up with a sensible course of action, completely disregards everything that has been happening for the last, say, 20 years! I guess it takes a lot to make Americans upset.
The only course is to try to ride out the storm.
"
Bad news: we're back to 1931. Good news: it's not 1933 yet
"
www.telegraph.co.uk/fi...
Yesterday, a single voice expressed the anger of millions.
For some reason, finally, it caught the attention of the "mainstream media." I wonder if it'll catch the attention of policy makers. One can only hope.
It's sad that a single celebrity can do more than millions of citizens, but I guess that's our reality: back in 2008 when the Leave No Banker Behind Bailout (EESA) was passed, calls, faxes and letters to Congressional offices were 50-1 against it in most districts, as much as 300-1 against it in some.
Regardless that the message should've sunk in sooner with "those who matter," at least it's finally getting through to them. Thanks for that Rick.
Those loans have a free embedded put - a put which the American banks and families are paying for.
With out the non recourse walking away would not have been an option.
a. Starting today we need to end non recourse loans
b. loan which gets renegotiated needs to end being non recourse.
Rick should view the same experience Jim Cramer had by living in a car or he should have my experience in 85 where I got a house foreclosed on and it was 800 Sq Feet 2 bedroom with 25% of the principle paid off in 6 years of ownership. I lost my job pure and simple and there were no new jobs to be had. I talked to a guy at a gas station who looked for two years and had that job and was happy.
I understand his argument but Rick should live in a car for a while.
As i see it, the most egregious wrongs done to the collective have been by the Politicians, The Fed & the Treasury. They are "literally" robbing F-in Trillions of dollars from all of us under the guise of "saving us from deflation".
The Fed doesn't answer the Bloomberg lawsuit pertaining to Trillions of dollars of our money being put on the line. Where is the "Tea Party" for that one.
There will be an uprising, soon enough, when the average man loses his retirement due to a debased currency. Thats when the Tea will really be thrown into the harbor.
Rick S. talks about "healing" as does Obama; some folks out there say that these criminals who literally bankrupted our country deserve punishment.
On Feb 20 07:30 AM doc_Hawkins wrote:
> I see some of Ricks comments but the vast majority of homeowners
> are loosing their houses due to lack of work and medical emergencies.
>
>
> Rick should view the same experience Jim Cramer had by living in
> a car or he should have my experience in 85 where I got a house foreclosed
> on and it was 800 Sq Feet 2 bedroom with 25% of the principle paid
> off in 6 years of ownership. I lost my job pure and simple and there
> were no new jobs to be had. I talked to a guy at a gas station who
> looked for two years and had that job and was happy.
>
> I understand his argument but Rick should live in a car for a while.
Now "Same Old" would be great if it was applied to the Present but its not. It is Backloaded. It is geared to future elections.
I only hope the Economy survives this "Change".
PS. Its not about the Fed, The Stimulus Package is Srictly in The Hands of the Treasury and the Current Administration.
You Cannot undo the past, the Future is what matters.
The sum of every econ analyst's monolog is "the markets need to know where we are heading"..... Translation - I don't know what I am doing and I am afraid.
Get with the program here are some tips
Bonds = bad
Gas stocks = good
Big banks = bad
Electric infrastructure construction = good
Trading houses = bad
Concrete = good
Media = bad
Catepillar = good
White collar = sorry guys
Blue collar = lets roll up our sleeves people we gotta pull this wagon outta da ditch!
The Analyst, the Rat and Nirvana
Here is the jist of a long term study. The nub of it is that predictions from the psuedo scientists (economists, social scientists, physochologists etc.) barely beat random choices over the period of the trial . No surprise there. But the best was where they pitted 3 analysts against a rat in a speed maze test.
Background;- maze tests are often used to test the behaviour and intelligence of animals.
In the maze, a series of left-right choices lead eventually to a dead end. Only one dead end is designated the goal ( power, wealth, nirvana,fame ,peace of mind, piece of ass, piece of cheese - whatever )
There is always a critcal decision point where one choice leads to many others -all failures, and the other leads to many others , one of which leads to success.
(Begining to sound like Life?)
Hundreds of maze runs were staged with the rat in a physical maze and the analysts on screen presentations mimicing the same choices and outcomes.
The study moved the goal between two of the end points with a 60%/40 biass on one of them.
After a while, the rat saw better chances on the 60% side and pulled ahead.
The analysts failed to spot this trend and persisted in a tendency to select the one which had not been succesful lately.
So if you want help with your investments , find a REAL rat.
However, I plead everyone to look at the bigger problem, understand the scale of the problem.
I hope by now, everyone realize this has now become a triple circular negative spiral.
Spiral A:
1. Jobs are lost
2. Product Sales go down
3. Companies retrentch
4. Jobs are lost.
Spiral B:
1. Jobs are lost
1. Home sales & prices go down
2. Bank balance sheet goes down
3. Credit dries up further
4. Home sales & prices go down
5. (Home related) Jobs are lost
Spiral C:
1. Credit dries up further
2. Companies retrench
3. Jobs are lost
4. Sales plunge
5. Companies balance sheet weakens
6. Credit dries up further
This is no longer a simple case of a price correction anymore. It has legs. it can reinforce on its own. This is what's feared as the deflationary spiral.
I understand that Obama's attempt seems unfair, moral hazard, too small, (insert your complaint).
But you *have to* realize, this spiral *IS REINFORCING* and can run to ruinous results for everyone! Mark my words, nobody is immune, even renters and job holders on supposedly "immune" industry, goldbugs and even if you're off the grid and have your own food and bomb shelter, you are not immune!
So judge and complain if you will, but until you get what I said, you're not understanding the magnitude of this crisis.
One thing Obama said is true. Doing nothing is not an option.
This can absolutely spiral down for a long ways. What is the absolute floor you ask me? The absolute floor is when everyone have nothing to lose. Think back to WW 2 era; or how everyone owns nothing in GD. That's the "floor" where the spiral stops naturally.
Think about this next time you wish for the spiral to resolve on it's own. Be careful what you wish for, for you may get it anyway. Any actions may prove futile anyhow.
