i am all for the government helping out the poor.

Funny though - what a freeking lemming you are Mark. In your eyes Bush is never ever wrong. If Bush had not done this - you would have praised him as well. You know - you can disagree with our dear leader...

Yah, we love you too LiberalT. Dip-wad.

Bush’s bailout plan is pure politics; it’s a move to take the issue away from the democrats by trying to out-sympathy the party of “I feel your pain."

Read Bernanke’s address at the Federal Reserve May 17. Sub-Prime’s have been around since 1998, and the default rate among sub-prime is consistent with historic default rates. Another government bailout only perpetuates the risky borrowing behavior and greedy lending behavior that is the hallmark of sub-prime. Factually, if lending institutions had kept to their own standards and conditions, many of the sub-prime borrowers would have never been borrowers to begin with. Further, many risky borrowers; the majority by the way, are current with their loans and are in no threat of default.

This may be an “honorable” thing to do, but God save us from such honorable men.

Blockhead (liberalT), if you have nothing to say, STFU!

The difference with cycle is a majority of the sub-primes were repackaged with AA+ ratings and quite a few fund managers bought them up. The defaults are going to have a greater impact this time around.

What I do find ironic: earlier this year quite a few people were CROWING over the fact that home ownership was at an all time high.

Now we come to see it was just a house of cards built on the foundation of non-conforming loans.

As bad as I feel for the sub-prime (and quite a few A paper/Alt A) borrowers, they made a gamble with an adjustable rate and lost. They should live with it.

Where I do draw the line are the ones that were deceived by mortgage brokers. Maybe a little bit more of oversight would have helped.

I know this is an exercise in futility but … what proof do you have that sub-prime borrowers are “the poor”?

tevocar,
Put it in perspective; sub-prime accounts for 15% of the market, of that 45% are adjustable rate loans (ARM's), that puts roughly 7½% in jeopardy. Even if all of these were subtracted, which they won’t be, home ownership would still be at record levels.

btw, I stand corrected, subprime has been around a lot longer than 1998; in fact it "gained popularity in the early 1990's"

I can not believe the free marketeers on this site believe this bailout is a good thing? I would have to agree with, Bane to the libs existence, this is wholly politcal.

I know this is an exercise in futility but … what proof do you have that sub-prime borrowers are "the poor"?

Depends on what you mean by "poor". According to this article:

"Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio."

Home ownership in turn means having a mortgage, some of which will surely fall into the "sub-prime" category. This does not mean that sub-prime borrowers "are" the poor, but that some of them are likely people that are classified as poor by our government.

DL, I know I'm not the person you asked, but I thought I'd offer a bit of perspective.

Bigfoot,
Thanks for that. if I may, in turn many of the "poor" are homeowners that are not at risk or jeopardy of default. A $30,000 income can buy a nice house in Casper and many residents in Casper making $30,000 have good or excellent credit.

Many of the sub-prime are risky because they have high income to debt ratios; a history of shaky credit; and high turnover of employment. None of these necessarily characteristics qualify them as poor. More likely, it's the two Humvees and 180" Plasma Screen TV that qualifies them as a poor credit risk.

Therefore, by definition this is not a government [program for] helping out the poor.

Cheer up, sleepygene ... (I can't believe I wrote that) true fiscal conservatives will show up here sooner or later and support my contention that this is political, wrong-headed, and potentially disastrous (see: S&L bailout 1980's).

Dasein I am not sure what universe you live in.
In our universe the facts are very straight forward an easy to obtain:
http://money.cnn.com/2002/05/01/pf/banking/subprime/

for example and many others which are not hard to find. Subprime loans are highest amongst minorities and the poor.

Of course - that is not to say that the very wealthy do not do it either - but they are obviously not in trouble

How is this not a bail out? This plan would allow the Federal Housing Administration to waive the current 3 percent equity requirement and allow it to insure mortgages that exceed the market value of the home. This means the government will refinance your 200 thousand dollar loan on your now valued at 150 thousand dollar house. Walk out of the loan and the government just took a 50 thousand dollar hit. Anyways just because the government may not take a direct loss doesnt mean its not a bailout. Think opportunity cost. If the government refinances your loan at some interest rate when it could for example pay off some debt with that money at a greater interest rate then it is loosing money.

"for example and many others which are not hard to find. Subprime loans are highest amongst minorities and the poor.

Of course - that is not to say that the very wealthy do not do it either - but they are obviously not in trouble"

"i am all for the government helping out the poor."

