No One Could Have Predicted...
I signed into law the American Dream Downpayment initiative, which authorizes $200 million a year to assist an estimated 40,000 low-income families with downpayment funds. In this year's budget, I proposed the Zero Downpayment initiative, which would eliminate the statutory requirement of a minimum 3% downpayment for Federal Housing Administration-insured single-family mortgages for first-time homebuyers.
George Bush 9/20/04
The Zero Downpayment Act, as its names suggests, creates a federal program that allows some homebuyers to obtain federally-insured mortgages without making a down payment. “Federally-insured” really means taxpayer-insured, as taxpayers like you foot the bill for defaults...Between the Federal Housing Administration, which is the largest insurer of mortgages in the world, and the government-created Fannie Mae and Freddie Mac corporations, the mortgage market is hopelessly distorted. Millions of mortgages in this country are federally insured, and the tax bill for defaults could be astronomical if the housing bubble bursts.
Ron Paul 6/21/04
George Bush 9/20/04
The Zero Downpayment Act, as its names suggests, creates a federal program that allows some homebuyers to obtain federally-insured mortgages without making a down payment. “Federally-insured” really means taxpayer-insured, as taxpayers like you foot the bill for defaults...Between the Federal Housing Administration, which is the largest insurer of mortgages in the world, and the government-created Fannie Mae and Freddie Mac corporations, the mortgage market is hopelessly distorted. Millions of mortgages in this country are federally insured, and the tax bill for defaults could be astronomical if the housing bubble bursts.
Ron Paul 6/21/04
posted by The Cunning Realist at Wednesday, September 24, 2008
15 Comments:
Ron Paul got both the stupidity of the Iraq war and the stupidity of Bush economic policies correct.
He should be on every Sunday morning talking heads show. But he's ignored, or as he was at the GOP debates, openly mocked.
Cassandra....
I suggest that, if the DEMS pass the bailout bill, that someone add some earmarks for funds to expand GITMO so that the Wall Streeters, Lobbyists, CEOs, and the Bush Administration have a place to be housed.
Isn't there a clause in the Patriot Act that provides for punishment for Un-American activities?
No one likes a clever clogs
But.... But.... I thought the current debacle started when Democrats let ni-, er, spi-, mmmm, swarthy urbanites get affirmative action houses for cheap! Every one with a big TeeVee in the living room and a honking great Caddie in the driveway!
Look, Rush told me this is how it started!
-- sglover
Actually, no one likes someone who's right about the depressing things he says. That's why Ron Paul is ignored and happy-talk politicians get sanctified.
Blaming people who wanted the American dream, which starts with home ownership is terrible. It's the Wall Street guys who then created a ponzi scheme with all that debt and the last sucker in that scheme is the taxpayer.
If we made all these mortgages affordable for these people, how much would that cost? I bet less than $700 billion. So let's do that instead and then the a##holes who swapped debt with each other can suffer.
What a nut!
/SNARK
For a couple of years around 2003+, we were looking to downsize from 1600 sqft. We did our homework, checked assessor databases, MLS, etc. What we experienced was nauseating. First, realtors didn't understand smaller and were very pushy. Second, new development had covenants that wouldn't allow smaller homes. Third, in these communities/state, they are required that assessed value stays w/in a range of market value. So I could assume that the assessed value was close to "a market value" w/in a couple of years. People were selling homes for 2, 3, 10 times this value. Most of these were fixer uppers too. I figured we'd need to plan for 30% more above the purchase price to fix the house. I don't mean design. I mean fundamental structures (i.e., broken things, rotting wood, roof, furnance, etc). I wanted to understand more, so I went to the bookstore and bought, "The coming crash in the housing market", by John Talbott, published 2003. You had to be living on Mars, not to know there wasn't a problem. And it was so close to the last bubble we had just experienced, so there was no excuse.
People knew. But money was being made, we were aggressively being marketed that more stuff is better, bigger is better. To heck with anything but material stuff. And it happened from the top all the way down. The intellectual dishonesty leaves a bad taste. But I suppose we should be use to that by now. If they knew, but did it anyway to mask other problems, all they did was prolong the pain, and made a bad problem worse.
On a local news program a panel was discussing the plan. The main point was that Paulson won't just be buying these loans for the "market value" of these homes, but rather over paying for "assets". Nobody knows the "market value" or what these "homes" look like. If the assets had value, they could be priced on the market. The real problem the financial institutions are below $0. We'll be giving them cash to go from -N to $0+N. A true bailout so they can start making some more loans, because they did such a wonderful job last time.
What I find interesting, 2008 and onward was being predicted as being a bad time as measured by stock markets, because of demographics. CFP's have been advising their clients to take money out of stocks. Certainly if they don't have a traditional pension with a defined cash flow, they can't afford the risk, and they don't have the time. If you need the money w/in 10 years, it shouldn't be in the stock market. I think we are going back to a time (28 years) when stock market indices weren't the main measurements of our econmic health and quality of life.
Floyd Norris has some interesting blogging on these events.
snippet:
"Ben S. Bernanke, the Fed chairman, calls them “fire sale prices.” And of course the government should not pay fire-sale prices when it buys assets. Instead, it should pay fair prices, which are defined as “hold-to-maturity prices.”
Is Ron Paul this generation's Ross Perot?
This guy says this deal kills the dollar:
http://www.buzzflash.com/articles/lindorff/147
As far as I can tell, the Zero Downpayment Act did not pass Congress. Can anyone find evidence to the contrary?
A field guide to the loan sharks and politicos who got us into the predatory lending mess:
Where Credit Is Due: A Timeline of the Mortgage Crisis
Yes...nobody likes a know it all. hahahahahahaha.
read this. carefully. twice. then call your elected representatives and tell them that if we have to eat 7 billion dollars worth of bad debt, at least we know why. and we want them to know that we know.
Thanks to Qwerty @TPM Cafe.
http://tpmcafe.talkingpointsmemo.com/talk/2008/09/the-ponzi-scheme-in-plain-lang.php
Paul O'Neill had a clue.
"Former Treasury Secretary Paul O’Neill said President Bush is “in a panic” over the financial crisis and isn’t well-equipped to deal with it. “I don’t think he understands or knows much about any of this and it shows,” O’Neill told ABC News. In his 2004 book, The Price of Loyalty, O’Neill revealed that Dick Cheney argued in a White House meeting that “deficits don’t matter.” O’Neill also said that he was disturbed that Bush was so disengaged on domestic issues."
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