A lot of people still think this is a regular recession and there will be cyclical bounce and rebound. An almost cult like subscription to "there is a rebound" idea. Which is why the best action is to sit back and let it resolve on its own... I'm sad that this train of thought reveals that these people do not realize the depth of this rabbit hole.
I know the anger at the irresponsible people who caused the problem. I am angry! But that time is past. These "first line" irresponsible action has now ignited the big fire of devastation. Undoing that irresponsibility won't bring things back. Trying to punish, for morality, justice or any other reason won't stop the spiral. Looking at how to stop the spiral is what we all must do.
I don't know if the anything *CAN* be done to prevent this down crash, if everything we do will be futile, but "doing nothing is not an option" is indeed the correct philosophy to deal with such devastation.
I find it hard to believe that's where he is targeting. If that's what he wants, there's no reason to put fixed rate or 105% LTV limits, or any limits at all.
In any NATIONAL policy writing, it's akin to casting a wide net to fish, it's impossible to be very precise. To shoot for perfection is to ask for paralysis. Will his policy bail out some irresponsible??? Sure. But look at the way he's targeting it and it doesn't sound like that's the intent.
Plus, it's a stick and carrot. The cramdown is very good. For people who claim the plan is a bank bailout. The cramdown should shut them up. It punishes the banks severely. In fact, it's "trickle up mark to market", *EXACTLY* what wall street fears and what the traders don't want.
The "mark to market" part forces loans on books, after cramdown, to reflect reality instead of holding some fantasy levels. It seems bad to reward the people in bankruptcy, but that's a boat beyond saving now. The cramdown will increase prudence and self restraint on future mortgage brokers, which will help us prevent a repeat of this history.
*ANY* attempt to stabilize things will involve people on the brink of foreclosure at any point in time in this whole collapse, until nobody has any job and nobody owns any houses. If we wait until then to act for reasons of moral hazard, god help us.
Tanta from CalculatedRisk wrote on cramdowns better than I could:
"I am fully in favor of removing restrictions on modifications of mortgage loans in Chapter 13, but not necessarily because that helps current borrowers out of a jam. I'm in favor of it because I think it will be part of a range of regulatory and legal changes that will help prevent future borrowers from getting into a lot of jams, which is to say that it will, contra MBA, actually help "stabilize" the residential mortgage market in the long term. Any industry that wants special treatment under the law because of the socially vital nature of its services needs to offer socially viable services, and since the industry has displayed no ability or willingness to quit partying on its own, then treat it like any other partier under BK law"
We have ongoing clumsy efforts by people who are and have been in charge, mostly, who seem not to have given any of this much thought in advance. The leaders who have never had more wealth and privilege vis a vis the rest of us in history.
We have been delivered into a surreal and dangerous world. The mistakes made by common people would not have undermined the whole planet but for the systems devised by the leadership to extend and leverage bad loans and bad bets.
Maybe we can have an election that shows serious turnover for a change.
Until we fix the CDS problem there will be NO END.
So the Wall Street banks, through greed and deceit, (and with the help of the governments intentional lack of oversight) orchestrated their own demise. And the first time, "little guy" home buyer, who put 20% down to own his house, has now lost all his equity and is paying down a mortgage which is worth more than his house. In effect, he is bailing out the bank that lent him the money, even though that same bank's actions caused him to lose his equity investment in his house. Why should the bank that caused the problem get away free, while the home owner that bought in good faith gets screwed. The governments job is to protect it's citizens, not its corporate criminals. And Santelli has the nerve to call these first time small homeowners (of which I am one), LOSERS.
And what makes Santelli thinks he is such a "winner". He works every day at the CBOE, which is nothing but a huge gambling pit. His work adds very little to the bettering of the moral structure of America. He doesn't save lives, or educate our young people, or work with his hands to build things that improve our way of life. He is nothing more than a high class gambler. And he has the nerve to call a hard working citizen, who got flim flammed by the big money boys from Wall Street, a loser. Santelli is a symptom of the problem our country faces today. Too many uninformed pundits with tunnel vision, speaking way outside their area of expertise, and then given credibility by sensationalistic media coverage.
I wonder how many of Santelli's trading buddies were house flippers from 2002-2007?
Lack of medical coverage is what wiped us out and killed my father, and that is the only help I would ever think about considering giving.
But Santelli does not need to suffer through that, because he is already mostly correct about the least deserving getting the rewards.
On Feb 20 07:30 AM doc_Hawkins wrote:
> I see some of Ricks comments but the vast majority of homeowners
> are loosing their houses due to lack of work and medical emergencies.
>
> Rick should view the same experience Jim Cramer had by living in
> a car or he should have my experience in 85 where I got a house foreclosed
> on and it was 800 Sq Feet 2 bedroom with 25% of the principle paid
> off in 6 years of ownership. I lost my job pure and simple and there
> were no new jobs to be had. I talked to a guy at a gas station who
> looked for two years and had that job and was happy.
>
> I understand his argument but Rick should live in a car for a while.
If you want to know what's coming, look up on the Argentinian financial collapse of 1998-2000 on Wikipedia. It's all there, although on a smaller scale. Same real estate collapse, financial collpase, etc. As right-wingers love to quote Santana when it suits them, "those who do not heed the lessons of history," etc., etc.....
www.streetinsider.com/...
Instead of saying, "what's in it for me," people need to stop being so selfish and instead ask, "what can we do to help our country?" Pitch in and be a helper instead of a whiner.
There are three ways to stop the downward spiral - give people money that they will spend into the economy, reduce costs for businesses (lower corp. taxes) or generate jobs. Paying people's mortgages is just doing the first option in a really unfair way.
On Feb 20 10:23 AM Consider_this wrote:
> I agree with rewarding the hardworking and not the irresponsible.
>
>
> However, I plead everyone to look at the bigger problem, understand
> the scale of the problem.
>
> I hope by now, everyone realize this has now become a triple circular
> negative spiral.
>
> Spiral A:
> 1. Jobs are lost
> 2. Product Sales go down
> 3. Companies retrentch
> 4. Jobs are lost.
