AYFKM?: Soros Thinks We Need More Stimulus

AYFKM?: Soros Thinks We Need More Stimulus

There aren’t very many people I detest more than George Soros (though Mishy does come immediately to mind), and his ability to write op-eds and have them published drives me bananas. His latest hogwash from the Financial Times, for example, writing about how more stimulus is necessary when we are close to $14 Trillion in debt.  Yeah, just keep digging would be Georgie’s advice.

America needs stimulus not virtue

But the crash of 2008 was primarily a failure of the private sector. US (and other) regulators should be faulted for failing to regulate. Without a bail-out, the financial system would have remained paralysed, making the subsequent recession much deeper and longer. Similarly, the US stimulus package was a necessary measure. The fact that most of it was spent to sustain consumption rather than on correcting the underlying imbalances was unavoidable due to time pressure.

Let’s remind folks, shall we?

‘Burning Down The House’

The op-ed continues:

Where the Obama administration went wrong was in how it bailed out the banking system: it helped the banks earn their way out of a hole by purchasing some of their bad assets and supplying them with cheap money. This, too, was guided by political considerations: it would have been more efficient to inject new equity into the banks but the president feared accusations of nationalisation and socialism.

Oh really?  If you aren’t reading Market-Ticker every single day, you aren’t aware of what is really going on.

Bernanke: I Am An Ass And A Looter

Worse, you can count the number of people who went to prison on the fingers of one hand, AND NOT ONE GOT NAILED FOR KNOWINGLY FALSE – MALICIOUSLY SO – SECURITIES SALES.

So they did it again.

This time in houses.

You know what happened.  You could have a mortgage to buy a house as long as you were breathing. No income, no job, no assets.  They even gave the loan a name – “NINJA.”  Bernanke knew this.  He was the supervisor of the banks.  He didn’t give a ****.  He knew damn well this crap was being securitized and sold off to people and that there was no way, on a long-term basis, these loans could be paid off.  These loans were given ONLY on the back of rising prices – nothing more.

Prices that had to rise 12% or more a year to cover a once-a-year flip costs – 6% for the buy, 6% for the sell, by the Realtards.  Maybe you’re good and negotiate 1% off per side.  Ok, the other 2% went to fees – fees that the banks got to keep, even if the paper was utter and complete CRAP.

Again, Bernanke didn’t give a ****.

Again, the bubble inflated.  This time in houses.  Bernanke claimed in sworn testimony as late as 2006 that there was no bubble and that housing prices reflected “strong fundamentals.”

BULL****!

Again the bubble popped.  You know what happened.  Millions of Americans lost their houses, millions lost jobs.

AGAIN, TRILLIONS IN WEALTH WERE VAPORIZED AND AGAIN THE BANKS KEPT ALL THE ILL-GOTTEN LOOT!

But this time, when the bubble popped, it popped a bit too early.  The banks got stuck with some of their own crap.  So Paulson and Bernanke went to Congress and threatened “Tanks in the streets” unless they got $700 billion.  They rolled Congress to save their friends who not only should have gone bankrupt, many of them should have gone to prison!

But even that wasn’t enough.  We still had a problem, and the market and economy was still falling apart.  So Geithner and Bernanke, really the same guy with two faces, went to Congress again and got them to force FASB to make accounting fraud legal.  That’s right – “make up a price for this asset and its ok on your balance sheet.”  They did it, and heh, the banks were saved (well, not really, but it looks like it.)

So again nobody goes to prison, the same people steal all the money, and Bernanke claims – again – that he couldn’t see it coming – even though he was the guy supervising it all!

What’s worse is that all the crap that was shoved in the box – trillions of it – is still out there, much of it off balance sheet!  Essentially every major bank has hundreds of billions of dollars of who-knows-what stashed where nobody can see or value it, exactly as ENRON did, and a couple of them have over one trillion in off-sheet exposure – more than enough to blow their capital to hell several times over if the valuations are not accurate.  Yet we can’t see, we can’t examine, and we can’t know.

If I can see this without having a PhD from Princeton, either Bernanke is a ****ing idiot who bought his degree and has an IQ smaller than my kid’s soccer shoe size or he’s a damned liar and has been intentionally misleading the American Public along with Congress for more than a decade.

Pick one!

Ok, so there’s history.  None of which Bernanke claims he could “see” with his much-vaunted “models”, remember?

What do you think the banks are doing now, having gotten away with all-but-murder (and maybe some of that too) with not one but two full sets of scams in the last decade?