How many "poor" people do you know that live in houses. I don't have a house because I cannot afford one. Am I poor? No, what I am is not stupid. I dont have a house because I know I couldn't pay the mortgage payments. Maybe when I save up several thousands of dollars so I can pay a good chunk of the principal in a down payment I will buy a house. I will definatly wait till I can afford it. This is a bail out, not for the poor, but for the stupid and the greedy. Many of the people who will be bailed out are speculators who bought a second house to flip and had the values drop on them soon afterwards. You know what would fix this whole problem from happening again?? Have the federal government and the federal reserve do NOTHING!

Subsidize bad decisions.
Make bad decisions drag everyone down rather than just the ones that made them.

I hope we get a fiscal conservative president on day.

Mark you stated "I've been sending missives to management ................... It has been an exercise in pointlessness because, like all large corporations, everyone is afraid to make decisions"

Mark, you don't worry that some company honcho would take exception to your critical statement about top managemenr and get right vindictive?

Blockhead,
Once again, you incredible nincompoop, you prove you cannot read, know absolutely nothing about economics and are driven by an illogical ideological hatred.

Your article from May 2002 only shows that maybe 40% of loans sub-prime were in “lower incomes” with no qualification as to what "lower" means, and 60% are of moderate or wealthy means. It does not state or imply to whom the defaults are attached, and it sure as hell doesn't say that sub-prime borrowers are "the poor".

Further, you now stipulate that it’s “minorities and the poor” that will benefit from a government bailout; in addition to being a moron, you’re a racist. Nice!

Spook's first rule of holes!

Spook's first rule of holes!

Well, Bane, I can't really take credit for it, I just tend to invoke it whenever it applies, which, as you so astutely point out, it does in Blockhead's case. I wonder if she speaks Chinese.

sigh. Do you F*CKING UNDERSTAND ANYTHING. Learn how to read a graph. It shows in fact that most of these loans go to the poor and minorities. Perhaps I need to come read it to you ? I can't believe you work in finance - difficult to believe

liberalT, do you know why? It's becuase of organisations suing and threatoning to sue mortage companies because they don't give enough morgages to poor people, who clearly can't afford those loans. This is just another example of the insanity of the left.

“Poor and minorities” As if they are the same, nit-wit!

It doesn’t show any such thing; the chart shows that almost 60% of “low income” blacks that refinance receive sub-prime loans. It shows that 30% of “upper-income” blacks that refinance receive sub-prime loans. The chart shows no correlation between poor subprime and default. There are no quantities for each sub group, there are no qualifiers for the lower, middle and upper indices, and there is no indication that the percentages from one income level to another is in anyway relative.

The text incorrectly states that “lower-income African-Americans receive 2.4 times as many subprime loans as lower-income whites” but, that would only be true if the number of blacks and whites receiving loans are the same. Because the chart is clearly labeled as “percent of Loans Subprime across all MSAs”

This is why companies use charts and graphs to sell their products; pathetic simple-minded dolts like this believe what they see without understanding the information.

Once again, poor research, little or no understanding and emotional reasoning. What a wretched creature you truly are.

Well, another fiscal conservative has shown up to spout off about this.

I do not agree with the government interfering in this situation. The markets (like nature) have an incredible ability to sort themselves out naturally and without outside intervention. All this political action does is distort the natural ability of a market to correct itself.

Furthermore, this kind of government activity continues the erosion of an individual's obligation to self responsibility and stewardship.

Unprotected sex? Pregnant? Who cares? The government will rid me of my "problem"!

No job? No desire to work? Who cares? The government will provide me with food stamps and money to live on!

Risky home financing? Who cares? The government will bail me out if something bad happens!

Woo Hoo let the good times roll!!!

Just wait until you see what happens when the government nationalizes healthcare... (hint: take a look at our northern neighbors). In Canada, when the going gets tough, the citizens shrug their shoulders and ask, "what is the government going to do about this?"

Spook,
On my wall is a framed quote,

"More Can be Accomplished if No One Cares Who Takes the Credit”

I often tell people that it’s my quote; I said it. You’d be surprised how many people don’t see the irony of that statement.

.....poor research, little or no understanding and emotional reasoning.....bane

This is probably the best, and most concise definition of a liberal I have ever read. May I use it?

As bad as I feel for the sub-prime (and quite a few A paper/Alt A) borrowers, they made a gamble with an adjustable rate and lost. They should live with it.

Wow, is the moon full tonight? I finally agree with stevomoron for once. Of course, most of the rest of his post is b/s aimed at the economy. But hey, at least he's finally made sense for once. One out of a million ain't bad, huh stevo?

btw, stevo, have you "consulted" the FBI to arrest Ted for his "threat" against Her Thighness and Earbama? lol...