>
> Spiral B:
> 1. Jobs are lost
> 1. Home sales & prices go down
> 2. Bank balance sheet goes down
> 3. Credit dries up further
> 4. Home sales & prices go down
> 5. (Home related) Jobs are lost
>
> Spiral C:
> 1. Credit dries up further
> 2. Companies retrench
> 3. Jobs are lost
> 4. Sales plunge
> 5. Companies balance sheet weakens
> 6. Credit dries up further
>
> This is no longer a simple case of a price correction anymore. It
> has legs. it can reinforce on its own. This is what's feared as the
> deflationary spiral.
>
> I understand that Obama's attempt seems unfair, moral hazard, too
> small, (insert your complaint).
>
> But you *have to* realize, this spiral *IS REINFORCING* and can run
> to ruinous results for everyone! Mark my words, nobody is immune,
> even renters and job holders on supposedly "immune" industry, goldbugs
> and even if you're off the grid and have your own food and bomb shelter,
> you are not immune!
>
> So judge and complain if you will, but until you get what I said,
> you're not understanding the magnitude of this crisis.
>
> One thing Obama said is true. Doing nothing is not an option.
>
> This can absolutely spiral down for a long ways. What is the absolute
> floor you ask me? The absolute floor is when everyone have nothing
> to lose. Think back to WW 2 era; or how everyone owns nothing in
> GD. That's the "floor" where the spiral stops naturally.
>
> Think about this next time you wish for the spiral to resolve on
> it's own. Be careful what you wish for, for you may get it anyway.
> Any actions may prove futile anyhow.
>
> A lot of people still think this is a regular recession and there
> will be cyclical bounce and rebound. An almost cult like subscription
> to "there is a rebound" idea. Which is why the best action is to
> sit back and let it resolve on its own... I'm sad that this train
> of thought reveals that these people do not realize the depth of
> this rabbit hole.
>
> I know the anger at the irresponsible people who caused the problem.
> I am angry! But that time is past. These "first line" irresponsible
> action has now ignited the big fire of devastation. Undoing that
> irresponsibility won't bring things back. Trying to punish, for morality,
> justice or any other reason won't stop the spiral. Looking at how
> to stop the spiral is what we all must do.
>
> I don't know if the anything *CAN* be done to prevent this down crash,
> if everything we do will be futile, but "doing nothing is not an
> option" is indeed the correct philosophy to deal with such devastation.
Your irresponsible neighbor's foreclosure will drop your house's value by 10% immediately and more later as there are more on your block. Choose your poison: moral hazard or financial hazard.
Rising unemployment will drop rents and rental yields until yields are T-bonds + 5% or more. Santelli has a point, but it's economically, and in terms of keeping the political and social order from going over a precipice, beside the point. Emotionally satisfying in its moral superiority, but financially meaningless to those who own real estate near foreclosed houses. Dumb buyers sold the rest of us a naked put on their houses because we deregulated the mortgage and banking industries and let Bush & Co. eviscerate the regulatory agencies and enforcement. Santelli is getting angry at the wrong people.
Any way you supporters of this try to slice it, there's a more compelling argument the other way. Stop wasting oxygen and bytes trying to defend this junk and think through the logic of it. I guarantee you'll reach the correct conclusion then, which is basically saying that once you've thought it all through, in a comprehensive manner, you'll agree with Santelli. If you don't, that's just your own cognitive limitations showing and you probably shouldn't be expressing an opinion on anything more complex than whether you want the blue car or the red car.
On Feb 20 12:33 PM turnkeusa wrote:
> The caddy won't get govt money since he's not living in the condos.
>
> Your irresponsible neighbor's foreclosure will drop your house's
> value by 10% immediately and more later as there are more on your
> block. Choose your poison: moral hazard or financial hazard.
> Rising unemployment will drop rents and rental yields until yields
> are T-bonds + 5% or more. Santelli has a point, but it's economically,
> and in terms of keeping the political and social order from going
> over a precipice, beside the point. Emotionally satisfying in its
> moral superiority, but financially meaningless to those who own real
> estate near foreclosed houses. Dumb buyers sold the rest of us a
> naked put on their houses because we deregulated the mortgage and
> banking industries and let Bush & Co. eviscerate the regulatory
> agencies and enforcement. Santelli is getting angry at the wrong
> people.
You are exactly right, turnkeusa. Bush administration said, go ahead and write no doc loans, business always knows best. Then the financial mega-industry, which Santelli is part of, exploits the lack of enforcement to make fees from flipping bad mortgage paper. Bush and Wall Street take the blame in my book.
On Feb 20 12:33 PM turnkeusa wrote:
> near foreclosed houses. Dumb buyers sold the rest of us a naked
> put on their houses because we deregulated the mortgage and banking
> industries and let Bush & eviscerate the regulatory agencies
> and enforcement. Santelli is getting angry at the wrong people.
1. Stimulus bill 2x the size
2. Nationalize the banks
3. Forcefully write down the principal on mortgages
When you make economics into a morality play, instead of a technical exercise, bad things happen.
The stimulus bill is already forecasted to crowd out future investment, thus reducing future economic opportunities. Why are you so ready to sacrifice the future for the present?
Nationalizing the banks, what's the exit strategy? Who's going to want to put private capital into the banks if they can be shafted by future administrations?
Who's going to want to be a lender in the future if the government can just rewrite contracts?
All of you guys are so oriented toward the present-tense it isn't even funny. And you guys complain that Wall Street was short-term oriented. Ha, you don't even realize any of the future implications of what you're recommending or you just don't care, apparently. It's like arguing with a five-year old who can't wait for Christmas but just has to have his presents NOW!
On Feb 20 01:00 PM Machiavelli999 wrote:
> Guys like Rick Santelli are the reason why the Obama administration
> is afraid to take the necessary steps to get out of this crisis<br/>
>
> 1. Stimulus bill 2x the size
>
> 2. Nationalize the banks
>
> 3. Forcefully write down the principal on mortgages
>
> When you make economics into a morality play, instead of a technical
> exercise, bad things happen.
Most people who are in foreclosure have done nothing wrong. No one takes out a mortgage thinking he or she has a good chance of defaulting. People lose their jobs, get sick, suffer financial reverses beyond their control.
