Friday, November 30, 2007


After saying over and over he would not bail out speculators, Bush is bailing out speculators. I would expect this from Hillary. I would expect this from Obama. I had a hope, ever so small that the Idiot in Chief would do something right. How wrong I was. This is the crowning achievement of the Worst President Ever. Kudos Jorge, you've done it. You have gone to new depths. You have done the impossible and made Jimmy Carter look like a great leader.

This plan won't do anything to help anyone. Someone with a 500 FICO will still default eventually. Now instead of defaulting in 6 months it will take a year or a year and a half. All this will do is delay the inevitable. What the monkey who lives at 1600 Pennsylvania Avenue doesn't get is that this will actually hurt housing even more. What they are doing is essentially saying a contract no longer matters. The contracts signed stipulated a rate change after 2 years. Those contracts are now being used to wipe the ass of Republicans on Wall St after eating their $175 steak dinners.

However what this also does is spell the end of ARMs. If a lender knows he cannot expect a contract to be honored and enforced, he will no longer issue that contract. And without ARMs, fewer buyers will be out there. This will hurt prices as badly if not worse than the current situation.

WASHINGTON (AP) -- The Bush administration and the mortgage industry, trying to combat a massive wave of foreclosures, are hammering out a proposal to temporarily freeze interest rates on certain troubled subprime mortgages. If adopted, it would be the biggest action taken to cope with the unfolding crisis.

The talks have involved all the federal banking regulators and major players in the mortgage industry such as Citigroup Inc., Wells Fargo & Co. and Countrywide Financial Corp.

The major thrust of the proposal would be to get lenders to extend for a number of years the low, introductory rates that were offered on subprime mortgages, loans usually offered to borrowers with weak credit histories.

Let me translate that for you. Bush's message to anyone who has a fixed mortgage, who isn't a deadbeat, who's carefull with their money, who didn't didn't gamble and lose by being all of you....GO FUCK YOURSELF.


Anonymous said...

Nice of you to finally figure out Bush has been a disaster. Scary part is he still has a year left to screw things up.

Dino said...

I fail to see how this is a bailout. There is no mention of government money being used to bail anyone out. As I read this agreement banks will voluntarily freeze rates at the low rate. From a business point of view it works for the bank's advantage. Getting a lower interest on a mortgages is better than getting no interest from a foreclosure.

Ed said...


You are right there is no mention of any explicit govt handouts. However it is a bailout in 2 ways.

First, very quietly Jorge Arbusto is allowing Freddie and Fannie to start buying up the CDOs. So the lenders still get paid the full value of the paper even though the borrower is only paying a fraction of the paper. Freddie and Fannie are technically not govt run but they are govt backed, same thing in essence. The money to buy the CDOs will still come from taxpayer dollars. And that is indeed a bailout.

Second it is stealth bailout via iflation. We have a $10 TRILLION debt already. So where will these hundreds of billions of new dollars come from? Print it of course. That means a lower dollar for you and me which will mean everything you buy will cost you more.