Want to know the latest about Fannie Mae?  You ain’t gonna believe it; they are back to sub-prime lending games.

Fannie Mae to Sell Foreclosed Homes With Subprime Lending Terms

Thought those great low down-payment deals were gone? Think again. If you’re willing to buy a home foreclosed by Fannie Mae through the new HomePath program, you may be able to purchase one with as little as 3 percent down. Even better, that 3 percent can be a gift from a family member or other third party, or a loan from a nonprofit, or a state or local government.

Sound a lot like those subprime loans that started this housing mess?

The terms are similar, but the big difference now is that to qualify for those favorable terms in the HomePath program, you must choose one of Fannie Mae’s foreclosed homes, and you must buy it “as is.”

Here are the terms you can expect:

  • Low down-payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only).
  • You may qualify even if your credit is less than perfect, as low as 660, when most lenders want a minimum of 700.
  • You can qualify as an investor or owner-occupant.
  • Down payment must be at least 3 percent for an owner-occupant, but it must be funded by your own savings or by a gift, a grant or a loan from an employer, a nonprofit organization, or a state or local government. Investors must come up with 10 percent down.
  • No appraisal is required.
  • No mortgage insurance is required, but the terms of the loan may not be as favorable. You need to look at the options with your lender.

To get these very favorable terms, you’ll need to buy the home “as is.” But if you find the perfect home and it needs some renovation, you’ll be able to quality for the HomePath Renovation Mortgage. This type of mortgage will fund both the purchase of the home and some light renovation.

So the Dodd-Frank FinReg bill is tracking every financial transaction inside the country, but “omitted both an adequate down payment and a good credit history from the list of criteria indicating a lower risk of default as regulators sought to define a qualified residential mortgage.”

Subprime 2.0 Is Coming Soon to a Suburb Near You: Edward Pinto

‘Prudent Underwriting’

This was no oversight. Republican Senator Robert Corker and others proposed an amendment that would have added both a minimum down-payment requirement and consideration of credit history along with the establishment by regulators of a “prudent underwriting” standard. This amendment was defeated.

In early September 2010, Fannie and Freddie’s regulator, the Federal Housing Finance Agency, following requirements set out in 2008 by Congress, finalized affordable housing mandates that are likely to prove more risky than those that led to Fannie and Freddie’s taxpayer bailout. As required by Congress, these new goals almost exclusively relate to very low- and low- income borrowers. Meeting these goals will necessitate a return to dangerous minimal down-payment lending, along with other imprudent lending standards.

Then add in ForeclosureGate from Market Ticker:

Kudlow Gets Into Foreclosuregate

Oh BILL! BILL GROSS! Calling You Out Dude

Different? No, Just A Search For A Bagholder

MERS/MBS/Foreclosure Goes RICO

See, I Told You So (Mass-Document Forgery?)

Foreclosure Fraud Update: Weekend Condensed Edition

Here Comes The Spin! (Foreclosure Fraud)

…and one of my current fav articles from Karl:

Some Inconvenient Questions For Our President

Since I’m in a particularly malevolent mood when it comes to politics today….

  • GMAC/Ally is owned by the US Federal Government. You, President Obama, indirectly through your Treasury Secretary Tim Geithner, took it over as part of GM.  This happened on your watch and you cannot blame it on Bush.
  • We now appear to know that GMAC, along with other firms in the MBS marketplace, including Fannie and Freddie, have been using a series of “foreclosure mills” that are emitting tens of thousands of fraudulent affidavits that have been used to dispossess Americans of their homes.  (See Tickers here, here and here.)  There is plenty of question as to whether those foreclosures are proper or whether the original securitizations were valid in the first place.

Question #1: Mr. President, are you going to call a full-stop to all such foreclosures, reverse all that have occurred as a consequence of what appears to be massive and pervasive document fraud, and take personal responsibility for the mess in firms you took over as President of The United States?

Question #2: When will you be directing Eric Holder, your Attorney General, to investigate and file indictments against the officers, directors, and actors in these apparent foreclosure-mill scams?

Question #3: If it is proved that (1) the securitizations were not proper in the first place, and (2) not only were they improper but they were knowingly put together with either actual knowledge or reckless disregard for this fact, will you force the banks that were involved in constructing these intentionally-defective instruments to eat them?

Question #4: Yes, I know that if you do what is asked in Question #3 the banks will all blow up.  Every one of them.  There is some $1 trillion of this bogus non-agency MBS trash out there.  I don’t care.  Yes, I meant it when I asked if you would allow The American People some justice – just this once – from all the scams, frauds and schemes – even if it sinks your best friends on Wall Street!

