Why is Bush proposing a mortgage bailout?

What I think is funny is that Bush talks about the "hurt" that subprime borrowers feel when citing the reason for the bailout.

In reality, Bush cares very little about average Americans. The real reasons for the bailout are that the stock market is skittish because of the subprime fallout and the economy is at risk because of the consequences. He's simply trying to calm the panic and prevent recession.

The irony is that if the government was doing its job in the first place, they would have enacted preventative measures earlier to avoid the mess we're in. Instead, the government sat back and allowed subprime lenders and naive borrowers to dig themselves into a hole. As a result, American taxpayers are now financing the bad decisions.

Can we kick Bush out of office yet?

 

<div class='quotetop'>QUOTE(Boulder Bum @ Sep 1 2007, 08:04 PM) [snapback]505574[/snapback]</div>

Typical whiny liberal response trying to appease the masses with unrealistic and unworkable solutions. Crying for more and more regulations, more bureaucracy, more red tape, etc., on how adults can invest their money and go about their lives. Many people made a lot of money and many people lost a lot money by gambling on the real estate market. That's how a free market works. That's how it grows. Don't like the risk; then invest in CD's at 5%/year.

Got stuck on the losing end with a ridiculous mortgage(s) hoping to make a quick buck? Then make it a life lesson that easy money only comes from Vegas and the state lottery. I laugh at every news story about seemingly intelligent people of very modest incomes complaining how they "somehow" overlooked the full terms of the $400,000 ARM's they signed with their own hand... as they are victims by the evil big corporation mortgage lenders!!! (surely Exxon/Mobil must be behind all this...)

So now you lost money in the real estate market and you want your Daddy Bush (or, gasp, your Mommy; Hillary) to bail you out. Mmmm, so sorry, that's not how a free market should operate.

As a conservative person in nature, ironically at least we do agree on one point; when and how soon can we kick Bush out of office??

Rick
#4 2006

 

<div class='quotetop'>QUOTE(Boulder Bum @ Sep 1 2007, 07:04 PM) [snapback]505574[/snapback]</div>

I agree, except I think Bush is getting some whining from his buddies that are being hit by the crash of the real estate market and the ripples it's causing. So he's really bailing out his buddies, not the little people.

And yes, we can get rid of him any time. High time. Overdue.

 

"Consumers now shun ARMs"
.
well, duh. Could have told 'em that 15 years ago when I was
house-shopping.
.
_H*

 

<div class='quotetop'>QUOTE(Godiva @ Sep 1 2007, 09:59 PM) [snapback]505615[/snapback]</div>

Bush's actions at this point are being determined more by how badly he wants his tenure in office to be remembered (i.e., his presidential legacy) than any political ideology upon which he may claim to belong. IOW, he'll do anything to keep from adding economic recession to his long list of failures. The fact that any of his actions might actually benefit anyone other than himself is merely coincidental.

 

You ultra-liberal types are so biased against President Bush, no matter what he does, you people will be screaming at the top of your lungs, about whatever it is . . as being another example of HIS problem.

He could propose free universal heath care for every American citizen and you people would find fault that it doesn't cover illegals, probably involves Halliburton, is a giveaway to the rich and powerful, violates the separation between church and state, and doesn't include marijuana on demand for a headache.


“Just when it looked like millions of homeowners would be left with nothing more than a Hail Mary pass to save their homes, the president has decided to call a few plays from the Democratic playbook.†“This is a good and promising first step, but we must do more.â€
- Senator Charles Schumer, Democrat!
http://polhudson.lohudblogs.com/2007/08/31...words-for-bush/

"PLAYS FROM THE DEMOCRATIC PLAYBOOK"!!!!!!! And you try to ridicule the president? :huh:

You people are so blind in your hatred, you have all become a laughingstock of ignorant fools.

JUST SHUT THE F*** UP! You all bore me. <_<

 

<div class='quotetop'>QUOTE(Sufferin' Prius Envy @ Sep 2 2007, 12:00 AM) [snapback]505735[/snapback]</div>

:lol: :lol: LOLOLOL!!! WHAT HE SAID! Bush Derangement Syndrome runs rampant on this board how many times has Bush done something that comes out of the Lib’s play book and had the BDS’ers here pop a roid over how stupid he is because of adopting that policy? LOLOLOL!!! :lol: :lol:

 

<div class='quotetop'>QUOTE(Godiva @ Sep 1 2007, 08:59 PM) [snapback]505615[/snapback]</div>

DING DING DING DING DING WE HAVE A WINNER

that is the correct answer, I couldn't have said it better

 

Well now, if this is out of the democratic playbook, how come I am not hearing republican criticism of it here in the forum ?

Back to the quesion of *why* the bailout ? The republicans know the 2008 election is going to be somewhere between close and a bashing, so they are throwing money at averting more economic bad news that will be attached to them. A number of us on this forum said that when the housing bubble burst, the true state of the economy will be apparent. Welcome to the now. Sucks to be bush; if the bubble had only lasted one more year, the republicans could have pinned the ensuing turmoil on the democrats.

