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KhaiJB
December 22, 2008 5:44 PM
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proof that a PHD does not include common sense. you have to have that already.

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8 replies
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johnva
December 22, 2008 7:07 PM
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@KhaiJB: He knew exactly what he was doing. It's not \"common sense\" he lacks; it is a moral sense to check his unbridled greed. This explanation is a lie.

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Mr_Human
December 22, 2008 9:25 PM
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@johnva: His greed? How did he personally profit?

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Traveshamockery
December 22, 2008 9:39 PM
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@Mr_Human: Shh, you're messing up the Bush-bashing. No facts or logic are required!

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blackmage439
December 22, 2008 6:11 PM
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@KhaiJB: A wise man once said to a scarecrow, who was looking for a brain:

\"Back where I come from there are people teaching in universities, who have no more brains than you have. The only thing they have that you don't, is a diploma.\"

On a side note, there seems to be an emerging pattern with all of these Bush-appointed cronies.

\"Whoops. Sorry the market just gone did imploded. What was I supposed to do? I'm just an idiot in a Cabinet-level position. How the hell should I know what's going on?!\"

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Wally East
December 22, 2008 8:51 PM
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@blackmage439: Why should the administration's handling of financial and economic matters be any different than its handling of wars or disasters?

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dallasmay
December 22, 2008 6:06 PM
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@KhaiJB: You know, I think Common sense is over rated. Technically, it is Common Sense that got us into this mess. What we need is some one that can look past the Common Sense, and know what is really going on. Common Sense is not all it's cracked up to be.

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CumaeanSibyl
December 25, 2008 11:28 PM
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@dallasmay: Common sense would dictate that one should not buy a house if one cannot afford the maximum possible monthly payment. Where does common sense come into this again?

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dallasmay
December 31, 2008 3:36 PM
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@CumaeanSibyl:

Yeah, you see, obviously it didn't. The problem is that lots and lots of people think the same way, hence the term \"common sense\". When lots and lots of people think one way, and get into a lot of trouble, \"common sense\" was wrong. \"Common sense\" is wrong all of the time. \"Common Sense\" is what told GWB and congress that borrowing money from China to write checks out to a hundred million Americans so that they can buy things and preempt a recession, was wrong.

Here is another example: Credit. \"Common sense\" says buy now-pay later. That's what most people do -or did. It also told them to buy the biggest house the bank would let them. I call this \"Common Sense\" because most people did it. It's common.

Just look at politicians. They brag about having \"Common Sense\" all of the time. And they are normally wrong.

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TouchMyMonkey
December 23, 2008 4:51 PM
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@dallasmay: Examples, please. What you just said makes absolutely no sense.

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concordia
December 22, 2008 8:28 PM
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@dallasmay:
>Technically, it is Common Sense that got us into this mess.

I don't follow your train of thought at all. To me, CDSes on their face seem like a dubious way to make money. I mean, go to anyone that isn't a banker and tell them that there's money to be made in buying debt then passing that debt off to some idiot that intends to do the same thing to yet another, dumber idiot.

Shortly after Bear Stearns collapsed Warren Buffet was talking about how he was largely unaffected by all of Wall Street's goings-on because he simply didn't use investment vehicles that relied on complex models or used some form of 'trick' to make them work.

Warren Buffet's approach is the pinnacle of common sense.

Credit default swaps are their antithesis.

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speedwell (!)
December 22, 2008 5:44 PM
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I propose that taxpayers arrange to reduce the maximum compensation of all govenment employees to a level where \"affording a house\" becomes a meaningful concept to them.

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7 replies
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MissingPieces
December 23, 2008 5:09 PM
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\" (what is the maximum salary at the top pay grade, anyway)\"


kinda sums it up right there...
maybe if you say it slower and louder it will make more sense? =P


\"I propose that taxpayers arrange to reduce the maximum compensation of all govenment employees to a level where \"affording a house\" becomes a meaningful concept to them.\"


looks like you said 'all' to me...

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SynMonger
December 22, 2008 9:06 PM
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@speedwell: I work in a state government funded job, and I make about $23k a year to do it. Affording a house is something I can only hope for.

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 10:10 PM
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@SynMonger: Same, and I just got *out* of my gov. funded job to a better one. I still can't foresee myself owning a house any time soon.

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Xay
December 22, 2008 8:01 PM
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@speedwell: I hope you mean \"elected officials\" when you say government employees. This government employee has never been able to afford a house.

