Posted on 02/22/2009 4:54:11 PM PST by Steelfish
Rant for Rant Obama's populist smackdown over his housing plan.
By John Dickerson Friday, Feb. 20, 2009
On Wednesday, Barack Obama unveiled a $275 billion plan to shore up the housing market and forestall some future home foreclosures.
It prompted an impassioned, scattershot, and ultimately clownish response from CNBC's Rick Santelli. Without apparently reading the plan, he railed that "government is promoting bad behavior" and that the plan was an effort to "subsidize the losers' mortgages."
He then turned to rally the traders around him who booed. Waving his arms like a frustrated conductor, Santelli asked: "How many of you people want to pay for your neighbor's mortgage for a house that has an extra bathroom and can't pay their bills?"
A fellow on the trading floor yelled: "How about if we all stop paying our mortgage. It's a moral hazard." Someone may also have yelled "Go Bears!"
(Excerpt) Read more at slate.com ...
“Without apparently reading the plan”
Why read anything? The government does not read their own bailouts.
They ARE promoting something, its called don’t pay your mortgage you are entitled to free housing.
Too bad Slate didn't read the plan either ~ including its implementing legislation and the approved regulations.
That's 'cause they don't exist yet ~ just Obama talking points and a line-item in the stimulus thing.
Whatever is going to happen we all know that Obama does not mean well for the nation as a whole.
Strip out the negative descriptions of Santelli, and the article is reduced by two thirds.
Surprisingly lightweight for a hit piece. Apparently, the author hasn’t read the thing, either.
The stupid Slate author apparently hasn’t seen Santelli’s response to the Whitehouse spokesgoon. Santelli had printed the plan, and ripped it up on camera!
Video:
http://www.freerepublic.com/focus/f-news/2191386/posts
“clownish”
Coming from people who are the actual source for Beggin’ Strips “I can’t read” dog fame, that’s just rich.
Clown time in DC as publicized by Pravda, complete with face paint to dress it up.
Two words for the Obama hack at Slate:
“Tea Party!”
Viva Santelli
Housing Bubble Prices should NOT be "shored up".
The reason that these people cannot afford monthly mortgage payments is that they foolishly paid $400,000 for a house that's worth $200,000 and a Greater Fool did not show up to buy the house for $500,000 before the gimmick mortgage exploded in their face.
Now, Obama wants to make the U.S. taxpayer the Greater Fool.
How much is a house truly "worth".
As much as the buyer for that house can afford to pay in monthly payments for BOTH principal AND interest from Month One without resorting to artificial gimmicks and without going broke. Anything else is a Bubble Price and maintaining Bubble Prices with Government aid only enables financially irresponsible behavior and prices responsible buyers out of the housing market.
Market forces are based on what "the market can bear" and not what "the market pretends to bear with borrowed money that will never be repaid".
Having the U.S. taxpayer become the ultimate pigeon in this scam is a theft of the taxpayer and a con man's fix of the market.
I wonder when they’re going to start digging into Santelli’s personal life?
Cavuto just pointed out an hour ago that the numbers in the Stimulus bill do not include insurance or tax. PITI — to arrive at monthly payments: price, interest, tax, insurance. So they calculated the numbers are off by about $150 per month for each new payment.
In fairness to Slate, I thought they deliverd an unusually even handed report. Santelli is not a derivatives trader and if Gibbs understood the Chicago floor at all, he would know that the Chicago floor is where farmers go to hedge their crop price risk and where airlines hedge their fuel costs. Not everyone there is speculating at 40 to 1.
In the long run, Gibbs and the White House are the big losers. The cat is out of the bag. The emperor has no clothes and making fun of people who point that out won’t put clothes on Obama’s misguided policies. Gibbs is going to rue the day he decided to mock the sentiments of the 90% of Americans who bought houses they could afford and pay their mortgages on time.
BO does not understand that once the bank loans the money, they sell the mortgage note within six months to clear the books of liabilities so they can borrow more money from the central bank to make new loans to new applicants. The re investor buys these notes assuming a certain yield over a certain time period. This keeps the money flowing in the system. Subprime and false entry by applicants/lender on conventional loans placed a cloud and risk on the mortgage notes the bank is trying to sell to re investors because the mortgages started to default more often then anticipated. BO program to allow certified victims of predatory lending is adding more risk to the mortgage note market, because the re investor can no longer tell which mortgage note within the portfolio he is buying into may end up with a borrower via court/fed intervention default and rewrite the payment process, thus affecting the yield on the original mortgage note. This messes up the investors buying strategy, and if the mortgage note market becomes too confusing and uncertain, they will refuse to buy. If the banks cannot sell their mortgage notes, they cannot lend money from the central bank to lend out to the public. Bank credit again will freeze up and we are back to square one on the credit crisis.
A relatively obscure analyst on CNBC makes a meaningless, if true, statement on TV and the White House and media spends the next week giving him credibility and making him into a minor celebrity by dignifying is outburst. What is a non-issue is on the brink of becoming a major issue.
I LOVE it when Obama makes idiotic blunders. Keep them coming.
PITI = Principal (not “Price”), Interest, Taxes, Insurance. These are the components of a monthly mortgage payment on a conventional escrowed product where the mortgage company, not the borrower, remits the payment for taxes and insurance when due out of an escrow account established by the borrower at loan origination to hold those portions of each monthly payment.
A non-escrowed product (the subprimes typically) will be interest-only or just principal and interest with the buyers qualified only for the lesser monthly payment of P&I usually because they did not have sufficient income or assets to set up an escrowed account for the taxes and insurance.
These “escrow waiver” shoe-horned loans, as one might suspect, have by far been the ones most likely to default.
Well said. We unfortunately moved to and bought a house in S. FL while the prices were skyrocketing. Our house I’m sure is worth less than we paid. However, we didn’t buy more than we could afford and so can continue making our mortgage payments. It’s too bad we can’t sell it for what we paid for it, but that’s how life works. We bought a house to live in.
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