Deadbeat homeowners who weren’t making payments on their mortgages are receiving a bailout. Yes, you read that correctly.
Check out this piece from Charles Gasparaino on the matter:
It’s hard to imagine a less-deserving group of victims: people who gambled during the housing bubble by purchasing homes with borrowed money that they knew or should have known they couldn’t afford, but who are now able to stay in the homes they should have never bought because of what amounts to paperwork errors on the part of the nation’s big banks.
But that’s essentially what went down yesterday, thanks to the Obama administration’s latest re-election gimmick — the nationwide mortgage-foreclosure settlement.
Everyone — from the president, to officials at the Department of Housing and Urban Development, to at least some of 49 state attorneys general who cobbled together the pact, including New York’s Eric Schneiderman — took the all-too-familiar class-warfare route in selling the deal to the public and national media. They’d like us to believe that the nation’s largest banks are finally paying for their bad behavior during the housing bubble and its aftermath, when millions of Americans either lost or were in jeopardy of losing their homes.
That’s because the banks will cough up $26 billion for various abuses, including illegal foreclosures. Many “victimized” home-owners will get relief, mostly in the form of refinancing of underwater mortgages. So, they can stay in their homes, at least for a while.
It’s such a win-win, the administration is boasting, that even those people not part of the specific victimized class will benefit because the deal creates a stronger housing market. If banks can’t foreclose on properties, the theory goes, they can’t depress housing prices more by selling these properties on the cheap.
Problem is, almost all of the “logic” behind the deal isn’t logic, but a combination of half truths and outright lies. Even worse, the settlement will likely prolong the housing slump and set the stage for it to happen again.
CONTINUED:
http://www.nypost.com/p/news/opinion/opedcolumnists/deadbeat_bailout_LBRdYWq9BHXu4kIFTgHL1M
Showing posts with label banks. Show all posts
Showing posts with label banks. Show all posts
Saturday, February 11, 2012
Friday, April 1, 2011
NO JOKE: FOREIGN BANKS TOOK MOST FROM FED; BERNANKE KEPT SECRET!!
U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
READ MORE: http://randysright.wordpress.com/2011/04/01/no-joke-foreign-banks-took-most-from-fed-bernanke-kept-secret/
READ MORE: http://randysright.wordpress.com/2011/04/01/no-joke-foreign-banks-took-most-from-fed-bernanke-kept-secret/
Thursday, February 17, 2011
Randy's Right
What Happens When the Banks Close Their Doors By David DeGerolamo
The following articles dealing with banks are all less than three weeks old. While we are focusing on the emergence of “Democracy” in Egypt, a global financial collapse is ignored and our stock market seems to be unstoppable even though the daily trading volume is less than half what it was in 2008. Spain, Portugal, Italy and Iceland banks were not included below since their bank crisis is well documented. I included Ireland to show the relationship between bank failures and elections. The cost of food and energy becomes irrelevant when the banks close their doors.
http://randysright.wordpress.com/2011/02/17/what-happens-when-the-banks-close-their-doors-by-david-degerolamo/
The following articles dealing with banks are all less than three weeks old. While we are focusing on the emergence of “Democracy” in Egypt, a global financial collapse is ignored and our stock market seems to be unstoppable even though the daily trading volume is less than half what it was in 2008. Spain, Portugal, Italy and Iceland banks were not included below since their bank crisis is well documented. I included Ireland to show the relationship between bank failures and elections. The cost of food and energy becomes irrelevant when the banks close their doors.
http://randysright.wordpress.com/2011/02/17/what-happens-when-the-banks-close-their-doors-by-david-degerolamo/
Friday, November 5, 2010
From Tea Party Nation "Moment of Clarity"
Self-Inflicted
Posted by Tim Nerenz on November 4, 2010No, my dear Democrat friends, it wasn’t secret money from overseas, or the media failure to explain health care, or talk radio hosts, or Fox News, or the racist tea parties, or Americans for Prosperity that cost you the election today – you did this to yourselves.
It started with the TARP bank bailouts; the American people were 8:1 opposed and you passed it anyway – twice. Then the stimulus; overwhelmingly opposed but you passed that, too. Then you hosed the bond-holders and gave GM and Chrysler to the unions – they took our $50 billion and went bankrupt anyway. Don’t forget foreclosure relief that let people default twice on our nickel – it was the bankruptcy attorneys that loved you for that one, not us.
And then there was health care; you had three chances to bail out with dignity but you rammed it down our throats instead. You threatened to "deem it" if you couldn’t get the votes, even though two thirds of the American people were against your bill – a bill so ridiculous you had to pass it to learn what was in it. Just to rub it in, you nationalized student loans in an 11th hour amendment.