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speedwell (!)
December 22, 2008 9:34 PM
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@xay: @SynMonger: Obviously I didn't mean people's salaries should be reduced unless they were making more than the maximum salary someone could make and still have to think about whether their house was affordable. If this is still too opaque for you, I can explain it again slower and louder so even government employees can understand.

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BluePlastic
December 23, 2008 2:36 AM
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@speedwell: You said \"all\" gov't employees as if \"all\" gov't employees are rich.

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speedwell (!)
December 23, 2008 4:01 AM
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@BluePlastic: Reading comprehension is of God.


I didn't say to reduce everyone's salaries indiscriminately, I said to reduce the maximum salary government workers could make (what is the maximum salary at the top pay grade, anyway) until the economic realities of what it took to own a home scrolled within their blinkered view. In yet other words, I proposed bringing the salaries of the guys at the top down to the level of people who have to actually think about what they spend on and for their home.


Again, \"a little bit louder and a little bit worse?\"

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Rachacha
December 23, 2008 2:16 PM
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@speedwell:
The Office of Personnel Management publishes Federal employee salary tables. Employees in the Washington DC area (most federal Employees)get: [www.opm.gov]
The Highest pay rates are in the San Francisco Area [www.opm.gov]


To read the tables, select a GS level (administrative people usually top out at a GS-9 or GS-10, Engineers top out at GS-13 or GS-14 (although they start at GS-9), Lawyers usually top out at GS-14, and start at GS-9,
GS-15 is typically supervisor level)


Next, select a step level. Employees start at step 1, and increase from step 1-2-3 every year. They then need to wait 2 years before they increase between steps 4-5-6, and 3 years between steps 7-8-9-10, meaning someone is at a step 9 has most likely been with the government for 18 years (there are some exceptions and the rules are much more complex, so all you federal employees don't yell).


Also, you can research the salary of your favorite federal employee (unless they work in a position where their identity needs to remain secret) at [php.app.com] gathered through a Freedom of Information Act Request.

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speedwell (!)
December 23, 2008 4:02 AM
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@speedwell: Actually I did have a /b somewhere in that last post after the first line. or maybe it was a /i, which could be the problem.

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speedwell (!)
December 22, 2008 5:47 PM
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@speedwell: Yes, I do indeed mean that the President should pay for the White House and its expenses out of his own pocket. He would get a set amount of money, and he would have to budget accordingly. Good training for dealing with budget realities, don't you thin?

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Hooray4Zoidberg
December 22, 2008 7:36 PM
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@speedwell: I agree, it's the same issue with health care, most politicians don't have the financial difficulties that can be associated with having to pay for health care, and getting manhandled by insurance companies who consider things like replacing a severed finger as \"elective\" surgery. Of course health care isn't going to be a big issue for you when you making millions of dollars and have most your healthcare expensive paid by your employer, in this case, the government.

If they had to pay the ridiculous rate everyone else does and get the run around every time you file a claim and it's denied for no good reason, I'm sure things would change quickly.

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Ash78 ain't got time to bleed
December 22, 2008 5:48 PM
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Well, I suppose it's surprised everyone that dumb homebuyers, in tandem with greedy mortgage brokers, equals a recipe for FAIL.


A lot of economics is based on \"the rational consumer\" and \"the rational seller\"...this crisis was lacking a lot on both sides. Shortsightedness FTL.

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ludwigk
December 22, 2008 6:39 PM
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@The Name's Ash78, Housewares: Right, they just presumed that the home buyers were 'informed, rational decision makers' when they signed up for a no-down, interest-only ARM that would balloon to 27% in 5 years. Never mind that *they* would never agree to such terms, but someone else giving them the OK must mean that they know what they're doing...

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katylostherart
December 22, 2008 5:50 PM
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\"He's currently serving as chairman of Cerberus Capital Management, which among other things, owns 80% of Chrysler.\"

isn't that a statement AGAINST his competency?

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5 replies
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scoosdad
December 22, 2008 9:06 PM
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@katylostherart: I guess then he's also forgotten that 80% of Americans can't currently afford a new Chrysler.

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ADismalScience
December 22, 2008 5:57 PM
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@katylostherart:


It sure is. Here are their other holdings, which are basically a litany of scarily wounded companies. GMAC is another terrible investment. Then again, nobody in Private Equity seems particularly brilliant at the moment.


[www.cerberuscapital.com]

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madanthony
December 22, 2008 10:33 PM
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@ADismalScience:

They intentionally buy \"wounded\" companies - their goal is buying \"undervalued\" companies - ie buying companies that are fucked and either unfucking them or selling the parts for more than the whole. They probably figure if they lose money on some of them, they can make it up if they have a few big successes.