Libsbane,

I completely agree with you on this topic apparently. I actually really like how Bernanke is handling this situation... by saying that the FED shouldn't bail out anyone who screwed themselves over... :-)

Neocon,
How right you are, emotional reasoning is a form of cognitive dissonance or distortion whereby the liberal rules out all information not consistent with her beliefs. It also refers to guessing in place of rational thought when beliefs and feelings are threatened with logic.

Rana,
Thanks, makes me feel warm and fuzzy all over to know we're simpatico! YOU an' ME an' GOP! Cozy, huh? Ố¿Ổ¬

No - you are just completely wrong.

If you read the text and the graph it clearly shows the trend I indicated. The graph shows the percentage of loans to different groups divided in racial and economic groups. The left shows the percentage of loans which are subprime to lower income people and the right to upper income people. Clearly the percentage of loans to lower income people that are subprime are higher.

Its not that I don't understand or do research - its that you just dismiss anything that doesn't fall under your preconceived notions of the world.

You should try reading Dick and Jane first - obviously this is to complicated for such a simple mind as yours

liberalT, even if these people are poor, why do these people deserve everyone elses money? I can understand the liberal want to help people that are hurt by an act of God, like natural disaster, disease or being born into poverty, but these people made a concious decision, they knew there was some risk. They took a gamble when they chose an adjustable rate, if I lose half my paycheck playing poker and can't pay my bills, it's not much different. Why should everyone suffer for one persons bad risky decision?

And why should I help pay for someone else's house before I even have my own? Many of the people that will be paying the taxes to cover these cost don't even own their own houses.

Anyways the houses wouldn't disapear, they would go down in price and be made available to even poorer people, except since those morgage backed securities won't be selling for a while, they would probably have far better credit.

Spook,

What's this "first rule of holes?" I missed something.

liberalTHC, you can go ahead and change your name back--everyone knows who you are. There's no way there's two people on this planet as stupid as you, so swallow your pride.

At least you're--not your or yore--making an effort to clean up your writing. It's a shame, however, that you're such a freakin' moron...

Canuck,

Well, I guess he would have to read the blog - but if he did, he hasn't read anything that I haven't sent even more forcefully directly to senior management. I feel I have a moral obligation to point out to superiors what I think is wrong with the ways we do business...after that, it is really up to them to do, or not do, as their conscience dictates.

As for me, I come to work and do my job - not always as well as I should, but I do make an attempt at giving a fair day's work for a fair day's wage. If that isn't sufficient to continue my employment, then nothing is.

Dasein,

I don't view it as a bailout - but as a recognition that some of our corporate bosses have, as per usual, been boneheaded and got themselves into a jam...and President Bush doesn't want honest, hardworking Americans to pay the price for another financial shakeout.

Of course, one should bear in mind that I'm not the world's biggest fan of capitalism - it is better than anything else, but I do believe there is a purpose in government ensuring that, to put it into good, old phrasing, the rich do not grind the faces of the poor.

It is the function of government, in Our View, when business takes a predatory stance in the name of profit to step in and provide relief. It is not the government's function, via the Fed or any other organ, to step in to ensure profit within the market place. There should be no Fed Funds rate cut on 18 September such a cut would be nothing more than a major financial institution bailout at the expense of a few tens of thousands of people who desired homes but were not credit worthy enough to own them. This is a crisis of commercial paper desirability not of market liquidity.

With all this name-calling from the right wing maybe you should have used that tactic against the 9/11 hijackers and all those planes would have glided safely to the ground and all would have been well. But rational Men know that such lack of reasoning springs from an empty well for if you had counters other than "nincompoop" "dip wad" and so forth with which to flesh out your reasoning you would indeed use them. Here is the pitfall of being an operative for a defeated cause: one can never retreat from the cliff one can only jump and hope the rocks below are softer than they look. All of these divisive issues tie together My friends, abortion, religion, taxation all for one group in America based on race an class with all others as mere hangers on or objects to be vilified. Your bonfire of vanity waits!

"The real threat to the economy is not the foreclosure rate, but that government will overreact, especially if the motives are driven by impulsive populist politics. Chances are, by the time hearings are held and legislation is passed, the market correction will be over." -Dick Armey

"I agree completely with that" -Mark Noonan

Geez, is everyone from thedisbrimstone gonna come here and spout the same flawed rhetoric? I checked out your home blog, Pain, and you have a nice one. Why come here and pollute this one?

i believe that the government and Bush will prevail in the housing market to get it back on track.As far as it directingly to the poor that is false it is towards all americans needing to get out of bad loans. if the morgage brockers hadn't given out all these bad loans we wouldn't need this help from the government.

i am a concerned homeowner that is in a bad loan myself ,but alas i am not in forclser or even close to one. I am in a bad loan. That doesn't make me a bad risk either. so lets get this ship righted out and get back on track with our lives.