Those like Santelli who think it is against their self-interests for the government to step in and help out just show their inability to sympathize with people who suffer reverses or get into financial trouble. All those guys who clapped and "amen"-ed Santelli will surely feel differently once their own jobs are cut.
www.mediacircus.com/20.../
On Feb 20 12:12 PM Elliott wrote:
> I call bullsh1+. This is just trying to shift the blame for the
> economic mess from Repubs -- who created it -- to Obama. We've already
> had our tea party in November. Obama won, get over it.
Perhaps I am not seeing things correctly and Mr. Santorelli was going pure stream of consciousness. The bottom line is that I am, like most of us, genuinely furious that the government is misusing my tax dollars trying to prop up a market which would be better off left to fall to it's correct level. Whether of not Mr. Santorelli's comments were scripted or not is a moot point.
You wanna talk morality? Last time I checked, THEFT is immoral -- and that's what socialism is. Infanticide is immoral, and that's what Obama voted for 4 times as an IL state Senator -- opposing the Born-Alive Infants Protection Act. Such "moral fiber" leads to dire consequences!!!
On Feb 20 01:00 PM Machiavelli999 wrote:
> Guys like Rick Santelli are the reason why the Obama administration
> is afraid to take the necessary steps to get out of this crisis<br/>
>
> 1. Stimulus bill 2x the size
>
> 2. Nationalize the banks
>
> 3. Forcefully write down the principal on mortgages
>
> When you make economics into a morality play, instead of a technical
> exercise, bad things happen.
Every day of life it's easy to have a "there but for the grace of God go I" moment, but turning that into economic policy is madness.
On Feb 20 01:28 PM Roberto Antonio Hussein wrote:
> I found Santelli's rant to be mean sprited and representative of
> the stunted outlook of most Republicans.
> Most people who are in foreclosure have done nothing wrong. No one
> takes out a mortgage thinking he or she has a good chance of defaulting.
> People lose their jobs, get sick, suffer financial reverses beyond
> their control.
> Those like Santelli who think it is against their self-interests
> for the government to step in and help out just show their inability
> to sympathize with people who suffer reverses or get into financial
> trouble. All those guys who clapped and "amen"-ed Santelli will surely
> feel differently once their own jobs are cut.
So he rants against the mortgage modification program, but says nothing about taxpayers underwriting the risk his hedge fund friends are taking on "toxic assets"; the very investment vehicles that Santelli helped create!
Nice. Yeah, he speaks for the "common man". Before people gush like giddy schoolgirls over his outburst, know the source.
Once the GSE's gained power a false bottom was created as they became a guaranteed buyer of crap mortgages.
www.boston.com/bostong.../
On Feb 20 12:55 PM Elliott wrote:
>
> You are exactly right, turnkeusa. Bush administration said, go ahead
> and write no doc loans, business always knows best. Then the financial
> mega-industry, which Santelli is part of, exploits the lack of enforcement
> to make fees from flipping bad mortgage paper. Bush and Wall Street
> take the blame in my book.
>
> On Feb 20 12:33 PM turnkeusa wrote:
query.nytimes.com/gst/...
On Feb 20 01:25 PM paulvard wrote:
> Santelli and all his CNBC cohorts represents all these greedy, (how
> about me) people, traders that were part and parcels of the failed
> decade. They are still there in CNBC whining all day under the guise
> of free market enterprise. What's really free about this market when
> the buy and hold common folks savings have been wiped out by the
> rapid fire naked shorting of equities allowed by the SEC. Common
> people has no chance or good companies in distress. For a change
> it's funny to see these people groan because they have jumbo loans
> for 2-3 mansions and Obama is not there to help. They may have to
> shell out all these ill-gotten gains to pay for these houses.
Santelli sounds like a fool.
The foreclosure crisis is so great that here in Florida, properties are becoming blights, and community associations are going bankrupt, causing further blights.
Get a grip and think about this. Santelli dittoheads are not thinking this through.
For the record, I recently paid DOWN my mortgage, and have a great, fixed, 15 year mortgage and more than 50% equity, even now. I do not want my neighbors to go into foreclosure and if Santelli had any brains, he wouldn't either.
On Feb 20 05:49 AM andrew c wrote:
> Thanks for your article about this. I've reposted it on facebook,
> with a link, along with my commentary:
>
> Yesterday, a single voice expressed the anger of millions.
>
> For some reason, finally, it caught the attention of the "mainstream
> media." I wonder if it'll catch the attention of policy makers. One
> can only hope.
>
> It's sad that a single celebrity can do more than millions of citizens,
> but I guess that's our reality: back in 2008 when the Leave No Banker
> Behind Bailout (seekingalpha.com/symbo...) was passed,
> calls, faxes and letters to Congressional offices were 50-1 against
> it in most districts, as much as 300-1 against it in some.
>
> Regardless that the message should've sunk in sooner with "those
> who matter," at least it's finally getting through to them. Thanks
> for that Rick.
This is what I meant - this writer is not thinking the problem through. I live within my means, as well. In fact, I have 50%+ equity in my home, even after seeing the value tank like a rock, in Florida. I do NOT want to see my neighbors going into foreclosure, not because I am morally righteous but because it would be harmful for all of us.
I just want to know where the outrage was when the banks (and their CEOS) were bailed out? That's ok but helping homeowners - many of whom were victims of deceptive mortgage practices - is not?
Look, I am an attorney that does foreclosures. It pays the bills. And I STILL would like to see Obama's foreclosure plan.
It is bad public policy to NOT do something about foreclosures. States are also trying to stem the torrent - certainly the Florida legislature is.. It is not just the feds. The foreclosure rate is a crisis.
Santelli does not know what he is talking about.
Those of you who listen to him should step back and think about it.
On Feb 20 01:03 PM valueinvestor123 wrote:
> As someone who has always lived within their means, this idea of
> bailing out homewoners disgusts me. I don't remember when owning
> a home became a right guaranteed by the Constitution. If people can't
> afford their homes, I say foreclose on them and let people who can
> afford the mortgage move in. Let those who lose their homes move
> into apartments, trailers, or onto the street. I would rather pay
> their welfare payments than home payments.
"I also think it’s extremely important for people who rant on cable television to be responsible and understand what they’re talking about,’’ he said. “I feel assured that Mr. Santelli doesn’t understand what he’s talking about.’’ (thecaucus.blogs.nytime.../)
Where does a hedge fund derivatives trader get off complaining about "breaking contracts?" He created and sold those same contracts that are sucking the life out of the market. They are a flawed product. If they were a car, there would be a mass recall. People would be suing over the defects.