My understanding with Chrysler was that they paid next-to-nothing for it from Mercedes - that Mercedes forgave debt in amounts greater than what they paid for the company.

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MadonnaAthos
December 22, 2008 9:21 PM
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@ADismalScience:

Not really, he just helped Chrysler (read: Cerberus) get part of the $18 billion payout plan.

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Hooray4Zoidberg
December 22, 2008 7:39 PM
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@ADismalScience: Wow, isn't Cerberus the two headed dog from hell? Fitting name for a venture capitalist group.

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uncle moe
December 22, 2008 5:55 PM
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Excuse me Mr. Snow? Could you please step to the back of the cell?

Thank you.

Ooops, I forgot where I put the key. Enjoy your stay.

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Onion_Volcano
December 22, 2008 5:55 PM
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I weep for this nation.

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moore850
December 22, 2008 5:58 PM
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Why am I not surprised that he \"owns\" 80% of chrysler?

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4 replies
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varro
December 22, 2008 8:05 PM
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@moore850: In Soviet America, Chrysler pwns you!

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howie_in_az
December 22, 2008 6:10 PM
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@moore850: I'm pretty surprised anyone would pony up the $10 to buy 80% of Chrysler, especially in this economy. $10 can feed a family at McDonalds or nearly fill your gas tank.

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 10:08 PM
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@howie_in_az: Not anymore - my boyfriend and I bought breakfast at mcdonalds yesterday - $15!! And he got a sandwich and I got pancakes - not even the pancake MEAL!

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varro
December 22, 2008 8:06 PM
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@howie_in_az: Howie, I wish you could fill a gas tank with $10 of gas...hopefully, we can squeeze that Saudi Royal Family so that'll be a reality.

A lot better than being able to fill a gas *can* with $10 of gas...

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madanthony
December 22, 2008 6:01 PM
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I went to the article hoping that the comment was taken out of context, or was explained better. Sadly, it doesn't appear to be the case.

Home ownership has always been considered the \"American Dream\", and it would have been political suicide for anyone - from either party - to take steps like additional regulation that would have decreased the ability of people - especially of poor, subprime borrowers - from owning houses - especially in an real estate boom where people were seeing their houses going up 20% a year.

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Mario Tate
December 26, 2008 2:45 PM
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@madanthony:


um everyone was screaming for regulators to to step in on predatory lending practices, reverse mortgages, interest only, no monye down, refinances that did not one any good but the lenders.


I believe it was these practices allowed to run amok un checked that are the primary cause of thsi economic catastrophie.

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MissingPieces
December 23, 2008 5:12 PM
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@madanthony: 'taking steps..' like what? making sure they are qualified and can afford it? if you cant afford something it shouldnt just be given to you with well wishes.

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madanthony
December 23, 2008 8:22 PM
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@MissingPieces:

The only way the government could have prevented the mortgage crisis was to pass laws that 1)pretty much banned any kind of mortgage other than a traditional 20% down, fixed rate, 30-year loan and 2)banned the securitization of mortgage securities.

There is absolutely no way that any politician would have proposed these things, because it would have made it impossible for a sizable number of people to get loans, and sent housing prices down sharply. Many of these people shouldn't have gotten loans, but politically, nobody wants to be seen as the guy who broke up the party.

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 10:07 PM
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@madanthony: So instead of completely de-regulating the market, they couldn't have just kept it the way it was and NOT wrecked our economy?

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ARP
December 22, 2008 7:23 PM
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@madanthony: Can you please present your statistics that it was the poor who made up a majority of sub-prime borrowers?

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madanthony
December 22, 2008 10:26 PM
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@ARP:

can you show me where in my post I said \"majority\"? A nontrivial number clearly were - the number I found googleing was 29% low-income, but the site required a subscription.

Anyway, This NPR story suggests that many of the borrowers were from groups that it would look bad to be denying credit to:

Studies have found that subprime borrowers tend to live in low-income neighborhoods. They're less likely to have a college education and more likely to be a minority, especially black or Hispanic.

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Tightlines
December 22, 2008 7:48 PM
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@ARP: No, he can't, because that theory has already been disproven.

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Ash78 ain't got time to bleed
December 22, 2008 6:02 PM
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@madanthony: Can you imagine what the class-based criticisms would have looked like? \"OMG the Rethuglicans are trying to keep poor and minorities out of houses!\"


Sounds like a rock vs hard place.

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Evil_Otto
December 22, 2008 6:04 PM
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@The Name's Ash78, Housewares: Call the waaaaaahmbulance, someone's trying to make the GOP work at something.