Next came the BP oil spill; three months of looking around for an ass to kick but having no trouble finding the right one to kiss – preventing foreign assistance to please your union masters again. And then there was the bailout of the teachers’ unions – overriding every single school board and state department of education in the nation who had not seen fit to raise compensation in a fiscal crisis.
Should I go on? Cap and Trade, Cash-4-Clunkers, the President’s 60 rounds of golf, Michelle’s Spanish vacation, your two any-gal-will-do Supreme Court appointments, tanking the Fed audit, suing Arizona, ACORN’s hidden camera fiasco, letting the Black Panthers walk, re-appointing Ben Bernanke, and the internet kill switch.
You adjourned your session, allowing the largest tax increase in the history of the world to take effect without the courtesy of a vote. You failed to adjust the AMT in your haste to hit the campaign trail. You offered a $250 check to seniors after you gutted their Medicare and hit them with a 55% inheritance tax – as if you could bribe the Greatest Generation anyway.
Your economic plan was worse than nothing. 15 million Americans are out of work, 9 million more are underemployed, and another 1.2 million have quit looking altogether. Home values are falling, the dollar is falling, real GDP is falling; the only thing going up is gold, unless you count the national debt and the number of troops you keep sending to a war you don’t know how to win.
You called us racist. You called us dumb. You called us enemies, hicks, astro-turf, the great unwashed. You made fun of our reverence for the Constitution and our commitment to our faiths. You don’t like our guns, our trucks, our groceries, our hobbies, our rallies, our Facebook Pages, or our women who think for themselves - witches, bitches, and whores, you called them. You hate it when we prosper, and you hate us when we speak our minds.
How could you possibly expect that we would vote for you after all that? No, seriously – did you really think we would reward you at the polls? Did you?
Your wounds are all self-inflicted. You turned the Democratic Party of JFK into the Social Democrat Party of Dean, Pelosi, Obama, Frank, Klugman, and ACORN. You turned government into an ultimatum and we picked "or else". You tried to make America into France, so we said, "au revoir". You thought your ends justified your means, so we introduced you to our ends. That’s what happened today - it wasn’t done to you by anyone else, you did it to yourselves.
The coalition of conservatives, libertarians, constitutionalists, and independents that purged unprincipled Republicans in the primaries and cleansed the Congress today will not go lay by our dish just because Nancy Pelosi has been dethroned. Our mission did not end yesterday, it has only begun.
So my advice to all of the new Republican members of the next Congress is this: don’t sign a three year lease on that townhouse in Georgetown. Do what we sent you to do and you will be re-elected; if not, then you will be tossed onto the gut-pile of phonies who say one thing to get our vote and then do another once they are in Washington.
You guys work for us, not the other way around. We fired the Republicans in 2006; they brought it on themselves. And we fired the Democrats today; they brought it on themselves. Here’s a tip: if you want to avoid being on the receiving end in 2012, try being a little nicer to the boss.
You have four jobs to do: revive the economy, revive the economy, revive the economy, and revive the economy.
You have just seen four years of what not to do from Nancy Pelosi, George W. Bush, Ben Bernanke, and President Obama. If they passed it, repeal it; if they raised it, cut it; if they banned it, liberate it; if they were for it, don’t do it; if they were against it, then let ‘er rip.
Yes, it is that easy. We did our part, now go do yours.
"Moment Of Clarity" is a weekly commentary by Libertarian writer and speaker Tim Nerenz, Ph.D. Visit Tim’s website www.timnerenz.com to find your moment and order his new book, "Tooth Fairy Government."
http://www.teapartynation.com/profiles/blogs/selfinflicted-1
Tuesday, September 7, 2010
Campaign for Liberty
Reality Economics, By Lew Rockwell
September 7, 2010
As a culture, we like our reality on television, but seem to oppose it in economics.
For more than two years now, and even longer depending on your dating scheme, the federal government has waged war on the reality of the incredible Fed-fueled bubble that developed in housing with spillover effects on the rest of economic life.
That bubble had to explode to restore some sanity to the economic environment. There is no getting around that. The policies were all about trying to paper over what we did not want to deal with as facts. But the facts won't go away.
Do we have to make a television show to get Washington to see it?
The FDIC has admitted that some 829 banks remain at risk of failure. That's one in ten. Only 118 have failed this year but many more should have and would have absent Fed intervention. Meanwhile, there are no new banks started in the U.S. in the last quarter -- the first time in 38 years that this has been true. As for the actual soundness of the banks, it's anyone's guess. How much bad debt they are carrying, with both lenders and borrowers agreeing to look the other way, is something that no one wants to know.
Then there is the other topic that no one wants to talk about: house prices. They need to fall more. Washington has attempted to prop them up with some 18 different programs from mortgage buyouts to tax schemes. It delayed the fall of prices for a time. But they have begun to fall again, exactly to the point where nature wants to take them.