It is the Santelli's of the world who created this mortgage mess. He's a pusher blaming the addict. Last I looked, laws put pushers behind bars for much, much longer than the addicts.
Now he stands in line to profit from the taxpayer as the latter underwrite a massive PPP"market" solution to the very same assets he was responsible for.
Santelli is more than a fool; he's a hypocrite.
I'm strongly opposed to any deadbeat bail out. In fact any borrower who lied about income should be held accountable for entering into a contract under false pretenses.
I think the issue of the mortgage deduction should be re-examined. Why do the majority of people (outright owners and renters) subsidize the mortgage payer with lower taxes because of mortgage deductions. Why do smokers get singled out for higher taxes? I'm not fat. Should I get a deduction?
On Feb 20 01:51 PM Aristophanes wrote:
> Santelli was one of the architects of mortgage backed securities.
> He has zero credibility because as a hedge fund advisor, he stands
> to profit from the $1 trillion taxpayer underwriting being proposed
> as well by the Obama Administration.
>
> So he rants against the mortgage modification program, but says nothing
> about taxpayers underwriting the risk his hedge fund friends are
> taking on "toxic assets"; the very investment vehicles that Santelli
> helped create!
>
> Nice. Yeah, he speaks for the "common man". Before people gush like
> giddy schoolgirls over his outburst, know the source.
On Feb 20 01:51 PM Aristophanes wrote:
> Santelli was one of the architects of mortgage backed securities.
> He has zero credibility because as a hedge fund advisor, he stands
> to profit from the $1 trillion taxpayer underwriting being proposed
> as well by the Obama Administration.
>
> So he rants against the mortgage modification program, but says nothing
> about taxpayers underwriting the risk his hedge fund friends are
> taking on "toxic assets"; the very investment vehicles that Santelli
> helped create!
>
> Nice. Yeah, he speaks for the "common man". Before people gush like
> giddy schoolgirls over his outburst, know the source.
No amount of meddling by the government is going to change that basic fact of life.
Rather then try and bail out the banks and people who have no hope of ever paying, reward those who have paid on time and lived within their means.
There will be casualties but there always is and simply having some of us pay for mistakes by others is not going to change anything.
Let the banks take the losses and burn the houses to help prop up those homes that are paid on time.
Bob
The CNBC folks -who in a way are in fact all quite likeable- should realize that CNBC is now watched around the world and not only in the U.S.A.
Though I suppose they wouldn't really care much if they made Americans look like a bunch of screaming turkeys with their heads half cut off. (but some of us who live abroad, do.... and so what should we do....switch to Fox?)....
Honesty and integrity back to financial dealings and markets.... and sanity and decorum back to the media? Maybe it's just too much to ask for.
This is nothing short of people being jealous or envious of some people (albeit undeserving) getting something for nothing.
However it's ok for the priveledged to profit handsomely investing extra money that others don't have and then have the gall to tell them they should have studied harder in school or pull themselves up by their bootstraps and get better employement.
The anger expressed is pure hogwash and when they complain they don't want their taxdollars used in this fashion is again hogwash as if somehow they have a say in how THEIR taxdollars are used. No one is going to get one dime back from their taxes if the govt doesn't intervene and if the govt doesn't spend the money here they will find somewhere else to spend it . Why don't you ask Santelli what his opinion is of the US bombing Iraq into the ground destroying the infrastructure and then using the taxpayer to build it back up? What were we spending in Iraq per year anyway? 500 billion dollars a year? Now we are so upset at spending 700 billion on our own people! Give me a break.
If they rationally default and there is a foreclosure, the dearth of buyers drives down everyone else's property values, leading to more rational defaults.
You then have the unintended consequence of the people who hang on and keep paying their mortgage being the ultimate losers. As in poker, walking away with some chips is better than losing the all and being hock to the loan shark.
The Obama program seems squarely aimed at preventing rational defaults. Whether it works or not is hard to say. I suspect in some areas of the Imperial Valley or Phoenix it will be useless, but other areas and neighbourhoods like in Portland (where I was recently) will see some success at putting an early bottom to the foreclosure rate. I predict very modest success.
On Feb 21 07:15 AM SmBlkBob wrote:
> The fact is that many of the homes are going to be foreclosed on
> no matter what. Simply put, if you don't have money, you can't pay.
>
> No amount of meddling by the government is going to change that basic
> fact of life.
>
> Rather then try and bail out the banks and people who have no hope
> of ever paying, reward those who have paid on time and lived within
> their means.
>
> There will be casualties but there always is and simply having some
> of us pay for mistakes by others is not going to change anything.
>
>
> Let the banks take the losses and burn the houses to help prop up
> those homes that are paid on time.
>
> Bob
Let's look to history:
In the 30s, balloon mortgages were being foreclosed at 1,000 a day. The feds (see HOLC) granted long term mortgages to over a million people facing the loss of their homes. When HOLC was finally liquidated in 1948, it showed a net profit of $11,000,000. HOLC kept more than 80% of those people in their homes.
On Feb 21 07:15 AM SmBlkBob wrote:
> The fact is that many of the homes are going to be foreclosed on
> no matter what. Simply put, if you don't have money, you can't pay.
>
> No amount of meddling by the government is going to change that basic
> fact of life.
>
> Rather then try and bail out the banks and people who have no hope
> of ever paying, reward those who have paid on time and lived within
> their means.
>
> There will be casualties but there always is and simply having some
> of us pay for mistakes by others is not going to change anything.
>
>
> Let the banks take the losses and burn the houses to help prop up
> those homes that are paid on time.
>
> Bob
On Feb 20 07:30 AM doc_Hawkins wrote:
> I see some of Ricks comments but the vast majority of homeowners
> are loosing their houses due to lack of work and medical emergencies.
>
>
> Rick should view the same experience Jim Cramer had by living in
> a car or he should have my experience in 85 where I got a house foreclosed
> on and it was 800 Sq Feet 2 bedroom with 25% of the principle paid
> off in 6 years of ownership. I lost my job pure and simple and there
> were no new jobs to be had. I talked to a guy at a gas station who
> looked for two years and had that job and was happy.