Finding that balance is what all those expensive PR flacks get paid for.

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P_Smith
December 22, 2008 6:02 PM
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So, were these people that incompetent, or were they only interested in gouging homebuyers with inflated house estimated and ballooning interest rates, and hoping the suckers could keep paying?


Either way, such people deserve to be denied breathable air for a day.

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 10:07 PM
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@P_Smith: Oh I'm sure they'll claim over and over that they just kinda \"missed it\" whilst they finger the coins in their pocket and inwardly laugh.

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Hank Scorpio
December 22, 2008 6:03 PM
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Did they forget that fact, or simply ignore it?

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Trai_Dep
December 22, 2008 6:34 PM
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@Hank Scorpio: They were aiming for the bubble popping one year after they left office. (Un)Fortunately, their forecasting skills are about as solid as their management ones.
Oh. And money. Lots and lots of lobbyist money.

My favorite part of the article is when the administrator responsible for Freddie & Fannie, Armando Falcon, wrote a scathing report warning of these GSEs' impending collapse, the White House's response was to, well, I'll just quote:

\"Days later, as Mr. Falcon was in New York preparing to deliver a speech about his [critical] findings, his cellphone rang. It was the White House personnel office, he said, telling him he was about to be unemployed.
His warnings were buried in the next day's news coverage, trumped by the White House announcement that Mr. Bush would replace Mr. Falcon, a Democrat appointed by Bill Clinton, with Mark C. Brickell, a leader in the derivatives industry that Mr. Falcon's report had flagged.\"

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 10:06 PM
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@Trai_Dep: Are you serious?
Wow, that is uber scary. Not only did they hush up the guy trying to help, but they put the bad guy in his place. What terrible scum bags, the whole lot.

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m4ximusprim3
December 22, 2008 9:46 PM
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@Trai_Dep: @concordia: The amazing thing is not that this happened, but that nobody seems to give a crap.

I would never have believed that we could have an administration that could fail so monumentally that something of that magnitude isn't even reported.

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concordia
December 22, 2008 8:34 PM
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@Trai_Dep: Man, once again reality trumps fiction in the dark humor category.

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the_wiggle
December 23, 2008 5:19 AM
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@concordia: yeppers. i saw the headline thinking it was from the Onion; alas, no.

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sebadoh128
December 22, 2008 6:18 PM
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I don't take it as a literal statement. It's not that they \"forgot\", it's that they were trying to so hard to make creative financing available to all comers (along with the Congress, can't \"forget\" their part) they didn't understand that sooner or later the chickens come home to roost. Yeah below market rates are awesome and family A can afford it now, but what about in 2-3 years, can they afford it THEN.


That is what they \"forgot\". just like I will probably forget that I owe NEWEGG $1,000 in December of 2009. But, the bill will jog my memory right quick, Summer of 2008, Gov'ment got the bill.

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howie_in_az
December 22, 2008 6:10 PM
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@Hank Scorpio: I'm sure he has \"no recollection\" of either.

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RandomSnax
December 22, 2008 6:04 PM
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Both Snow and Bush must have forgotten that they have brains. Greenspan too. Call in the Munshkins, we need help!

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edebaby
December 22, 2008 6:15 PM
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No, he is not incompetent.
He would like you to think so, so as to take the target off of his back for sleeping on the job.
But in all reality, he (and the Bush administration) knew precisely what was going to happen.
He now want's you to think it was an \"oversight\", or that he's some kind of dumbass. I'm not buying it.


What he did is criminal. He should be in jail.

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Mr_Human
December 22, 2008 9:30 PM
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@edebaby: That's a little nutty. So you're saying they _knew_ this was going to happen, this terrible financiapocalypse, that they actually wanted it to happen, so therefore they instituted policies to ensure a financial meltdown?

That's a bit of tinfoil hat theory, don't you think?

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HeartBurnKid, creepy morbid freak
December 23, 2008 6:01 PM
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@Mr_Human: Not really, they were just thinking the chickens wouldn't come home to roost until after Bush had gotten out of office.

And they were only 6 months off or so.

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Balentius
December 23, 2008 5:47 PM
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@Mr_Human:
\"That's a bit of tinfoil hat theory, don't you think? \"

Unfortunately, I don't see it as crazy at all - it's just gotten worse than they were thinking.

As far as I can tell, they set it up so that:
1) Encouraged companies to either ship jobs elsewhere or to focus on short term profit
2) Set up financial markets so that people would be \"investing\" in bad commodities.
3) Encouraged people that couldn't afford them to buy houses, most of them new.

