Dear Reader,It seems the chess pieces are all moving into their defensive positions. So let's see if I got this right:
1. The Department of Justice is dropping all charges against Fannie Mae for its accounting scandal. All it gets is the $400 million slap on the fannie. It seems that GSE is too big to fail. So the GSEs are shielded from a bubble collapse and thus they have implied plausible deniability. Check.So when the dust settles, guess who gets blamed? Who is left? Why, you get the blame of course. You, the home owner, gets blamed for 'taking out all those stupid loans, for paying stupid prices for your houses, for "buying" something that you could not really afford in the first place, for thinking you should have more than one house, and then for spending the equity that was never really yours'. That will be their justification for blaming you although maybe not in so many words.
2. The Fed has officially come out and denied that they had anything at all to do with the run-up in housing prices because 'prices are all based on sound fundamentals' they say. Loose lending standards, as enabled by the Fed, had nothing at all to do with the run-up in prices they say. Nope. Not us. No way. So the Fed has plausible deniability. Check.
3. I'm sure the banking and lending institutions are shielded because they're also too big to fail; we learned about that one from the Great Depression. Check.
4. And I bet, given their huge lobbying power, the National Association of Realtors and its minions are shielded as well. Check.
This just makes me so sick. I am so ashamed of America and its public servants. Whatever happened to accountability, responsibility, integrity, and the other basic lessons we learned in kindergarten? It makes me want to jump off the bridge.
It was nice knowing you all.
Marinite
PS - You know, given how personal housing is to people (unlike stocks) and how hurt people could get by the collapse of this bubble, if there was anything that could dislodge Boobus Americanus out of his slumber and take up arms, I would think this would be it.
12 comments:
I hate to say it but if you bought your house and didn't factor the economic downside potential than you really are partially to blame. Just becuase the other parties are writing on the wall now doesn't mean they wont get their fair share of blame. But really, its the overextended home owner that is going to take the personal hit. Can't wait to see what happens after labor day.
Americans are educated and have access to a level of information only dreamt of by previous generations. We all learned the maths required to work this stuff out in grade 8.
The fact is that most would prefer to watch reality TV rather than educate themselves about their basic finances. This boom is a product of sheer laziness, stupidity, and the unmitigated greed of the consumer.
I have zero patience for those whining voices complaining they didn't understand IO, ARM's or that RE can actually drop in value.
Tough luck. Maybe they should turn the TV off and turn their brain on. The fools who bought into this whole nonsense are the cause of the mess - it's only just that they should take the hit.
Irate Homeowner (mortgage free BTW)
I think so much of this has been greed, greed, and more greed on the part of buyers AND the banks who generated fees on loans that are impossibly large to pay back.
It is sad, because now MSM is full of stories to avoid ARM's, avoid IO's becuase they are a ticking time bomb. Excuse me, but what about the last two years, when so many people were taking these loans out? Two years ago it was brilliant to do anything to get in the market. Now it's a suicide pact.
Disgusting. I think a lot of people are going to get smacked with an ugly dose of financial reality.
As we all know, these criminals will be found completely blameless when the real estate market collapses:
1. Fannie Mae.
2. The Fed.
3. Banking and lending institutions.
4. The National Association of Realtors.
However, it is a criminal offence to lie about your income and make other false statements on mortgage loan applications -- even if you are encouraged to do so by those who are "helping" you get into your dream house.
It is only right that the insolvent home owner should be prosecuted for telling lies in order to purchase a home he could not afford and then pissing away all of his phony equity. After all, he's the only one left.
Marinite,
Just imagine for a minute, that you might be blamed. Yes, bubble bloggers.
You, me, Ben Jones, Rich Toscano, and a host of others. WE MIGHT BE BLAMED BY AMERICANS. Nothing like a public lynching of a few strategically placed strawmen to draw sympathy to all of those "poor" homebuyers who only got 400K profit from their 70's rancher in 4 years.
Think about it.
The Fed's motivation is straightforward. A good case has already been made elsewhere (i.e. Mish) that the fed is useless-- and and that case is about to get a whole lot stronger in the coming two years, and in fact the fed will be shown to be destructive to our economy. These guys just want to keep their jobs and powerful financial positions.
We now see that Fannie Mae and Freddie Mac are completely useless, and destructive to the economy as well, but too many people are getting too rich from sloppy accounting practices from these bozos. This one surprises me though. No accountability. No accountability whatsoever.
I'm sure the disturbance I feel from the exoneration of the GSEs will be made up for by the pure mirth of watching the sleazy Realtors come up with a litany of lame excuses in order to weasel out of this one.
But you're right, Marinite, this is all so very ethically wrong action by many many people who should have known better but chose the path of greed and profit over basic human decency. So hang on there, buddy, if you jump now you'll be missing the game just before it gets good.
...also, already there have been a number of media articles pinning the blame on home buyers and poor financial decisions they have made, despite the fact that a couple months before the same MSM was ballyhooing the whole stupid affair. The MSM is another chess piece that plays a role in this... of course they'll just say they were duped by their expert sources the Realtors.
So the buyers are already lambs lined up for the slaughter.
ahh the joys of watching the pendulum swing. So now he Fed is useless, anyone in the RE industry is crooked, anyone that bought in the last xx years is both stupid and/or duped.
Your generalizations are no better than what was happening on the opposite end of the spectrum 18 months ago.
And to the mortgage free Brit, congratulations on your superiority.
There is some interesting discussion of the Chicago Fed's denial here:
http://tinyurl.com/ol43n
Don't forget they already rewrote the bankruptcy laws, so forget about walking away from it all. Some are going to be paying for this for along time to come.
Life is full of tempations. Spend your hard earned money on this! Borrow this! Exchange fluids with this person! Take drugs!
If you don't have the intellectual capacity to learn the easy way, you learn the hard way. I'm afraid that's what "FREEDOM", remember that concept, is all about.
Oh, and Fannie May and the Morgtage Banks are not out of the woods yet. The root of this problem is that money is no longer real.
Banks are allowed to loan any amount without having any real dollars in reserve. The U.S. Government is printing up money to pay expenses because raising taxes or cutting entitlements loses votes.
We're just polishing brass on the Titanic. It's all going down anyway.
No, the American Boob will not blame those in authority, s/he will just turn on some other group of American Boobs. Same as always.
You'll have a new class of smug people saying, "I told you so" to the formerly smug equity millionaires. Politicians will mine this new social divide for all it's worth, encouraging the new Smug Thrifties to support draconian schemes to collect personal debts. You already see the ground prepared with the new bankruptcy laws.
Notice how the bubbles are biggest in "blue" states?
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