Friday, March 26, 2010

Housing Rescue Plan Y?

Well, we've tried tax credits and modifications and moratoriums on foreclosures and held interest rates at record lows and the housing market is still struggling so it's on to plan y - loan forgiveness.

"The Obama administration announced programs to help homeowners avoid foreclosure, including subsidies for borrowers who owe more than their home is worth.

The plan expands Treasury Department and Federal Housing Administration efforts and uses funds from the $700 billion Troubled Asset Relief Program. The administration faced a week of criticism from lawmakers and watchdog groups who say the government hasn’t helped enough homeowners stave off foreclosures."

You know I borrowed a bunch of cash to buy shares of Lehman Brothers in 2006 and that's worth far less than what I owe, do you think you kind hearted taxpayers could make me whole? Oh, and my beanie baby/ebay obsession of 1998 is still wreaking havoc with my credit score. Could I get some TARP money to cover that as well?

Of course not, but this is the logic of these plans. Some taxpayers made a poor financial decision and overpaid for houses they could never afford. Now, they are stuck and the banks are stuck. Instead of letting the system heal itself through orderly liquidation, we keep throwing money at the problem. Housing has become the elderly medicare patient that runs up $112k in bills and gets a new hip before dying in the ICU. I'll volunteer my services to head up the death panels for the housing market.

In the markets where foreclosures are moving quickly inventory is being absorbed by investors and the markets are actually recovering. This can't happen with more programs that seek to save us from our own financial stupidity.

I should note that there aren't many details around this plan, so this might be more PR hype than actual policy.

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Yeah, we're rallying on another Greek Bailout rumor. How many times can they bailout one country? This reminds me of the Lehman/AIG/MBIA rumor days when the market would rally up on every rumor.

The third estimate of 4th quarter GDP was released and it was revised downward slightly. The components were interesting though - consumer spending and residential investments - two leading indicators - were both cut fairly sharply. This might bear watching. However, this data also includes a supposed 19% jump in equipment and software spending in the fourth quarter. I'd like to ask for feedback from the software sales guys and girls - did it feel like sales jumped 20%?

Cheers!

1 comment:

MissShirley said...

You too my friend have been swayed by the media. Homeownership should be a right, not a privilege! Beanie Babies and Lehman Brothers ok...Lehman Brothers investment is a Pluck From Air (PFA) investment (idolatry worship if you will.) At least you had something to show for your Beanie Babies...albeit also fake...but nevertheless you invested risk capital...Our Primary Place of Resident should not be viewed with the same spectacles. One of my closest friends invested more than a 120k dollars 10% down payment and closing cost cash out of pocket toward the purchase of her home and the bank refused to work with her...the did sell it for 400k less than what she initially offered and agreed to pay for it, because the banks don't care (idols can't care, they have no life in them)...she lost her home, you see it didn't matter to her that she was out of pocket 120k cash and nearly 3 years worth of mortgage payments. She just wanted to keep her home! I appreciated the Blog...thanks for allowing me to comment! I own a bridge in New York if you are interested!!!