So, who got rich? Bankers, investment fund managers. Who was employed (and still is in most cases) by Bush?

What conclusion can I help but come to?

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the_wiggle
December 23, 2008 5:20 AM
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@Mr_Human: perhaps, however, after enough \"oversights\" one does begin to wonder. . . .

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Rectilinear Propagation
December 22, 2008 6:54 PM
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@edebaby: I don't understand why he or anyone else would think that being incompetent should give you a pass.

If I hit someone with a car I'm pretty sure saying that I'm an incompetent driver won't keep me out of jail.

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Green Goth Brit Chick - AlternatEve
December 22, 2008 9:09 PM
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@Rectilinear Propagation: And yet they do (as witnessed this morning, car drove into a bus - no one hurt - car driver overheard telling Police \"Oh, I'm about to lose my licence anyway, so it doesn't matter that I hit that bus.\")

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Wally East
December 22, 2008 9:02 PM
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@Rectilinear Propagation: Well, accidentally killing someone with a gun while cleaning it and killing someone in a premeditated fashion do carry two different sentences.

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Eric1285
December 22, 2008 6:19 PM
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Wow, that's quite a slant on this article. The Bush administration didn't \"forget\" anything. How could anyone have predicted that the average American would have been so monumentally stupid as to sign up for jumbo size mortgages while putting down almost no money with an income of $40,000 a year? The government should not have to account for stupidity of this magnitude.

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Potatosw?tter
December 23, 2008 2:51 AM
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@Eric1285: It's obvious when all media are saturated with credit ads saying \"we don't care who you are, we just want to give away loads of cash!\" - and they're being honest. The problem here is that Dubya simply found it natural that everyone as irresponsible as himself should be as fortunate.

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Potatosw?tter
December 23, 2008 2:53 AM
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… which by the way *is* why he was elected, far as I can tell. Sorry, flame away.

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ARP
December 22, 2008 7:27 PM
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@Eric1285: So the lenders who didn't even bother to verify income are innocent victims?


If you loan a homeless guy $10,000 and he doesn't pay it back, whose fault is it? His for not paying it back or yours for loaning it to him in the first place? Who would your mother slap in the back of the head? Probably both of you.

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CumaeanSibyl
December 25, 2008 11:33 PM
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@chilled: There's one show I watch, \"Property Ladder,\" where they find the particularly outrageous examples of this and watch as the people get screwed by contractors, max out all their credit cards, and end up failing to sell the house as the carrying costs eat up what little profit they might have realized.

It frightens me to think that this show continued to find material during the first stages of the crisis, and will probably keep doing so. There's one born every minute...

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concordia
December 22, 2008 8:36 PM
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@ARP:
>Probably both of you.
If it were my mom, she'd just hit me twice for being a dumbass.

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JulesNoctambule
December 22, 2008 8:22 PM
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@ARP: I think 'Who would your mother slap in the back of the head?' is an excellent way to approach assessing a decision.

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varro
December 22, 2008 8:08 PM
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@ARP: ARP, maybe not for mortgages, but I've seen some bankruptcy clients of mine with over $10K in credit card debt who were getting $850/month of SSDI.

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dragonfire81
December 22, 2008 7:43 PM
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@ARP: you and Wagenejm are right.

This wasn't just customers making bad decisions, there was a lot of pressure tactics and unethical things done by the lenders too.

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wagenejm
December 22, 2008 6:40 PM
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@Eric1285: Even with my belief that people as a whole are stupid, people's stupidity alone isn't the root of the problem. Without the predatory lenders pushing these loans through to people who obviously couldn't handle them, the result we have now couldn't have come about.

If you present enough people with a promise that they can buy a house, then turn it for easy profit when it gains 40% value in 2 years risk-free, you will eventually find enough of them who will go along just for the chance at having more money.

Where the government is as fault is that it removed the safeguards in place that would have otherwise prevented this from happening. The market was moving along so well, the government stepped aside completely just to let it keep it's momentum. In doing so, they created a runaway train that has now crashed into the mountain.

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chrisjames
December 22, 2008 6:20 PM
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They forgot despite people telling them, almost shouting it at them, the entire time.

\"Yeah, don't listen to them all. They're the crazy ones; not us.\"

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sebadoh128
December 22, 2008 6:29 PM
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@chrisjames:


Actually...Most people were shouting, \"Yes, that's good, lend to the poor people, yes poor people deserve homes too!!! Lend more, lend more, LEND MORE\".


If you shouted, \"Don't lend to the poor people who won't be able to afford the loans, when the rate resets!\"


Then you were probably labeled a racist and dismissed, instead of being labled financially responsible.


