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thepeel
Joined: 08 Aug 2004
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 Posted: Fri Dec 07, 2007 2:27 am Post subject: Bush suspends capitalism, stocks soar |
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WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Thursday the government had to broker a homeowner aid plan to prevent a spike in foreclosures and said regulators were mulling further steps to prevent a recurrence.
Paulson spoke shortly after U.S. President George W. Bush announced new steps to help troubled subprime mortgage borrowers who face steep increases in their mortgage payments as initial "teaser" interest rates reset sharply higher.
"It is in everyone's interest -- homeowner, servicer, investor -- to develop a market-based approach to avoid foreclosures that are preventable," Paulson said at a news conference with Housing and Urban Development Secretary Alphonso Jackson.
Pressed to explain how a five-year interest-rate freeze is anything more than a patch on a problem that will return, Paulson conceded "this plan is not a silver bullet, you're not going to be able to solve every conceivable issue.
"What five years does is it gives people, it gives us as a country, a chance to work through this housing cycle," he said. Paulson said people could use the time to rebuild their credit rating and possibly qualify for conventional loans instead of the subprime variety that generally are offered to people with less than perfect credit records.
Even if they don't, "Under the worst condition, you're going to go through a refinancing program five years from now but we'll have five years to deal with it," he added.
Paulson later said in a television interview that regulators were considering a number of new steps. He noted that the Federal Reserve was soon expected to come out with new rules on unfair lending and said regulators were also looking at the mortgage-origination process, the role of rating agencies and mortgage securitization.
"Yesterday, the president's working group on financial markets met for a couple of hours and we've been working all the way along and saying: 'What steps do we need to take?'," he told the Public Broadcast Service's "NewsHour with Jim Lehrer." |
http://www.reuters.com/article/bankingFinancial/idUSN0626275420071207
Is this moving towards privatizing profits but socializing losses? |
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richardlang
Joined: 21 Jan 2007
Location: Gangnam
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| Posted: Fri Dec 07, 2007 2:51 am Post subject: |
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I don't really know what these homeowners thought when they signed these sub-prime mortgages. From what I gather, the value of your house generally doesn't change radically within five years (i.e. estimated time from signing until your rate explodes wildly) to the degree needed to borrow against your home's new value so you can pay your new, high rate. Am I wrong?
That said, this may sound heartless, but all of this is truly a case of people making bad choices whilst thinking only about the present. |
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Czarjorge
Joined: 01 May 2007
Location: I now have the same moustache, and it is glorious.
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| Posted: Fri Dec 07, 2007 4:03 am Post subject: |
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It's not so much about helping the people keep their homes. Rather, the government is trying to prevent the banking conglomerates, the majority of which have a large amount of money invested in the sub-prime market, from folding or taking large hits. If they go the US would likely face another depression.
The US government doesn't actually help people anymore, just business. |
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blaseblasphemener
Joined: 01 Jun 2006
Location: There's a voice, keeps on calling me, down the road, that's where I'll always be
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| Posted: Fri Dec 07, 2007 6:00 am Post subject: |
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| Czarjorge wrote: |
It's not so much about helping the people keep their homes. Rather, the government is trying to prevent the banking conglomerates, the majority of which have a large amount of money invested in the sub-prime market, from folding or taking large hits. If they go the US would likely face another depression.
The US government doesn't actually help people anymore, just business. |
For the love of god, pleeeease change your avatar!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! |
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Czarjorge
Joined: 01 May 2007
Location: I now have the same moustache, and it is glorious.
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| Posted: Fri Dec 07, 2007 9:28 am Post subject: |
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| hehehaheahehehahehahehehaehaheahehaehhehehahehehaheheahaheh |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Fri Dec 07, 2007 12:14 pm Post subject: |
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| I would appear the Bush administration is bankrupt of ideas to solve this problem. With 13 months left in office, let's postpone it 5 years. |
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khyber
Joined: 16 Jan 2003
Location: Compunction Junction
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| Posted: Fri Dec 07, 2007 2:13 pm Post subject: |
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| no no no. But sometimes you need socialist policies to keep capitalism going right? |
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Kuros
Joined: 27 Apr 2004
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| Posted: Fri Dec 07, 2007 4:35 pm Post subject: |
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The title to this thread is misleading.
Democrats are squeeling that the measure doesn't do enough. It'll only affect some million homeowners as it is, who have to fit pretty rigorous qualifications.
Is the solution disgusting? Sure. But the scope of the effort is limited enough. Bush is stealing the Democrats' thunder by passing a very weak bail-out. Its the best we can hope for politically. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Fri Dec 07, 2007 6:10 pm Post subject: |
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The title to this thread is misleading.
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Consider the source. |
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Octavius Hite
Joined: 28 Jan 2004
Location: Househunting, looking for a new bunker from which to convert the world to homosexuality.
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| Posted: Fri Dec 07, 2007 6:43 pm Post subject: |
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The title is so FOXnoise, when I was in Boracay last summer (when this whole subprime nonsense started) FOX and its nuts were running programs yelling about how good it was that people would lose their houses.
I would love to watch FOX now and watch Brit Hume's head explode. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Fri Dec 07, 2007 7:58 pm Post subject: |
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The title is perfectly accurate. Bush has suspended the consequences of individuals and firms making poor decisions and living beyond their means. Because of this markets staged a rally yesterday. Perfectly accurate.
I wonder why he choose 5 years? |
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thepeel
Joined: 08 Aug 2004
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| Posted: Fri Dec 07, 2007 8:03 pm Post subject: |
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| Octavius Hite wrote: |
The title is so FOXnoise, when I was in Boracay last summer (when this whole subprime nonsense started) FOX and its nuts were running programs yelling about how good it was that people would lose their houses.
I would love to watch FOX now and watch Brit Hume's head explode. |
Sorry hite, but the only way that this can be fixed is for many people to lose their homes at ones and for home prices to then come back down to reality. These loans that have been securitized can't be saved. Most investors had no idea what they had bought and it would likely be impossible to unpackage them all.
If you were earning 40-60k/year and living in a bank-owned 400k house, and treating the equity in your house like an ATM and by this increasing the amount you owe on your house, then yes, you are going to lose your house. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Fri Dec 07, 2007 8:04 pm Post subject: |
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| I wonder why he choose 5 years? |
He 'choosed' 5 years to keep it out of next year's presidential election. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Fri Dec 07, 2007 8:10 pm Post subject: |
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| Ya-ta Boy wrote: |
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| I wonder why he choose 5 years? |
He 'choosed' 5 years to keep it out of next year's presidential election. |
Not be so naive Ya-Ta. We all know what a "5-year plan" proves. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Fri Dec 07, 2007 8:12 pm Post subject: |
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I guess 40 year of correcting spelling and you can't break the habit.
Wouldn't 5 years place the issue towards the end of the 2012 election cycle? Is Bush throwing the Democrats a economic problem in the hopes that the republicans can point to Obama/Clinton as the cause of the problem? |
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