Friday, March 26, 2010

Bailout Pig, Gets New Shade Of Lipstick

We saw this coming. The Federal Government has had a lot of criticism for the bailouts. But rich people who are crappy at business, continue to finance lobbyists who are more than happy to visit Washington's Red Light District, and mingle with lawmakers.

The bailouts continue to erode the US economy while, turning crappy Ponzi schemes into gold for wealthy gamblers.

The Wall Street Losers need more and more of their losses covered, as they aren't any better at gambling now, than they were when the lost trillions of dollars in the last go round. One gaping maw under their feet, is the lack of value in their assets. They've been able to maintain their Wiley Coyote momentum so far, by creating the illusion that their assets are still worth what they were at the top of the bubble.

But as jobs are lost, and salaries are slashed, the fundamentals behind pricing assets at multiples of their actual market value are becoming a serious problem.

The White House is taking steps now to keep prices inflated. Because people are earning less, they are buying less. So the White House wants prices to go up, to keep profits up. In the case of banks, this will mean that non-performing loans can remain AAA rated. Homes that are valued by the market at %150k, but valued by the banks at $300k, will keep their value, and the bank doesn't have to take a loss on their balance sheets.

The policy of allowing illegal fraud, must continue. The government must help the banks expand their fraud. Otherwise rich people who make their fortunes through fraud, Ponzi schemes, and welfare handouts, won't be able to increases their riches at the expense of the citizenry. For the White House, these rich criminals are the only people that matter. These people are their constituency. The rest of us are filth covered farm animals in their eyes. After all, when the White House staff and lawmaker bend over at night and spread their cheeks fore the lobbyists, we're not being represented. It takes cold hard cash to get them to bend over and spread them. They don't give it away for free.

And in the following, don't expect that this will really make a difference to the working man. He doesn't visit Washington's Red Light District.

U.S. Expands Homeowner Aid to Stem Foreclosure Wave

March 26 (Bloomberg) -- The Obama administration announced programs to help U.S. homeowners avoid foreclosure, including subsidies for borrowers who owe more than their home is worth.

The plan expands Treasury Department and Federal Housing Administration efforts and uses funds from the $700 billion Troubled Asset Relief Program. The administration faced a week of criticism from lawmakers and watchdog groups who say the government hasn’t helped enough homeowners stave off foreclosures.

“It’s almost like a triage policy,” said Eric Barden, chief investment officer of Barden Capital Management in Austin, Texas. “It limits the losses of the most overvalued properties and it also limits the losses to the borrowers that are in the most distress.”

7 Comments:

At 9:23 AM, Anonymous PetrolPet said...

Red Light District...

For sure... Pelosi had them change the bulbs in the Capitol Dome...

Red Light!

 
At 10:38 AM, Blogger edgar said...

And so it goes.

 
At 1:37 PM, Blogger Weaseldog said...

I'll get a bit more pessimistic and note that homeowners aren't likely to get a break in this deal. I bet it works out for free money to the banks, due to some loophole in the legislation.

The money may not even go to paying down mortgages at all, as it's advertised to do.

On that note, I'm not so quick to get my underpants wadded up over flippers making out like bandits from this as good ole KD is doing.

 
At 2:25 PM, Blogger an average patriot said...

I was listening to this, this morning and the pessimist in me automatically said yeah more the banks. They want to help no one but themselves and no one can make them.

 
At 5:14 PM, Blogger edgar said...

It's not just the flippers, many took out six figures in refis then defaulted without bothering to sell the house. Now the fedgub is giving the banks money on top of money in the guise of helping people. It won't matter because states like cali will have no choice but to foreclose for tax sales as people aren't paying property taxes either and I doubt uncle sugar will want to pay for that too.

 
At 1:16 AM, Blogger Bukko Canukko said...

That last bit is an interesting thought, Edg. I'm thinking out loud here (instead of checking my medical charts at the moment, like I should be doing...)

States, especially California, might see tax lien foreclosures as a way to fill theit budget gaps. Grab some land and buildings, sell them for whatever they can fetch, keep paying government employees (plus those all-important bondholders for the massive public debt issues.) This would be one backdoor way of forcing honesty into housing prices.

But who would squeal over that? Bagholders who had pieces of the MBS's on the foreclosed properties? Would they even be able to figure out WHO owned what piece of that rickety-stick built exurb on the edge of the desert way outside L.A.? The .guv and .fed would probably have already paid off THOSE bagholders and counterparties anyway as part of the corruption scheme.

A good way to get some positive socialism, the kind that benefits people instead grubby governments/institutions, would be if the seized/foreclosed housing could be operated for the public good by the state.govs that grabbed it. That 3-bedroom ranch-style that was taken for non-payment of proptax? Rent it at the subsidized rate of $300 a month to some family on the dole. It would set a baseline for private-sector rents, too, so tenants everywhere would benefit.

Only, property owners would get screwed that way, if they had to accept lower rents because the .gov was charging less. And we all know that benefitting people/corporations with enough capital to afford property (including when that property was human slaves in 1776) is the basis of the American system. Plus, if you had a .gov running housing, some skeeving bureaucrat would start demanding corruption like bribes or nights in the sack with the MILF tenants in exchange for good rental homes. The U.S. is a nation of grifters, always on the lookout for a scam if they get a little bit of power.

So never mind all these thinking-at-the-keyboard ideas. The U.S. is fecked. "Save qui peut!" as the French say as they're running away.

 
At 4:39 PM, Blogger edgar said...

Hello Bukko,

Indeed, comrade scam thy neighbor and protect thine own bacon. I don't care if the usa wants to assign free houses based upon political affiliation or human genome sequences I just wish they'd stop calling what we have capitalism.

 

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