This Monday morning Treasury Secretary stuff is Hi-larious.

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frodo_35
December 22, 2008 6:31 PM
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Redistrabution of wealth from the bottom up.Lets see we have allowed most good jobs to be shipped overseas. We are taking back the property at firesale prices( plus whatever you allready put in). Now we can price a college ed out of range besides who needs a degree to stock shelves or mow my yard. Soon you will sell me the children or take that lazy 8 year old to work in the mine with you. We are promoting family values I mean who could be closer then 16 people in that 3 bedroom rental shack. Welcome to Pottersville.

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chilled
December 22, 2008 6:33 PM
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Banksters,builders,and real estate agents are more responsible than anyone else.Just watch some of those home programs on TV where young couples are buying 1200ft bungalos for $650k and putting another 100k in improvements and expecting to make a flip.

But those granite counters are nice!

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thatsnotfab
December 22, 2008 6:33 PM
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You forgot? Well, I'll be... The solution is so clear now. We need elephants in future administrations. Lots and lots of elephants.

(sorry. my excuse for lame jokes is that it's still before noon.)

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TechnoDestructo
December 22, 2008 7:14 PM
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@thatsnotfab:

Elephants don't usually live in houses, so you can't expect them to forget that, because they wouldn't know in the first place.

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copious28
December 22, 2008 7:08 PM
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Slightly off topic, but Mr. Snow is a part of a team of lobbyists that is getting a piece of that bailout money for Chrysler. Cerberus is a super-ultra private company that has been very successful. They made a bad bet paying 7.4B for Chrysler. Here he is connected with Bush and Co, getting a handout.


They could just use their own money to restructure Chrysler.

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TurboBrick [LIGIER]
December 22, 2008 8:01 PM
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@copious28: Restructure? No no no...

a) Figure out how to pocket the money you got from the Feds
b) Take out a loan from the Chinese using any worthwile assets as collateral
c) Have Chrysler buy back all of their shares from Cerberus

d) Take whatever is left of Chrysler, fill up the motor with straight 50W, put some sawdust in the rear end and dump the POS on the Feds.

e) Run like hell.

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johnva
December 22, 2008 7:11 PM
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\"Context\" is such a weasel word in the way he's using it. What a dishonest scumbag. I don't believe for a second that this whole thing wasn't intentionally neglected, at the very least. I think they thought they could ride it out, get the credit for the boom times, and then pin the bubble bursting on a Democrat. They're still going to try, BTW, even though the bubble burst before the Democrat got into office.

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MissingPieces
December 23, 2008 5:16 PM
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@johnva: bubble busting to be left to a Dem. who was running freddie and fannie and against reeling in there insane lending practices? dodd, frank?? ring a bell? whats there party affiliation? exactly.

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johnva
December 24, 2008 3:39 PM
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@MissingPieces: Guess what? Fannie and Freddie are not the largest cause of the crisis. The largest piece of the picture is the unregulated use of credit derivatives. Please research this.

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bishophicks
December 23, 2008 4:02 PM
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@johnva:


Didn't you hear? The market sold off in October once it became clear that Obama was going to win the presidency and destroy the economy once in office.

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 10:01 PM
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@johnva: Yep, just like they agreed to remove the troops from Iraq so that the next administration couldn't claim credit for it.

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Anonymous
December 22, 2008 7:18 PM
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Well, obviously standards don't mean much anymore.The government started lowering standards to get a mortgage in the late 70's. If you allow anyone to get a mortgage then there will be issues of foreclosure. A person who makes 30,000 dollars getting a 200,000 dollar house makes no sense. How can people blame others for their mistake? There is a lack of common sense in this country.....everyone needs to read Thomas Paine's \"common sense\".

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pleeker
December 22, 2008 10:15 PM
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@MaribelDenter: Well said. Too many people think this just happened overnight, or I should say as part of the current administration. But it goes way back.

Here's a NYTimes article from 1999:

[query.nytimes.com]

\"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers.\"

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ironchef
December 23, 2008 1:04 AM
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@pleeker: well it wouldn't be a problem if it wasn't for the exorbitant balloon rate for ARM built in to many of these toxic loans. Fixed rate mortgages aren't the ones causing all the defaults.

Fannie did try to make it affordable yes. But all those loan originators who pushed easy loans with toxic ARM clauses are really the ones to blame.

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holocron
December 22, 2008 7:39 PM
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D'oh!

