Thursday, December 06, 2007

Bush's Ultimate Brain Fart

According to my media sources, President Bush and his cadre of boobs are going to "fix" the home mortgage crisis by letting a bunch of people off the hook for their loans, most likely high risk, adjustable rate mortgages (ARM). If you meet all these strange rules like paying on time after a 2005 home loan, you're forgiven from the 30 percent bubbles when the "teaser" rates go up.

That really chaps my hind quarters. I went through this the hard way, like actually saving money and not putting too much out there in credit risk. I work so hard to raise kids, pay for everything on time, and put them in college - and pay for a very expensive, old beach shack on South Padre Island. How dare some nabob come on saying he's going to forgive billions in predatory lending and very unwise purchases when I've worked so hard to just stay afloat?

I lost nearly all my investment money on "Black Friday" back in the 80's. We lost our house in the Texas Savings Loan Scandal in about 1987 because the Tony Sanchez bank went belly-up. We lost much of our 401k plan money in 2001. Darn it, nobody paid me a red cent for losing all that money because the government messed up! I'm talking about losing over $300,000. Write me a check with five 9's and no cents in it and I'll get off my high horse.

Sorry, I feel for the people about to hit the street and look for rent houses because of the ordeal, since I've been there and had to go through years of building good credit because the banks and government screwed me over royally, three times over. But the Bush Plan just gives away money for making really bad decisions - and the proposed solution is a really bad decision too. I resent that. I made smart decisions and got caught upside down - these folks made stupid decisions at each and every step of the way.

So, we're penalized because we did the right thing and were careful, right? Gee thanks, Prez.

UPDATE: apparently I'm not the only one who is mad about the proposed bail-out. The more clinical and objective Economist writes:

Whatever the economic arguments for the Bush administration’s plan, it amounts to poor public policy. America’s unfettered brand of capitalism is one of its strengths; investors may be less likely to trust a government that manipulates private contracts when conditions deteriorate. At a time when the economy is already weak and the dollar is suffering from a crisis of confidence, Mr Paulson’s awkward intrusion into the mortgage market looks more like desperation than a hedge against further trouble.


don Miguel said...

And Sam....I think it only fair to include.. all the other proposed govt intervention plans (Pelosi, Clinton, et al)

* These types of non-market bailouts are not 'fair' to those parties who have been responsible for their own financial actions.

* They are not 'fair' to those family's who purposely chose a higher fixed rate 30 year loan due to their sense of fiscal responsibility.

* They are not 'fair' to other mortgagors in somewhat similar circumstances who will not be given 'forgiveness'.

* They are not 'fair' to renters who chose to wait until they might became more 'financially prepared'.

* They are not 'fair' to average citizens, many of whom may well 'find' losses in their own portfolios due to the 'slicing & dicing' of these alphabetical CDOs & CMOs financial instruments which surprisingly may soon be discovered in one's own 401Ks, IRAs, MMMFs, etc.

* They are not 'fair' to small investors who attempted to perform 'due diligence' regarding risk/reward investment analysis.

And most importantly...

* They are not 'fair' to the 'Rule of Contract Law'....which might well impact future financial & market scenarios...(if one cannot trust performance of a written contract...then what?)

Oh...And I don't mean to sound mean-spirited either Sam...I haven't forgotten about those individuals who may find themselves going through foreclosure....I do feel for them, and I've had my serious 'downs' too.. I direct much of the blame on Congress who 'pushed hard to provide greater home ownership numbers. Fault can be placed also on our educational institutions by not better preparing our young people on understanding how our economic system functions...and importantly, how they might avoid similar problems in the future. And of course, I lay blame on, not all, but on those financial intermediaries who circumvented ethical and legal boundaries. They and all the bad actors should be held accountable for their unethical and illegal actions.

I guess you can tell on how I feel...I just don't think any of these proposed govt bailout plans are...'fair' and fear that they may lead to further and perhaps greater problems in the future...The clock is....ticking!

Sam said...