>
> I understand his argument but Rick should live in a car for a while.
Regulators (by permitting gigantic mortgage-back securities leverage) combined to greedy bankers (according “stupid” loans KNOWING they would punt the problem through derivatives) IS IN FACT the reason it happened this time. Here, in Canada, our regulations and banking rules would do not allow for such a fiasco… Are Canadians less stupid than Americans? I don’t think so! We were just good at protecting “stupid” people from other “stupid” people. That’s all!
So Rick, let’s face it, EVERYBODY was “stupid” for letting these absurd regulations, policies and business behaviors take place. Yes, your neighbor is “stupid”. What surprises me is that you (and all the intelligent people in America) don’t already know that! If you knew, all this chaos would have never happen. Just like us.
wdhalgren ---
My guess is that history will record that "high skewness" on EITHER "personal responsibility of capitalism" OR "risk pooling of collectivism" have been proven wrong!
had his background checked, went to talk to his neighbors, co-workers etc) Obama should help everyone out.
So Santelli has been consistent, and this "rant" was right on target.
No regulations are good? Does the name Phil Gramm resonate with you? Individuals admitting they didn't understand the investments. Greenspan saying nationalization is necessary. You are defending something you have no reason to.
And...
ECONOMY -- FORMER HOUSING CEOS: POOR PEOPLE DID NOT CAUSE CURRENT FINANCIAL CRISIS: Yesterday, four former CEOs of Fannie Mae and Freddie Mac testified on how their companies' actions may have "contributed to the ongoing crisis." Blaming Fannie, Freddie, the Community Reinvestment Act (CRA), and low-income people is one of conservatives' favorite talking points, as The Progress Report has documented. But at the beginning of the hearing, Chairman Henry Waxman (D-CA) said that 400,000 documents amassed by the committee showed that the right-wing claim is nothing more than a myth. Furthermore, later in the hearing, Rep. Edolphus Towns (D-NY) asked the CEOs whether poor people caused the current financial crisis. All said "no." Congress passed the Community Reinvestment Act in 1977, requiring banks "to lend throughout the communities they serve." In the 1990s, greater mortgage lending to lower-income households by CRA-covered banks increased the homeownership rate for lower-income and minority families. As the Center for American Progress's Tim Westrich has written, "The real culprits in the mortgage mess are non-bank mortgage companies -- not covered by CRA -- that originated the lion's share of bad mortgages at the heart of the crisis. They made an estimated 50 percent of subprime loans in 2005.
On Feb 20 07:31 AM wdhalgren wrote:
> This is essentially a debate about the personal responsibility of
> capitalism versus the risk pooling of collectivism. In the end, socialism
> always fails for the same reason, disincentives to act financially
> responsible. Amazingly, we've decided to run another test case to
> see if 21st century technology and modern liberalism can create an
> effective iteration of this failed economic model. I hope that history
> will accurately record that free markets were not the cause of our
> demise.
On Feb 20 10:40 AM Beach Bubba wrote:
> What a crock....ie, doing nothing is not an option. It is the only
> option; turn it all over to the markets and we will be out of it
> all in a few months (or sooner)...That is not saying shit will not
> hit the fan. If you can't handle it, shoot yourself or jump off the
> f'ng B' bridge.
On Feb 20 11:00 AM Da_Bronx_Guy wrote:
> Living beyond one's income, spending like tommorrow bills will never
> come, entitled to part of the American apple pie no matter what.
> Am I my brother's keeper? The American taxpayer better wait up to
> the fact that someone has to pay for BAD behavior.
On Feb 20 11:35 AM keyboardsteve wrote:
> Santelli is a hot head and his comments, although great copy, are
> simple minded and insensitive. There are plenty of people out there
> who were able to buy their first home in 2001- 2003 and has no aspirations
> of becoming rich by flipping houses. They just felt that they finally
> could have a part of the American dream..home ownership with a slow
> continuing growth in equity. But wall street had different intentions.
> They saw an opportunity to make tons of money by bundling these new
> mortgages and then deceiving the people who bought these new "investment
> vehicles" with falsified ratings. Every broker down the line was
> responsible for this collapse..the bundlers of mortgages, the sellers
> of these products, the rating agents. These "Wall Street" people
> orchestrated this financial disaster, not the little guy who got
> to own his own 2 bedroom 1 bath house for the first time in his life.
>
> So the Wall Street banks, through greed and deceit, (and with the
> help of the governments intentional lack of oversight) orchestrated
> their own demise. And the first time, "little guy" home buyer, who
> put 20% down to own his house, has now lost all his equity and is
> paying down a mortgage which is worth more than his house. In effect,
> he is bailing out the bank that lent him the money, even though that
> same bank's actions caused him to lose his equity investment in his
> house. Why should the bank that caused the problem get away free,
> while the home owner that bought in good faith gets screwed. The
> governments job is to protect it's citizens, not its corporate criminals.
> And Santelli has the nerve to call these first time small homeowners
> (of which I am one), LOSERS.
> And what makes Santelli thinks he is such a "winner". He works every
> day at the CBOE, which is nothing but a huge gambling pit. His work
> adds very little to the bettering of the moral structure of America.
> He doesn't save lives, or educate our young people, or work with
> his hands to build things that improve our way of life. He is nothing
> more than a high class gambler. And he has the nerve to call a hard
> working citizen, who got flim flammed by the big money boys from
> Wall Street, a loser. Santelli is a symptom of the problem our country
> faces today. Too many uninformed pundits with tunnel vision, speaking
> way outside their area of expertise, and then given credibility by
> sensationalistic media coverage.
> I wonder how many of Santelli's trading buddies were house flippers
> from 2002-2007?
>
>
>
>
On Feb 20 01:03 PM valueinvestor123 wrote:
> As someone who has always lived within their means, this idea of
> bailing out homewoners disgusts me. I don't remember when owning
> a home became a right guaranteed by the Constitution. If people can't
> afford their homes, I say foreclose on them and let people who can
> afford the mortgage move in. Let those who lose their homes move
> into apartments, trailers, or onto the street. I would rather pay
> their welfare payments than home payments.