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JadoJodo
December 22, 2008 7:48 PM
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Out of context:

- \"The Bush administration took a lot of pride that homeownership had reached historic highs...\" -

Indicating the President and his administration were proud of the fact that home-ownership reached a high during the time he was President.

- \"...But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost.\" -

However, the President and his administration are not proud of the fact that a number of home-owners are living outside of their means and had to to become home-owners.

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MooseOfReason
December 22, 2008 9:08 PM
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Seems Consumerist is agreeing with The New York Times: \"It's all Bush's fault.\"

Right, I'm sure Democrats had nothing to do with it.

The Democrats were the reason the bailout passed. No strings attached. I guess they \"forgot\" banks wouldn't report back to them what was done with billions in taxpayer money if they weren't supposed to.

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failurate
December 22, 2008 9:14 PM
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@MooseOfReason: I think you missed the point of the article. Think pre-bailout.

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MooseOfReason
December 24, 2008 6:31 AM
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@failurate: Failurate, What about the people making the purchases?

Shouldn't they have known not to buy something they didn't have enough money for?

And the Federal Reserve inflating the money supply and making people think they could have a free lunch.

And Fannie Mae and Freddie Mac being government sponsored enterprises (GSE) instead of being private companies. The government doesn't have the authority to provide mortgages. Nor can they run a business efficiently.

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chauncy that billups
December 22, 2008 10:05 PM
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@failurate: Who's to say he isn't thinking \"pre-\"bailout? Barney Frank, Chris Dodd, Maxine Waters, Franklin Raines, Jim Johnson, Jamie Gorelick: All democrats, all with dirty, dirty dirty hands in this mess. These were the guys in 2005/2006 who were insisting that there was no need for further oversight for fannie and freddie, that more regulation would just prevent (unworthy) buyers from obtaining loans - something that is anathema to a doctrine that believes home ownership is a right. This stuff is all public record. You can hear Barney Frank IN HIS OWN WORDS essentially implicating himself on youtube.

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goodpete
December 22, 2008 9:10 PM
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The government continues to \"forget\" that people need to afford their houses. All this talk of bailing out individual mortgages seems to further that bout of \"forgetfulness.\" As a liberal Democrat, I feel I should be all about a bailout for individual homeowners. But I can't help but think that it should only apply to people who either (1) had a recent reduction in income, or (2) recently lost their job.

The idea that a bank would give someone who makes $30,000 a year $300,000 to buy a house is bad enough. But the idea that the government would step in so that said person could KEEP that house is just insane.

I make enough money to buy a house. I bought a house I could afford. The idea that my tax dollars should be used to pay my neighbor's mortgage just because he or she got a house they couldn't afford is just a little too socialist... even for me.

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quail
December 22, 2008 9:52 PM
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Funny, but my grandad told the story of how his dad blamed the college educated kids for the great depression. Every hour of book learning you had, he'd say, you should have 2 more in the real world.

Wonder if the Bush Wunderkinds would carry the view that everyone needed to own a house if they'd spent years working as a building's super.

Didn't anyone raise an eyebrow when people were able to get mortgages when they didn't even qualify to rent an apartment? Or when home equity loans ads were played right after the ones for personal injury lawyers?

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 9:59 PM
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The \"American Dream\" of owning a house is bullshit.

Your average American House RIGHT NOW costs a little bit more than 190,000 dollars.

In order to afford the mortgage payment (according to bankrate.com) taking into account paying money into savings monthly, a car payment, and other expenditures (I.E. living within your means), you have to make upwards of $65k a year. Which, for most college grads and people who've even been in their fields for a few years is ludicrous.

These people who purchased $400,000 homes - they better be millionaires, because its the only way they're gonna be able to pay off that house - unless they're seriously frugal.

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Oranges w/ Cheese hates what Christmas has become
December 22, 2008 10:00 PM
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@Oranges w/ Cheese: I mean, I'm sitting at 24 years old, making $30k and realistically - I'm never going to be able to own a home. By the time I'm making a decent wage, the homes will be back at half a mil for a 3/2 and I'll have to keep renting for the rest of my life. It sad, and stupid.

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loueloui
December 23, 2008 11:02 AM
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@Oranges w/ Cheese: My wife and I paid $179K for our home. This is far less than we qualified for. We also saved, and worked very hard for it. It wasn't our first choice of area, and we really wanted a lot more stuff, but in the end fiscal responsibility won out. If you do the same you will be okay.


Unless you live in an area where housing has historically been very expensive I would say you have a decent shot. Honestly, 30K isn't a lot, but respectable. It's a lot more than I made when I was 24 (1999 in case you're wondering).