Love the flip flopping by the way..
flip flop
flip flop
flip flop
flop

 

<div class='quotetop'>QUOTE(viking31 @ Sep 1 2007, 09:03 PM) [snapback]505595[/snapback]</div>

We the people acting through our elected government should not spend one cent to bail out the fools who signed the contracts for Adjustable Rate Motgages. ARMs have always been bad deals for the average Joe and were never meant as a long term solution to buying a new home. Why should we pay the loan sharks that started this mess? Why should the scumbag bankers not feel the pain that they themselves inflicted on borrowers that were too foolish to do simple math.
Who among us does not have money thrown at them 24/7 with the calculated knowledge that some of it will stick. Once you sign your name on that contract which amounts to a modern day "Master and Slave" binding,
all bets are off, they own you.
We the people acting through our elected govermnet should not allow the constant hounding of men, women, and children to give away their dreams to cold hearted bankers.
President Bush has a Teflon coating that allows almost any mud thrown at him to roll off, this coating is not effective when going against big money. Our loss.

 

Not knowing much about economics, what if these people were never afforded an ARM and as such, were never able to afford a home? Because housing loans have some affect the nature and dynamic of corporate loans, did these residential purchases ease up loans for the initiation of new business which strengthened our economy? This resulting bail out may be insignificant in comparison to the overall growth that had been generated. As I say, I know nothing of economics.....this is just a thought and maybe a poor one at that.

In any event, I always believed that if someone makes a mistake, they should take their lumps. It makes people accountable and less apt to make the same error a second time around. In that regard, these owners had better at least be liable for a certain percentage on the dollar and their credit history had better reflect same. They better feel some pain. In that regard I'll second what Burrito said, Moral Hazard.

 

<div class='quotetop'>QUOTE(burritos @ Sep 2 2007, 09:50 AM) [snapback]505884[/snapback]</div>

The "bailout" should be for the lenders, not the people. The proposal to help borrowers is indeed a slippery slope on the moral plane.

I guess its a complex issue. The way mortgages are bought and sold by the lenders means that no one really knows the extent of the problem. The sub-prime lenders who went bankrupt didn't hold all the mortgages; they were sold on the secondary market (anyone who has bought a house has had this happen ... the original mortgage company sells your mortgage, and you have to change your payment address, etc.)

So Countrywide, a non-subprime lender, suddenly realizes that they have a ton of foreclosures. How many of the loans from mortgage companies that they hold are from subprime borrowers? They don't know. All they know is they have a few million loans, and any of them could be worthless.

The bailout so far has been the Fed's discount rate window ... loaning Countrywide and the other lenders money at a good rate (but still charging interest) and allowing them to pay it back in 30 days instead of 1 day. That's an appropriate bailout, because it didn't cost me anything because someone got greedy flipping houses.

There are some stories of "predatory lending". "Predatory" means someone is sorry they signed a paper with all the terms written out in government specified typeface at government specified type size and government specified bolding of the typeface. These people should not be bailed out by the government, although I encourage everyone here to help someone in their neighborhood who is in a fix. My sister in law, who is losing her house due to the double whammy of second and third trust deeds and a nasty divorce, will not go hungry. But you won't have to bail out her or her stupid ex-husband either.

Subprime lenders served a certain market, and when home prices were rising so quickly, everyone thought it was a great idea. When prices quit rising at a 20% annual clip, people could no longer get in cheap, sell at a tidy profit and then, courtesy of your Income Tax code, roll the profits over into another home with a traditional, fixed rate mortgage. Like musical chairs, some people are left without a chair.

 

He didn't say the investors, he said the lenders. You know, the people that packaged these crap loans and passed them on to the secondary market with the collusion of the ratings agencies. The middle-men who took their cut and passed on the risk.

Oh yeah, that is who I want to help ! NOT

To be fair, I think there is some room for discussion whether preventing recession is not more important for the general good than making sure that the people who took out idiot loans get their due. The problem is that the republicans have a long history of enabling whatever stupidity they care to embark on by pulling the 'it's for the economy!' card, so an intelligent discussion is all but hopeless.

In general, I think that the national home ownership rate will have to return to the pre-bubble levels, hopefully without taking the country into recession at the same time. IF not, then recession it is; it's not like we haven't had them before. Heck, some people argue they are a natural part of a cyclic economy. The current and near future gyrations are more related to the upcoming elections than sound economic policy.

 

Bush isn't the first to propose something like this and he won't be the last. Hillary was trying to do something similar a month or two ago. He is doing what any politician does - buying votes. People will vote for the person who gives them the biggest benefit. Who cares what is good for the country, we need to get ourself or our party re-elected.

 

That is obviously not quite the idea ..

I'm no economist, so take the following with a grain of salt: Part of what makes a bubble is irrational exuberance, and part of what drives a recession is irrational pessimism. A confidence crisis can be self-fueling, and in a manner of speaking, becomes a self-fulfilling prophecy. Sane economic policy seeks to contain this irrational behavior, it does not try to alter underlying economic fundamentals. That's the theory, anyway

Bush and the GOP loved the bubble because it helped them hide the Iraq war and corporate tax giveaway costs. Now they get to deal with the downside.

 

i, as a first time house buyer 10 years ago, was smart enough to get a decet FIXED interest loan.... why now should my tax dollars bail out the idiots that were too stupid to do the same?????

hell.... when we refinanced a few years ago when the interest rates were so low.... at an even lower interest rate... (not to mention.... at a reduced time... unlike so many that refinance and redo it all over again at 20 years *rolls eyes*) some people have no money sense! and both of those are just BASIC!!!!!