Friday September 26 Housing and Economic stories

TOP STORIES:

Click Here To Play They Want Mama To Make It All Better - (www.youtube.com) Rep. Marcy Kaptur D-Ohio 9th District Toledo making one of the better arguments against the bailout. Part of the transcript is listed here: Taxpayers did not get their fair share of the upside, but they are getting all of the downside and a huge IOU. While Wall Street is made whole, the folks on Main Street are getting the bill. What has mama given us here? Are Mr. Bernanke and Mr. Paulson giving them any bet on the upside? They're not even helping them on the downside. I feel sorry for our country, I feel sorry for this Congress, that we can't do a better job of standing up for the people today. Where's the Federal Reserve, Where's the Treasury? Why do they only help the rich people? What about the rest of the people who have to work for a living? Wake Up America. Wake Up America. Contact your member of Congress.

Unusual Action in Goldman Trading - (www.cnbc.com) I wouldn’t be surprised if the trading was initiated by Goldman Sachs itself, as we know the government and the Fed would never prosecute Goldman. In an interesting twist, an unusual surge in Goldman Sachs' share price in the last 10 minutes of trading on Tuesday raised eyebrows on Wall Street, as it came two hours before news of Warren Buffett's big investment in the bank. Goldman Sachs shares rose more than $5 heading into the close of trading even as the rest of the market tumbled, leaving traders suspicious that inside information was used to make a profit.

Ron Paul: Bailout is Sinister - (www.campaignforliberty.com) Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike. The events of the past week are no exception. The bailout package that is about to be rammed down Congress’ throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! “This is welfare for the rich,” he said. “This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters.” The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

Upheaval on Wall St. Stirs Anger in the U.N. - (www.nytimes.com) With a pillar of American power — its financial leadership — so badly shaken, there was a certain satisfaction among some of the attendees that the Bush administration, which had long lectured other nations about the benefits of unfettered markets, was now rejecting its own medicine by proposing a major bailout of financial firms. President Bush, making his eighth and last address to the United Nations, with which he has had a troubled relationship, sought to reassure world leaders that his administration was taking “bold steps” to stanch the economic crisis in the United States, which, he said, “would have a devastating effect on other economies around the world.” Amid a long ode to the importance of continuing the fight against terrorism, he devoted one paragraph to the rescue plan. “We’ve promoted stability in the markets by preventing the disorderly failure of major companies,” Mr. Bush said. He noted that many were watching how the United States responded because economies were “more closely connected than ever before.” But for some leaders, the Bush bailout plan seemed hypocritical given the tough course Washington has often advised struggling nations to take. President Nicolas Sarkozy of France described the crisis as the worst financial mess since the Depression of the 1930s and the financial system as “insane.” He called for a summit meeting in November to determine how to address the problems and to develop greater international regulations of financial markets. Many leaders echoed that latter demand. Mr. Sarkozy also said that at a news conference he had talked with Wall Street bankers, but that they claimed not to know who was responsible for the mess. When banks and hedge funds hand out fat bonuses, they are all willing to gloat about their success, Mr. Sarkozy said, “but when there are deficits we don’t know who is responsible.”

Agents Raid Office in L.I.R.R. (Long Island Railroad) Disability Inquiry - (www.nytimes.com) Please don’t tell me that we can’t reduce costs (by billions of dollars) before raising taxes. I am sure we can find thousands of these types of cost saving measures to focus on before raising taxes. Here is another example of ¼ of a billion in waste to pay lazy railroad retired workers. The inquiry into the legitimacy of thousands of disability payments to retired railroad workers intensified. The raid came two days after The New York Times reported that nearly all career employees of the railroad — from 93 percent to 97 percent of retirees every year since 2000 — retire early and soon after begin getting disability payments from the federal agency. The retirement board almost never turns down a claim, and since 2000 has paid more than a quarter of a billion dollars in disability checks to former Long Island Rail Road workers, The Times found. Responding to the findings, Gov. David A. Paterson immediately directed the state attorney general to begin a wide-ranging inquiry into disability claims at the railroad. On Tuesday, he called on Congress to aid in that investigation.