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Eyebrows McGee (now with more baby!)
December 22, 2008 10:08 PM
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John Snow makes Alexander Hamilton cry.

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Potatosw?tter
December 23, 2008 2:57 AM
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@Eyebrows McGee: Baby alexander hamilton? Every time a mortgage is paid off, a learjet gets its wings…

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johnva
December 22, 2008 11:09 PM
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@Mr_Human: Well, for starters, Chrysler is getting a government bailout, and he is going to personally benefit from that. That's a direct result of this crisis.

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kwsventures
December 23, 2008 12:47 AM
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Snow is the chairman of a private equity fund that gets taxpayer bailout money. Now, why does a private equity fund/hedge fund with lots of deep pocket investors get tax payer bailout money? What a racket. I knew when the bailouts started lots of cockroaches with tin cups would be looking to game the system.

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Potatosw?tter
December 23, 2008 2:48 AM
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Well, when you own a dozen houses, you figure some of them should trickle down!

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Keter
December 23, 2008 5:34 AM
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I worked with a guy who bragged on having a net worth of over a million dollars. What he meant was that he owned five houses, only three of which were rented out for enough to cover the payments. Yes, all were fully mortgaged, so he didn't \"own\" anything, really. When all five were taken together, he had a net negative. He's over-leveraged and will lose it all, it's just a matter of time.

Yet he scoffed at me for having a home half paid for, no other debts, and liquid assets in the credit union. And this guy bragged about being a genius just like our bankster friends. Newsflash, \"geniuses\" - your reality checks just bounced and you - and your fancy schmancy degrees - are obsolete.

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OprahBabb
December 23, 2008 9:24 AM
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Doesn't \"homeOWNERSHIP\" imply that the \"owner\" would have to be able to afford the \"home\"? Wait, wait...by the look on your face I think I lost you. I'll start over....

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cellochick
December 23, 2008 5:33 PM
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I'd love to see a homeownership rate that took equity into account, though that would obviously be very difficult and tedious to do. But if I'm living in a $300,000 house and only have $30,000 equity in it, the bank owns that house more than I do, really. I'd be curious to know whether the rate of occupancy of non-mortgaged dwellings (i.e. people who paid in cash or had already paid off the mortgage on their primary dwelling) declined or remained about the same.

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banmojo
December 23, 2008 9:11 PM
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When will people stop looking to the government to solve their problems for them and take responsibility for making wise decisions for themselves? I'm so sick and tired about this bullshit. Whine whine whine, I bought too much house and am going to lose it, whine whine. With a MINIMUM of research on the internet anyone who can read and understand an 8th grader's logic can figure out whether they should rent or buy, and if buying what cost range they can afford, and also where they can get the best loan, and what kind of loan that will be.

Sheople - stop looking to Uncle Sam for your financial bliss and get off your LAZY SELF CHOSEN STUPID ASS and get it for yourself.

And if you don't, don't come around expecting hard working people like ME to pay for your LAZY ass.

No way, no how, that's why I didn't vote for nObama, and that's why I'm conservative for life.

KMA.

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Mario Tate
December 26, 2008 2:37 PM
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No No No, these guys were not that strupid, do not let them switch the story on you, they came into the wWite House and listened to no one because they stated over n over again that they ACTUALLY DID KNOW WHAT THEY WERE DOING, and til this day I believe they did know what they were doing, they hoodwinked people intentionally and allowed them to be fooled by savy brokers and salesmen, who had only a weakened regulatory authority to contend with. Some buyers were dumb, but really more brokers and bankers were crooked and complicit with this corruption, they wanted the money from THE sales and that was all they cared about, now the whole world is in free fall, no they were not that dumb, they were that corrupt from the begining
SEND THEM ALL TO JAIL.

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Sharen Keim
January 20, 2009 4:07 AM
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Alan Greenspan wrote in his book The Age of Turbulence, \"I was aware that the loosening of mortgage credit terms for subprime borrowers increased financial risk, and that subsidized home ownership initiatives distort market outcomes. But I believed then, as now, that the benefits of broadened home ownership are worth the risk. Protection of property rights, so critical to a market economy, requires a critical mass of owners to sustain political support.\"


Note that last sentence. The whole idea of Bush's \"ownership society\" was supposed to be egalitarian, and many non-egalitarians condemn it as an overly idealistic attempt to be egalitarian. Yet actually, the whole idea of the ownership society, is a the-people-will-vote-for-ownership-society. This was a Machiavellian choice to put everyone at great risk, so that the propertied would hopefully get more political support!!!!! And the extent of that risk should have been obvious!

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