The problem is that you can't artificially boost both supply and demand at the same time. If you subsidize housing construction and that results in more houses being built, you apply downward pressure on the prices of houses that are currently on the market. If you subsidize house buying, you also promote house selling, allowing the reality of the real estate glut to express itself in home prices.
There is no way that the central planners can get around this problem unless they both build and buy houses themselves and leave the rest of us out of it. That might help prettify the housing data but it does nothing to change market realities. Merrill Lynch, in fact, has published a report that suggests that the housing glut will not normalize for another five years and that assumes some reasonable slowdown in the pace of building.
Already the government has done everything in its power to override market signals, at the same time it is attempting to make market signals operate in a way that conforms to political priorities. The problem is that you can't do both. You have to either defer to the market or abolish it.
The same is true with unemployment rates, which are stubbornly high. Now, what does it tell you when there is a surplus of workers relative to the number of job opportunities? It means that in some sectors, jobs are selling at too high a price. There are fixes for this. You can lower the minimum wage, reducing the cost of hiring, or workers can lower their reservation wage.
As it stands, Washington is doing nothing to encourage any of these fixes, so of course unemployment remains very high. Many young people have actually removed themselves from the market by going back to school to avoid paying their student loans. The state universities are glad to take their money.
A good indicator of future business conditions is commercial and industrial loans. They continue to fall as if off a cliff. How does the Fed deal with this? By keeping rates as low as possible on the short end, so that way banks have nothing to gain by lending and consumers have nothing to gain by saving. Not smart.
Meanwhile long-term rates are being held down by the existence of a too-big-to-fail doctrine for mortgage-holding companies like the nationalized Freddie Mac and Fannie Mae. In a real market, there is no telling where rates would be, but they would be high enough to compensate for risk. When there is no risk, or that risk is socialized, you see the absurd scenario of falling rates during the largest mortgage crisis in American history.
A major difference between now and the 1930s relates to the standard of living of consumers themselves. Everyone is still shopping, still living high on the hog, still going out to eat, still spending lavishly. But how and why? The answer is consumer credit, which is down but not nearly in proportion to the fall in economic prospects.
Such opportunities didn't exist in the 1930s. People had to live within their means. Today we can all just go on fooling ourselves for as long as possible.
Do we even want to raise the ghastly subject of government finance? Let's not go there.
Suffice it to say that the entire system today is shot through with artifice that just can't last. What are we to do about it? The present course is going to drive us further and further into disaster. The only real answer was stated by Ludwig von Mises in 1931, in an essay in the book The Causes of the Economic Crisis.
Mises wrote in 1931 as follows, and there is really nothing to add to his analysis:
"The severe convulsions of the economy are the inevitable result of policies which hamper market activity, the regulator of capitalistic production. If everything possible is done to prevent the market from fulfilling its function of bringing supply and demand into balance, it should come as no surprise that a serious disproportionality between supply and demand persists, that commodities remain unsold, factories stand idle, many millions are unemployed, destitution and misery are growing and that finally, in the wake of all these, destructive radicalism is rampant in politics.
"The periodically returning crises of cyclical changes in business conditions are the effect of attempts, undertaken repeatedly, to underbid the interest rates which develop on the unhampered market. These attempts to underbid unhampered market interest rates are made through the intervention of banking policy -- by credit expansion through the additional creation of uncovered notes and checking deposits -- in order to bring about a boom.
"The crisis under which we are now suffering is of this type, too. However, it goes beyond the typical business cycle depression, not only in scale but also in character -- because the interventions with market processes which evoked the crisis were not limited only to influencing the rate of interest. The interventions have directly affected wage rates and commodity prices, too....
"All attempts to emerge from the crisis by new interventionist measures are completely misguided. There is only one way out of the crisis: Forgo every attempt to prevent the impact of market prices on production. Give up the pursuit of policies which seek to establish interest rates, wage rates and commodity prices different from those the market indicates. This may contradict the prevailing view. It certainly is not popular. Today all governments and political parties have full confidence in interventionism and it is not likely that they will abandon their program. However, it is perhaps not too optimistic to assume that those governments and parties whose policies have led to this crisis will some day disappear from the stage and make way for men whose economic program leads, not to destruction and chaos, but to economic development and progress."
Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.
September 7, 2010
As a culture, we like our reality on television, but seem to oppose it in economics.
For more than two years now, and even longer depending on your dating scheme, the federal government has waged war on the reality of the incredible Fed-fueled bubble that developed in housing with spillover effects on the rest of economic life.
That bubble had to explode to restore some sanity to the economic environment. There is no getting around that. The policies were all about trying to paper over what we did not want to deal with as facts. But the facts won't go away.
Do we have to make a television show to get Washington to see it?