CEOs 'Unpatriotic' If They Refuse Pay Cut: Rep. Frank - (www.cnbc.com) And to take it one step further, the biggest moron in Congress, Barney Frank should not be eligible for a pension as he was asleep at the wheel while all this was occurring.

Fed Acted Like a Liquidity Drug Dealer: Economist - (www.cnbc.com) – Good video interview with Dr. Marc Faber. The Federal Reserve, which has encouraged excessive borrowing, is to blame for the credit crunch that has gripped world markets for more than a year, Marc Faber, the author of the Gloom Boom & Doom Report, told CNBC on Tuesday. "About 15 percent of U.S. households have negative equity. Who supplied the leverage into the system? It's called the Federal Reserve Board," Faber said. "If I'm the drug dealer I'm not responsible that everybody takes drugs, but I facilitate it, especially if I give it out free of charge, I can enlarge the market share, and that's what the Fed has done." Liquidity will dry up even more, volatility will stay high and financial assets are going to suffer as the crisis continues to unfold. The bailout plan is unlikely to work and the global economy will take the hit, he predicted. "People rely on the people in Congress, at the Fed, at the Treasury, people that brought us into this trouble, to take us out of trouble. I don't think they will succeed," Faber said. "We can have recovery rallies but a new high on the S&P is practically out of the question for a very long time. In real terms, equities are still very high and economically, I think the world will go into a slump." We have to see very clearly that the cause of the problem was excess leverage. The biggest hedge funds were Fannie Mae and Freddie Mac; they had the leverage of one over 150 and under the eyes of Congress, under the eyes of the SEC and everybody… and nobody did anything about it. Then, people go and bitch about the short sellers," he added

Bernanke Tells Taxpayers To Pay Above-Market Prices for Bad Debt - (www.bloomberg.com) Federal Reserve Chairman Ben S. Bernanke signaled that the government should buy devalued assets at above-market values to make its proposed $700 billion rescue package most effective in combating the financial crisis. ``Accounting rules require banks to value many assets at something close to a very low fire-sale price rather than the hold-to-maturity price,'' Bernanke said in testimony to the Senate Banking Committee today. ``If the Treasury bids for and then buys assets at a price close to the hold-to-maturity price, there will be substantial benefits.''

Cramer: 5 Lies About the Paulson Plan - (www.cnbc.com) – Cramer wrong as usual, and also as usual, trying to push through Wall Street bailouts.

More stories related to the crooked Henry Paulson and his tough love for the American Taxpayer:
· Paulson's folly : I'm not buying it - (blog.macleans.ca) We’ve had market crashes before. We’ve had bad recessions before. They’re not nice, but we survive them. Part of what has helped us survive is the distinction between private enterprise and public finance. Public finance should be used to address the damage from market crashes. If you had a trillion dollars to spend, you could do an enormous amount to help people hurt by a market crash. With a trillion dollars, you could create a public program to halt home forecloures, for example. You could go on a massive public infrastructure spending program to employ all the tradespeople hurt by the housing collapse (and address a huge and simmering long–term threat to the economy at the same time). That’s just two examples. They have managed to terrify people, in order to convince them that this is the only way they could prevent a return to the Great Depression. I think they’re saddling our generation, and our kids generation with a greatly diminished future, for the sake of temporarily bolstering the status quo, and bailing out a handful of incredibly irresponsible institutions that ought to be allowed to fail.
· Buy MY shitpile, Henry! - (www.buymyshitpile.com)
· Complain about Paulson's theft to your Representatives - (clerk.house.gov)
· Paulson Will Not Bully Congress into $700 Billion Bailout - (rocktrueblood.blogspot.com)

