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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction -- Ignore unavailable to you. Want to Upgrade?

To: J.B.C. who wrote (69664)	2/21/2009 12:14:04 AM
From: Sully-	Respond to of 90947

Thanks JBC! That was one great rant! :-)

To: J.B.C. who wrote (69664)	2/21/2009 1:48:36 AM
From: Sully-	Respond to of 90947

Obama’s Housing Plan By Mark Noonan on recession Blogs For Victory Larry Kudlow takes it to task: <<< Reporting from the Chicago commodity pits, my CNBC colleague Rick Santelli unleashed a torrent of criticism against this scheme. Santelli said: “Government is promoting bad behavior. . . . Do we really want to subsidize the losers’ mortgages? This is America! How many of you people want to pay for your neighbor’s mortgage? President Obama, are you listening? How about we all stop paying our mortgages! It’s a moral hazard.” All this took place on the air, to the cheers of traders. Santelli called for a new tea party in support of capitalism. He’s right. Obama’s so-called mortgage-rescue plan amounts to $275 billion in new debt that will have little if any lasting impact on deeply corrected housing prices or the mortgage-default problem that stemmed from the insistence of government to throw home loans at lower-income people. A modest reduction in mortgage rates will have little impact on home prices, as Harvard professor Ed Glaser has shown. And by the way, re-default rates on modified mortgages have been running 50 to 60 percent. This is not going to change. So why should we throw more good money after bad? >>> All very correct - but we do need to do something to deal with the fact that a lot of people who are maintaining their mortgages are now sitting on houses which have lost 50% of their value. The incentive, right now, is to go out and figure out some way to purchase one of the foreclosed houses for half the mortgage a person is carrying, and then let the other house drop into foreclosure. And don’t think no one is thinking along these lines…its the logical thing to do when you’ve put $130,000 into a house which has a 400K mortgage and couldn’t sell for 200K if one’s life depended upon it. Such, anyways, is my situation - but, of course, I won’t do such a thing. The temptation was there, and the temptation was resisted…and now after much cajolery I managed to get my lender to see a bit of reason and we’ve worked out an acceptable deal, albeit one which still has me short the $130,000 I’ve put into the place. Not everyone will be able to resist such a temptation - and if a two income family loses one source of income (something which is becoming more common as unemployment rises), it might become a financial necessity to go the route of buying a new home and allowing the old one to drop away. Unfortunately for us, Obama seems to be concentrating most of his effort on people who are at or near default on their existing loans. I’ve got no particular problem with helping people stay in their homes - both morality and practicality decree that I be in favor of keeping people in their homes (having someone become homeless is something we must, as believers, work hard to prevent…on the other hand, even a non-believer doesn’t want yet another foreclosure on the market to drag down housing values even further). Given that Obama is a liberal, it is a natural that his plan mostly involves throwing good money after bad. What should we do? Essentially go into bankruptcy re-organization of our housing and mortgage markets - rework loan balances to reflect current market values…the banks will lose some of their outstanding receivables, but lots of home owners will lose a lot of money they have put into houses, even if all they’ve put in is interest-only payments for two or three years (this still adds up to quite a lot of money). Everyone loses, but then we’ve got a market where house prices match house values, and thus we can start to rebuild from there. The real beauty of this plan is that it doesn’t require a taxpayer fund to cover other people’s bad moves. Of course, we should be open for suggestions - I certainly don’t hold my idea as the be-all and end-all of existence, but I do like the factors of human solidarity and mercy it reflects. Anyone has other ideas, they should be brought forward…maybe one or two good ideas will eventually get to Obama, and then we might actually have a recovery in the housing market. blogsforvictory.com

To: J.B.C. who wrote (69664)	2/21/2009 2:25:16 AM
From: Sully-	Read Replies (2) \| Respond to of 90947

NRO Talks to CNBC's Rick Santelli Stephen Spruiell The Corner Earlier today, Kathryn posted a link to the video of CNBC's Rick Santelli giving voice to what he described as a groundswell of discontent over the president's new mortgage plan. I caught up with Santelli just moments ago and talked to him about what he says has been "kind of a crazy day." National Review Online: Were you expecting anything like this reaction? Rick Santelli: Not at all, not at all. It was just, after 48 hours of listening to hundreds of people trying to approach me on floors, on trains, everywhere, the opinions were almost unanimous, and I just tried to pick up that thread. The pits weren’t open at the time and the traders that were on the floor getting ready for the opening all started to gravitate to where I was talking, and it just took on a life of its own. NRO: When we posted a link to the video, we were swamped with e-mails in support, including a couple from traders at the Board of Trade in Chicago, who have been saying right on. How have the e-mails that you’ve been getting, how have they been running? Santelli: I’ll be honest with you, I think I’ve gotten somewhere between 850-900, and I think I had three that were negative. NRO: What are that small group of critics saying? Where do they think you went wrong? Santelli: They thought I was uncharitable, got up on the wrong side of the bed, had no compassion for people who are going through rough times, and that isn’t at all the issue. The issue is, you can’t pick out 8 or 9 percent and give them things that weaken the 90 or 92 percent who are carrying the water. You need to come up with legislation that may help the people that need it but not hurt the people that… listen, my 401k’s a 201k, my kid’s college tuition is going up 10 percent. This is tough for everybody. Maybe a tax break, maybe everybody who has a house gets something. They need to quit picking winners and losers, and they have to quit alienating the classes. You have to figure out a way to float all boats, and I think that’s where the administration has gone wrong, and I think that’s the nerve I hit. NRO: You were also skeptical of the original bailout plan, specifically the way that it seemed to be a “Let’s rush through this and figure out the details later” kind of approach. Do you think your predictions on that have been borne out by events? Santelli: I remember this all started roughly in the summer of ’07, and at that point, that Halloween that followed in ’07, I think I said something like, Frankenstein derivatives aren’t going to be resuscitated. These bad positions are going to hang around until they’re taken out. As an ex-trader—I traded for 20 years—bad positions don’t go away. There’s not enough money for many of these banks to sell them, because of what it does to their balance sheets. At the end of the day, whether it’s housing or whether it’s toxic derivatives, I just don’t think you can spend your way into correcting something that’s going to be painful and make it not painful. So I think I’ve been kind of spot-on in many ways as to the spending plans. At the end of the day, it’s simple. A lot of the president’s advisers are saying that there’s a multiplier effect to the government money, and it’s over one. Now if that’s true, then the government should spend non-stop for the rest of our lives, because we’ll get a positive return. And it makes no sense. NRO: Right. And now it seems we passed this bailout bill without specifying any of the details, it’s kind of become a blank check, and they say that Barack Obama can do something like 80 percent of his homeowner-assistance plan without even asking Congress. So how do you think that plays out in the future? Santelli: I guess in the end, I believe in the founding fathers, and I believe that in America... the pursuit of happiness and to work hard and keep the fruits of your labor is something I believe in. And I’m not saying we should forget people who need help. But at the end of the day, Americans are strong and they’re charitable. I think what they have a problem with is that it’s force-fed via the government. corner.nationalreview.com