The FDIC has admitted that some 829 banks remain at risk of failure. That's one in ten. Only 118 have failed this year but many more should have and would have absent Fed intervention. Meanwhile, there are no new banks started in the U.S. in the last quarter -- the first time in 38 years that this has been true. As for the actual soundness of the banks, it's anyone's guess. How much bad debt they are carrying, with both lenders and borrowers agreeing to look the other way, is something that no one wants to know.
Then there is the other topic that no one wants to talk about: house prices. They need to fall more. Washington has attempted to prop them up with some 18 different programs from mortgage buyouts to tax schemes. It delayed the fall of prices for a time. But they have begun to fall again, exactly to the point where nature wants to take them.
The problem is that you can't artificially boost both supply and demand at the same time. If you subsidize housing construction and that results in more houses being built, you apply downward pressure on the prices of houses that are currently on the market. If you subsidize house buying, you also promote house selling, allowing the reality of the real estate glut to express itself in home prices.
There is no way that the central planners can get around this problem unless they both build and buy houses themselves and leave the rest of us out of it. That might help prettify the housing data but it does nothing to change market realities. Merrill Lynch, in fact, has published a report that suggests that the housing glut will not normalize for another five years and that assumes some reasonable slowdown in the pace of building.
Already the government has done everything in its power to override market signals, at the same time it is attempting to make market signals operate in a way that conforms to political priorities. The problem is that you can't do both. You have to either defer to the market or abolish it.
The same is true with unemployment rates, which are stubbornly high. Now, what does it tell you when there is a surplus of workers relative to the number of job opportunities? It means that in some sectors, jobs are selling at too high a price. There are fixes for this. You can lower the minimum wage, reducing the cost of hiring, or workers can lower their reservation wage.
As it stands, Washington is doing nothing to encourage any of these fixes, so of course unemployment remains very high. Many young people have actually removed themselves from the market by going back to school to avoid paying their student loans. The state universities are glad to take their money.
A good indicator of future business conditions is commercial and industrial loans. They continue to fall as if off a cliff. How does the Fed deal with this? By keeping rates as low as possible on the short end, so that way banks have nothing to gain by lending and consumers have nothing to gain by saving. Not smart.
Meanwhile long-term rates are being held down by the existence of a too-big-to-fail doctrine for mortgage-holding companies like the nationalized Freddie Mac and Fannie Mae. In a real market, there is no telling where rates would be, but they would be high enough to compensate for risk. When there is no risk, or that risk is socialized, you see the absurd scenario of falling rates during the largest mortgage crisis in American history.
A major difference between now and the 1930s relates to the standard of living of consumers themselves. Everyone is still shopping, still living high on the hog, still going out to eat, still spending lavishly. But how and why? The answer is consumer credit, which is down but not nearly in proportion to the fall in economic prospects.
Such opportunities didn't exist in the 1930s. People had to live within their means. Today we can all just go on fooling ourselves for as long as possible.
Do we even want to raise the ghastly subject of government finance? Let's not go there.
Suffice it to say that the entire system today is shot through with artifice that just can't last. What are we to do about it? The present course is going to drive us further and further into disaster. The only real answer was stated by Ludwig von Mises in 1931, in an essay in the book The Causes of the Economic Crisis.
Mises wrote in 1931 as follows, and there is really nothing to add to his analysis:
"The severe convulsions of the economy are the inevitable result of policies which hamper market activity, the regulator of capitalistic production. If everything possible is done to prevent the market from fulfilling its function of bringing supply and demand into balance, it should come as no surprise that a serious disproportionality between supply and demand persists, that commodities remain unsold, factories stand idle, many millions are unemployed, destitution and misery are growing and that finally, in the wake of all these, destructive radicalism is rampant in politics.
"The periodically returning crises of cyclical changes in business conditions are the effect of attempts, undertaken repeatedly, to underbid the interest rates which develop on the unhampered market. These attempts to underbid unhampered market interest rates are made through the intervention of banking policy -- by credit expansion through the additional creation of uncovered notes and checking deposits -- in order to bring about a boom.
"The crisis under which we are now suffering is of this type, too. However, it goes beyond the typical business cycle depression, not only in scale but also in character -- because the interventions with market processes which evoked the crisis were not limited only to influencing the rate of interest. The interventions have directly affected wage rates and commodity prices, too....
"All attempts to emerge from the crisis by new interventionist measures are completely misguided. There is only one way out of the crisis: Forgo every attempt to prevent the impact of market prices on production. Give up the pursuit of policies which seek to establish interest rates, wage rates and commodity prices different from those the market indicates. This may contradict the prevailing view. It certainly is not popular. Today all governments and political parties have full confidence in interventionism and it is not likely that they will abandon their program. However, it is perhaps not too optimistic to assume that those governments and parties whose policies have led to this crisis will some day disappear from the stage and make way for men whose economic program leads, not to destruction and chaos, but to economic development and progress."
Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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