FBI investigates Fannie, Lehman, AIG - (but not Fed or White House!) - (www.marketwatch.com)

"Personal responsibility" for the poor, but not for the rich - (www.opednews.com) In fact, the blog “Economics of Contempt” compiled a list of pundits/experts who were catastrophically wrong on the housing bubble. They include: Alan Reynolds of the Cato Institute; Kevin Hassett of the American Enterprise Institute; Jim Cramer of CNBC’s “Mad Money;” Nocolas P. Restinas, director of the Harvard Joint Center for Housing Studies, and 20 more. So the American home-buying public was told again and again by this administration, its economic minions, TV pundits and very popular right wing talking heads that they should go out and buy all the house they could because Happy Days Were Here Again and there was no bubble and everything would be just fine. When the bottom falls out, these same conservatives blame the homebuyers for failing to earn their advanced degrees in economics and understand what a great many with such degrees failed to—that this was not just a bubble, but a dung-filled bubble, a la Dennis the Menace as filmed by John Waters, and it was going to burst in our faces. Sullivan said that he believed in “personal responsibility.” But like most conservatives, he only believes in it for proles. According to the U.S. Census Bureau, the Northeast has the highest percentage of college graduates—just shy of 31%. An overwhelming majority of Americans have high school educations. Yet, per Sullivan, Bernanke and their conservative class, they’re supposed to know that the current administration and its two Fed Chairmen were full of economic crap. They were supposed to know to ignore that Ivy League professor on their TV.

If truth came out, most foreclosures would generate no sympathy - (www.chicagobusiness.com) Mr. Zell attributed the housing crisis to the “unequivocal blind faith in the value of a house and the belief that it would go up forever” and the role of financial intermediaries who had “no skin in the game,” like investment banks that packaged loans into securities and sold them. “Everything was intended to be bought by a bunch of dumb German state-owned banks,” Mr. Linneman said. “And thank God there were a lot of them,” quipped Mr. Zell. Mr. Zell also blamed government programs aimed at increasing homeownership, perhaps not surprising considering his role as chairman of Equity Residential, the nation’s biggest publicly held apartment owner. Historically, about 62% to 65% of U.S. households have owned their home, but the rate peaked at 69.2% in 2004. “The reality is we keep seeing over and over again that only 62% of the people can afford it,” Mr. Zell said. He suggested that most homeowners facing foreclosure today are victims of their own bad judgment, not unscrupulous lenders. “The majority of the foreclosures today — if the truth came out — would generate no sympathy at all,” he said.


OTHER STORIES:

Hey Congress, You Already Passed Homeowner Bailout - (www.cnbc.com)
Bailout Backers Will Lose in November - (www.newsmax.com)
Housing still too high! Millions spend half of income on housing - (www.businessweek.com)
Fraud expert: Orange County median should be $300,000 - (www.ocregister.com)
When the gamblers bail out the casino - (www.atimes.com) Paulson's dreadful scheme will become law, because Americans love their bankers. The bankers enable their collective gambling habit. Think of America as a town with one casino, in which the only economic activity is gambling. Most people lose, but the casino keeps lending them more money to play. Eventually, of course, the casino must go bankrupt. At this point, the townspeople people vote to tax themselves in order to bail out the casino. Collectively, the gamblers cannot help but lose; individually they nonetheless hope to win their way out of the hole. Americans are so deep in the hole that they might as well keep putting borrowed quarters into the one-armed bandit. They have hardly saved anything for the past 10 years. Instead, they counted on capital gains to replace the retirement savings they never put aside, first in tech stocks, then in houses. That hasn't worked out. The S&P 500 Index of American equities today is worth what it was in 1997, after adjusting for inflation (and a pensioner who sells stock purchased in 1997 will pay a 20% capital gains tax on an illusory inflationary gain of 40%). Home prices doubled between 1997 and 2007 before falling by more than 20%, with no floor in sight.