What political party has been in power for most of the last 25 years. Oh right, I forgot, nothing is ever the responsibity of the repubs. Regulation is always bad, dems are always bad, the wealthy should always have unlimited power, government is always at fault, helping people is always bad for any reason - I got mine, you get yours; and if you can't it's your fault.
That kool-aid is great!
On Feb 20 01:29 PM Socialism cannot compete! wrote:
> Democrats and their Marxist housing created this mess!! What happened
> in November was that the people bought the Dems' lies.
>
> www.mediacircus.com/20.../
>
>
Don't call the fire dept or police if you have a problem. If you're a vet and get sick. F you. By the way you probably like the wars. Do you care about THOSE vets. Guess not. Elderly - better work until you die - no money for you. You can live on the street for FREE!
Idiot.
On Feb 20 01:33 PM Socialism cannot compete! wrote:
> Bull CRAP. Economics IS a morality play -- those who work hard reap
> the rewards -- until now!!! THAT is why we are tanking: the upsetting
> of the moral base underpinning our economy. Examples? Community Reinvestment
> Act, Social Security, Medicare, and any other Socialist "entitlement"!!
> There is NO FREE LUNCH in life -- making others' pay for your house,
> your health care, your ANYTHING, is an attempt to contradict basic
> economics and CAUSES FAILURE of the system...just like now.
>
> You wanna talk morality? Last time I checked, THEFT is immoral --
> and that's what socialism is. Infanticide is immoral, and that's
> what Obama voted for 4 times as an IL state Senator -- opposing the
> Born-Alive Infants Protection Act. Such "moral fiber" leads to dire
> consequences!!!
>
> On Feb 20 01:00 PM Machiavelli999 wrote:
On Feb 20 08:55 PM Jugheadjack wrote:
> It's about time the housing fiasco collapsed. Let it go. I own my
> house outright and realize it's overvalued. I bought it for retirement
> not capital gain.
> I'm strongly opposed to any deadbeat bail out. In fact any borrower
> who lied about income should be held accountable for entering into
> a contract under false pretenses.
> I think the issue of the mortgage deduction should be re-examined.
> Why do the majority of people (outright owners and renters) subsidize
> the mortgage payer with lower taxes because of mortgage deductions.
> Why do smokers get singled out for higher taxes? I'm not fat. Should
> I get a deduction?
On Feb 21 04:38 AM lex wrote:
> What Obama is doing is unethical....i worked hard for my money, bought
> my house within my means, why should I pay for the other guy who
> overspent??? Over the past few years I've been hearing people who
> bought this house with jacuzzis and an extra large yard, going on
> expensive vacations, buying luxury cars, watches and jewellry and
> I've been feeling like a 2nd class citizen because i didnt leverage
> myself to the hilt. Now these f*ckers have gone bust and I'm expected
> to bail them out???!!!!! Pleeez......
> PS. Its not about the Fed, The Stimulus Package is Srictly in The
> Hands of the Treasury and the Current Administration.
>
>
Bernanke is running his own stimulus plan in the trillions, truly amazing amounts of money, lifetimes of earnings of millions of people. He may end up one of the most influential people in US history.
On Feb 21 04:33 PM docwandphd wrote:
> Rick Santelli is a simple minded ignoramus....how about lets have
> the moron do a rant about the UNREGULATED GREEDHEADS operating under
> a laissez faire government policy toward credit default swaps and
> other derivatives! Those GREEDHEADS are the ones who destroyed the
> economy!
G
On Feb 20 07:31 AM wdhalgren wrote:
> This is essentially a debate about the personal responsibility of
> capitalism versus the risk pooling of collectivism. In the end,
> socialism always fails for the same reason, disincentives to act
> financially responsible. Amazingly, we've decided to run another
> test case to see if 21st century technology and modern liberalism
> can create an effective iteration of this failed economic model.
> I hope that history will accurately record that free markets were
> not the cause of our demise.
1) over 18
2) legaly competent at the time the signed the deal
3) legally & morally responsible for the mess they got themselves into
The stupid people that bought it. BTW, who is more greedy, the salesperson or the person buying the house that they really know they cannot afford.
in germany some freak wanted to be murdered and hooked up with someone who did the honors. does that mean the murderer should get off just because the counterparty was a concenting adult?
this righteous libertarian line is a little one-sided.
On Feb 21 09:12 PM mbbcat wrote:
> These idiot borrowers are (almost without exception)
> 1) over 18
> 2) legaly competent at the time the signed the deal
> 3) legally & morally responsible for the mess they got themselves
> into
The Obama administration has made a start on getting things in control - a necessary but not sufficient start. Thank goodness we've got someone with a bit of brains, a bit of courage, a bit of optimism and a lot of energy to lead right now.
It seems that this nation is overpopulated with well-heeled whiners. Perhaps we should revert to the tax code as it was under that great Republican, Dwight D. Eisenhower. That would keep them occupied enough to give the rest of us the time to turn this country around and clean up the mess that has been handed to us.
On Feb 20 10:23 AM Consider_this wrote:
> I agree with rewarding the hardworking and not the irresponsible.
>
>
> However, I plead everyone to look at the bigger problem, understand
> the scale of the problem.
>
> I hope by now, everyone realize this has now become a triple circular
> negative spiral.
>
> Spiral A:
> 1. Jobs are lost
> 2. Product Sales go down
> 3. Companies retrentch
> 4. Jobs are lost.
>
> Spiral B:
> 1. Jobs are lost
> 1. Home sales & prices go down
> 2. Bank balance sheet goes down
> 3. Credit dries up further
> 4. Home sales & prices go down
> 5. (Home related) Jobs are lost
>
> Spiral C:
> 1. Credit dries up further
> 2. Companies retrench
> 3. Jobs are lost
> 4. Sales plunge
> 5. Companies balance sheet weakens
> 6. Credit dries up further
>
> This is no longer a simple case of a price correction anymore. It
> has legs. it can reinforce on its own. This is what's feared as the
> deflationary spiral.
>
> I understand that Obama's attempt seems unfair, moral hazard, too
> small, (insert your complaint).
>
> But you *have to* realize, this spiral *IS REINFORCING* and can run
> to ruinous results for everyone! Mark my words, nobody is immune,
> even renters and job holders on supposedly "immune" industry, goldbugs
> and even if you're off the grid and have your own food and bomb shelter,
> you are not immune!