Well you have a point about all the meddling with the economy - all politicians do it. Really, what could Bush do without a "government bailout" that would REALLY [anger] people off?

I look at it this way: if you want to sell expensive hats on SPI, you'd better have a real good business plan. And I'm not crying is they go out of business because people won't buy expensive hats!

But no, some pro-business pol is going to come along and say "We need to make small business better for SPI, including the Pink Hat Lady."

Basically, that's supporting a business that SHOULD have failed, at least in my silly example.

Good comment. /sam

Lucinda said...

Well, there but for the grace of (insert deity name here) and a good mortgage broker -- go I. I will freely admit that I am not good at finances or researching things like mortgages. When I try to read contracts my eyes glaze over and I develop a weird tic in my right eyelid. I expect the person I am paying to help me work a real estate deal knows her stuff and is going to direct me to the best possible option. And if she doesn't, then according to you that is just too bad....?!

I was lucky. I got a fixed mortgage (2 of them, as a matter of fact) and feel reasonably confident that I can stay on top of them. But
some aren't as lucky as me or as smart as you two. They were taken advantage of by greedy, unscrupulous people and now you are pissed off when someone shows a few of them a shred of compassion?

Merry Christmas to you too.

Lucinda said...

And another thing - if you truly think this is the worst thing Bush has done while in office, then I really have cause to wonder about you, Sam.

Sam said...

Well Lucinda, you're right about the real estate folks taking advantage of about 27% of homeowners with new notes in Cameron and Hidalgo counties, some of the highest default and foreclosure areas in the nation because of this mortgage mess, worse than Florida, California, Michigan, and Las Vegas.

And worse yet, the Bush plan will not help them in the least - which I guess is a second part of my bitch with the proposed plan. Only people who pay on time and have good credit can apply.

It's not going to be a very good Christmas for some of these people, and I feel down about that.

* * *

Since you jumped my pony about President Bush, well he is certainly the worst rube we ever had for a president.

You complained several weeks ago that many in the military were not supposed to share their thoughts about their opinions of Iraq and the President. A recent poll I saw (NY Times or Washington Post maybe?) said that for people who are serving or have served in Iraq, their opinions are about 60% against the entire effort - similar to the general population but maybe a point or two more conservative.

This comes from soldiers, marines, and support who know the locals, the kids, and families in Iraq.

That's remarkable. Bush used to count on a very high positive opinion rating from the military and the religious right. 'Toto, I don't think we're in Kansas anymore.'

I would have impeached him and his sidekick Cheney but obviously that is not within my power...

Lucinda said...

Yeah buddy.
The latest scandel - the destruction of the torture tapes and the ensuing coverup - might actually have some legs.

When are the American people going to say enough is enough?

Beerman said...

Hey there good buddies!

I agree 100% that we the middle class tax payers have no business bailing out ignorant buyers of McMansions that should have never been approved to lend $$ to. On Social issues GW is more Liberal than Joseph Liberman. But let me make one thing straight. Invading Iraq had nothing to do with WMD's The wacco islamic facists hate progress! Iraq was a good first step to overthrow a slimeball that needed killing. He was tried, convicted and exicuted by his own people. A greater percentage of Iraq's voted in their last election than ours! They risked their lifes to get a purple stain on their finger. Libs bus in alcoholics and illegal aliens to sway an election. For modern man to survive we need more moderate followers of Muslim to vote, work, and take their countries back. Iran is next to nudge into a democratic form of government. The news is going crazy over a couple of home grown terriorists right now, can you imagine the death toll if some well trained suicide murders get loose in the USA?

America has already forgotten 9-11, we are at war, WWIII is here, one dirty bomb in a mall, or sunken cruise ship, the vacation economy of a little barrier island in south Texas ain't going to mean squat. How much attention did the causeway get once it was determined an accident? If it had been am act of terror all of you would have gotten a million bucks in compension :)

There, I feel better now, Relax, have a Homebrew!

I have a couple of pints bottled for your approval, need to bottle some White Zen before I ship you your care packages!

Merry Christmas and God Bless America and By God Texas!

Ken T.