Mortgage Strike To Protest Paulson $700 Billion Theft - (patrick.net)
Vote No Bailout - (www.votenobailout.org)
No Wall Street Bailout - (nowallstreetbailout.com)
Get Pitchforks and Torches: Protest at Wall St. Thu at 4 pm - (www.indypendent.org)
Senator Sanders' Petition Against Paulson - (Mish)
Paulson's 0% Balance Transfer! - (optionarmageddon.ml-implode.com)
Tougher Bankruptcy Laws Bite the Lenders -- Ha! - (www.businessweek.com)
Analyst says Paulson intervention is big mistake - (abc.net.au)
Contact your Congressperson in the House of Representatives - (forms.house.gov)
Senator Contact Info - (www.senate.gov)
Write Paulson at home: 2750 32nd St NW, Washington, DC 20008 - (switchboard.intelius.com)
Let's Play "WALLSTREET BAILOUT" The Rules Are... - (www.youtube.com)

U.S. Government: The World's Largest Homeowner - (www.ml-implode.com) - "f the Treasury buys $700 billion in toxic mortgages from banks, the government would be setting itself up to be the world's lar...
FBI probing Fannie, Freddie, Lehman, AIG - (www.ml-implode.com) - The FBI did not provide specifics but said the inquiries were part of a broader probe, CNN said. The bureau is trying to deter...
Sovereign Funds May Invest $725 Billion in Property - (www.ml-implode.com) - "Sovereign wealth funds may increase investment in commercial real estate to a net $725 billion by 2015 as they diversify their ...
Liars, and the Lying Lies They Are Telling You - (www.ml-implode.com) - " Like a lot of folks who are completely flabbergasted by the Government’s repeated efforts to whitewash and gloss-over the all...
Paulson plan throws oil on fire - (www.ml-implode.com)
Chase Prime Wholesale added to Ailing/Watch list. - (www.ml-implode.com)
Online critics take aim at $700 billion bailout - (news.cnet.com)
Is it worth $700 billion? - (lansner.freedomblogging.com)
Treasuries Lose Allure for Asia, Europe Investors - (www.bloomberg.com)
Japan offers solution to financial crisis - (news.bbc.co.uk)

Senate Majority Leader Reid: "No Blank Check" for Wall Street - (Mish at globaleconomicanalysis.blogspot.com)
Treasury Auction Scam and How To Stop It - (www.ml-implode.com)
'The World Shouldn't Have to Bear the Burden for America's Lapses' - (www.ml-implode.com)
Mortgage Defaults Already at $50bb Per Month…$700bb Won’t Go Too Far! - (www.ml-implode.com)
MLI Exclusive: Is the California Association of Mortgage Brokers insolvent? - (www.ml-implode.com)
Fate of Bailout May Rest With Republican Sen. Shelby - (www.cnbc.com)
Congress cool after bail-out plea - (news.bbc.co.uk)
Americans Oppose Bailouts, Favor Obama to Handle Market Crisis - (www.bloomberg.com)
Echoes of Iraq in Bush's handling of mortgage 'surge' - (www.marketwatch.com)
Stopping a Financial Crisis, the Swedish Way - (dealbook.blogs.nytimes.com)
Truckload of stinking dead carp pushed on taxpayers - (jameshowardkunstler.typepad.com)

House buyers get cold feet in credit crisis wake - (money.cnn.com)
World's richest man to invest $5 billion in Goldman Sachs - (www.goldmansachs.com)
Fate May Rest With Shelby - (www.ml-implode.com)
$5 Trillion Needed to Stop Bank Crisis, Says Japanese Expert Listen to this article - (www.ml-implode.com)
The Bailout Plan - what does it mean? - especially for gold and T Bonds - (www.ml-implode.com)
Roll Your Own Bailout, It's Easy! - (www.huffingtonpost.com)
REQUEST FOR URGENT CONFIDENTIAL BUSINESS RELATIONSHIP - (patrick.net)