That’ll do for starters.

Well folks, you get the idea; we are totally screwed and because the economy didn’t completely collapse, they are back to their old games with relish.  Flipping this Congress and then this White House to CONSTITUTIONAL CONSERVATIVES will alleviate many of these problems.

AYFKM?  Now They Want To Help Homeowners?

AYFKM? Now They Want To Help Homeowners?

On the heels of  Bank of America’s new forgiveness program, Bahana C. Obama plans to ‘expand foreclosure prevention efforts”.

Are You Freakin’ Kidding Me?  Three years after the beginning of this mess, the Obama administration and the banks want to help?  This is all about protecting a bottom line that would go straight to the bottom of the Mariana Trench if Americans, en masse, just walked away from their underwater homes until the market resets itself.  Double bonus, though, guess who gets to foot the bill for Obama’s re-distribution of wealth?  $14 Billion in ‘red’ money will be used from the TARP program.

At some point, the peaceful civil disobedience of the American citizen will get the message through to the banks and corporations that THEY DON’T OWN US if we ain’t buying.  A national strike is looking better and better.

First Bank of America from this morning’s Palm Beach Post, Money section:

Bank of America has new ‘forgiveness’ program to help struggling homeowners

Bank of America Corp. will permanently cut up to 30 percent from home loan balances for tens of thousands of struggling borrowers under a new program that some predict will become industry norm.

The plan, announced Wednesday, was virtually unthinkable just months ago.

So taboo was the idea of forgiving principal amounts, that some lenders refused to comment when Ron Faris, president of West Palm Beach-based Ocwen Financial Services, promoted it as a solution to the continuing foreclosure crisis before a congressional committee earlier this month.

But with millions of Americans underwater on their home loans, and increasingly willing to walk away, bank officials said Wednesday that cutting loan amounts is necessary to reduce defaults.

“The banks have been reluctant to come to the reality that ‘Houston, we have a problem,'” said Michael Sichenzia, president of Dynamic Consulting Enterprises in Deerfield Beach. “It’s inevitable more banks will follow. The cost to administer foreclosures is growing exponentially.”

Bank of America, which estimates it has 1.5 million home loans that are 60 or more days behind on payments, calls its plan “earned principal forgiveness.”

To qualify, a borrower must prove financial hardship, be two months delinquent in payments, and owe at least 20 percent more on the loan than the home is worth.

The program targets the riskiest home loans awarded during the real estate boom including subprime adjustable rate mortgages and certain loans that have a fixed interest rate for the first two years before adjusting annually.

Under the new plan, which begins in May, a portion of the principal balance will be set aside interest free. That principal can then be forgiven over five years if the homeowner stays current on new lowered payments.

Obama Expands Foreclosure-Prevention Efforts

The White House will announce Friday an expansion of its foreclosure-prevention efforts to include reducing the mortgage loan balances for some distressed borrowers and giving temporary help to the unemployed, people familiar with the plans said.

In the latest overhaul of the year-old mortgage-loan modification program, these people said, the White House will announce plans to allow unemployed borrowers to receive sharply reduced payments—or a break from making any payments—for at least three months and up to six months. The revamp will also require banks to consider writing down loan balances as part of the formula for lowering monthly payments under the federal Home Affordable Modification Program, or HAMP.

In addition, the administration will introduce a program that uses the Federal Housing Administration to insure new loans for borrowers who are underwater, owing more than the current values of their homes.

Under that program, investors who reduce loan balances to 96.5% of the current property value would refinance borrowers into an FHA-backed loan. Investors would have to reduce first-lien mortgages by at least 10%. For properties that have second-lien mortgages, the program is designed to reduce the total mortgage debt to no more than 115% of the estimated property value. Banks that hold second-liens will be eligible for incentive payments if they write down those loans so borrowers can qualify.

To pay for the expanded program, the administration will allocate $14 billion in money from the Troubled Asset Relief Program that had already been earmarked for foreclosure prevention efforts.

An administration official said that the program adjustments were designed to “better assist responsible homeowners who have been affected by the economic crisis through no fault of their own.” The administration is trying to walk a fine line, offering more help to the most troubled homeowners without encouraging people who can afford their payments to default in the hope of getting similar treatment.

Nope, nobody has been saying for over two years now that a floor has to be put under the home market, we all just wanted the banks to get more money.

Are you getting tired of the dictator-in-chief appeasing everybody but the people footing the bill?

(H/T KG)

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