>
> So judge and complain if you will, but until you get what I said,
> you're not understanding the magnitude of this crisis.
>
> One thing Obama said is true. Doing nothing is not an option.
>
> This can absolutely spiral down for a long ways. What is the absolute
> floor you ask me? The absolute floor is when everyone have nothing
> to lose. Think back to WW 2 era; or how everyone owns nothing in
> GD. That's the "floor" where the spiral stops naturally.
>
> Think about this next time you wish for the spiral to resolve on
> it's own. Be careful what you wish for, for you may get it anyway.
> Any actions may prove futile anyhow.
>
> A lot of people still think this is a regular recession and there
> will be cyclical bounce and rebound. An almost cult like subscription
> to "there is a rebound" idea. Which is why the best action is to
> sit back and let it resolve on its own... I'm sad that this train
> of thought reveals that these people do not realize the depth of
> this rabbit hole.
>
> I know the anger at the irresponsible people who caused the problem.
> I am angry! But that time is past. These "first line" irresponsible
> action has now ignited the big fire of devastation. Undoing that
> irresponsibility won't bring things back. Trying to punish, for morality,
> justice or any other reason won't stop the spiral. Looking at how
> to stop the spiral is what we all must do.
>
> I don't know if the anything *CAN* be done to prevent this down crash,
> if everything we do will be futile, but "doing nothing is not an
> option" is indeed the correct philosophy to deal with such devastation.
B. Your grandchildren will stand a chance of having a decent job, owning a job and paying the taxes needed to pay for this rescue mission because this rescue mission was conducted.
C. Self-involved, unethical whiners created this mess and it would be just as well if they all stood back and let the rest of us clean it up so that their grandchildren won't hate them.
On Feb 21 04:38 AM lex wrote:
> What Obama is doing is unethical....i worked hard for my money, bought
> my house within my means, why should I pay for the other guy who
> overspent??? Over the past few years I've been hearing people who
> bought this house with jacuzzis and an extra large yard, going on
> expensive vacations, buying luxury cars, watches and jewellry and
> I've been feeling like a 2nd class citizen because i didnt leverage
> myself to the hilt. Now these f*ckers have gone bust and I'm expected
> to bail them out???!!!!! Pleeez......
1. The Clinton Administration.
2. Fannie Mae management who wanted to show exceptional profits in order to bolster their bonuses.
3. Fannie Mae shareholders.
4. Banks, Thrifts and Mortgage companies who wanted a chance to expand their markets.
One party to the problem was doing it for votes, the other five for money. However lets not lose sight of the fact that it was a combination of the securitization of loans and abysmal oversight of the banking industry by the Bush Administration that converted a scandal to a financial holocaust.
At the end of the day it was greed for money and power and a bankrupt ideology that did us in.
On Feb 20 03:15 PM halconnoche wrote:
> Red Light is right. Read the NY times article.
> query.nytimes.com/gst/...
On Feb 20 11:58 AM Trader11 wrote:
> Cramer Vs Santelli: Which Rant Was Better?
>
> www.streetinsider.com/...
This is a very bad, slippery slope. The end game for the US is unimaginable. At least the pres has drawn a line in the sand on the deficit, which should help him stop.
1. Consumer credit has not dried up but is still pretty strong.
2. Having Judges cram down loans (favorite Dem proposal) and any interest principle reduction as a part of the Obama plan hurts banks and re-enforces this spiral.
3. The current plan will make buying mortgages harder for first time homeowners which will the bottom that much lower. (via higher interest rates and fewer banks willing to right mortgages)
If you want to break this spiral lets start at the top and work on a plan that makes our businesses more competitive. Government only makes our jobs as business owners and entrepeneurs more difficult. Taking money from one group and giving it to another group only makes the situation worse. Once business can function more efficiently they will be more competitive in the global economy and will be able to hire again and break the cycle the correct way.
BTW, raising taxes on businesses which seems to be the next brilliant move from this administration will only make the problem worse. I am beginning to think the change Obama was talking about is turning a recession in to a depression.
On Feb 22 01:25 AM fgbouman wrote:
> This is the most rational and reasonable comment I've read so far.
> I've lived through several wars, several financial collapses in several
> countries and one revolution and none of them looked this bad. On
> a personal basis my house value has dropped thirty percent, my portfolio
> by the same and I don't even want to discuss my 401k. In previous
> financial catastrophes there were places to hide, but hiding places
> are few and far between this time around.
> The Obama administration has made a start on getting things in control
> - a necessary but not sufficient start. Thank goodness we've got
> someone with a bit of brains, a bit of courage, a bit of optimism
> and a lot of energy to lead right now.
> It seems that this nation is overpopulated with well-heeled whiners.
> Perhaps we should revert to the tax code as it was under that great
> Republican, Dwight D. Eisenhower. That would keep them occupied
> enough to give the rest of us the time to turn this country around
> and clean up the mess that has been handed to us.
>
You also make a legal faux pas. A legally competent person may not be competent enough to understand the context of a contract. Take a LIAR loan. Or an Alt-A. The responsibility is actually on the contract presenter to explain the terms. In most cases, they did not. This is systemic malfeasance. Legal competency does not preclude an imbalance in the contractual relationship.
So the moral issue for society at large is: Do we let many of these people unwind their mess and take their neighbours down with them? Or do we assist the ones who are underwater but still have an income, so we can put a floor under this thing sooner?
Tough choices. No clear, moral response. You can either do the entire free market Rick Santelli thing (I doubt he's suffering) and let the market hit bottom and go below with millions of homeowners suffering collateral damage as their values crater alongside their neighbours. Or you can try and pick the cases where there is a decent chance of survival and throw them a financial life buoy, with taxpayer dollars.
Either way, the derivatives trader and hedge fund analysts Santelli doesn't really care, so long as Washington uses taxpayer money to underwrite his $1 trillion dollar derivatives mess.
On Feb 21 09:12 PM mbbcat wrote:
> These idiot borrowers are (almost without exception)
> 1) over 18
> 2) legaly competent at the time the signed the deal
> 3) legally & morally responsible for the mess they got themselves
> into