Alarming News

June 25, 2009

Outrage

I’m very bullish on America. No matter which doofus is in charge, I always think we’re going to be ok, I always like us best (daydreams of Italy with my husband and a brood of Italian-speaking children notwithstanding), and there’s never anywhere else that I’d rather be. And you know those right track/wrong track polls? I’m one of those always on the right track. Even when things go badly, it’s ok, we’re a young country and we’re learning, we’re ok.

Let me go on for another minute. Even when Obama sends his stupid face on video to Iran, or equates the holocaust with the Palestinian situation, when he gives an hour-long informercial on his brilliant yet totally unthought-out healthcare plan, when he talks out of both sides of his mouth on Iraq, on gay marriage, on any complex issue, I still think America will be ok because he’s just one man, it’s just 4-8 years, and we’re a strong country which can survive anything.

But reading that Congressmen Barney Frank and Anthony Weiner want Fannie May and Freddie Mac to relax lending standards to new condo developments, well, that just leads me to despair. We’re still in the middle of a financial crisis, caused by bad mortgages previously encouraged by Barney the buffoon Frank, and yet he is pressing us to give more bad mortgages. It makes me lose my faith. In an America running on the right track, we would toss these bums out on their asses. We would stand outside their offices and demand they resign, as they are too stupid to lead us. We would throw rotten fruit and shun them from the public square.

I not only think we’re on the wrong track, I think there’s a train coming at us.

Posted by Karol at 12:25 PM |
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Comments

And that train seems to be on full speed.

Posted by: Angela at June 25, 2009 at 1:05 pm

Honestly, dude, aside from all the holes in your claim that the financial crisis was “caused by bad mortgages,” that you think it would be better for our economy to have major condomium developments all across the country fail, makes me wonder who is prattling on with as yet “unthought-out” opinions. Seriously, dude, dial down the crazy. I realize now by problem with Republican/conservative blogs — it’s the same thing that turned me off liberal blogs when I started blogging back in 2003, just straight-up irrational anger at “Chimpy McBush Rawr Halliburton.” No substance, no argument just waa we’re not in charge. Not fun, not interesting. Hey, maybe it’s time I give those blogs another chance, I bet they’re having a gay old time now…whoops, well, not “gay gay” that’s kinda sore subject right now. But, you, know what I mean.
Laterz

Posted by: NDS at June 25, 2009 at 1:18 pm

No, DUDE, you’re the crazy one. Bad mortgages did cause the financial collapse, if you need someone to draw you a picture of how it went down you should google it because many an economist drew just such a picture for dummies such as you. If you disagree point out some holes. But you can’t and you won’t because you know nothing about it besides that you should disagree with me.
The fact that you somehow think this retardo plan is ok is really in keeping with your equating the Democrats to a sports team you follow: your team, right or wrong. Any half-normal Democrat would have the same problem I do with this. The fact that you don’t makes you the total nut.

Posted by: Karol at June 25, 2009 at 1:23 pm

Karol,
Gonna have to disagree here. I was plenty read to jump up and down and scream bloody murder about Frank, but the fact that Weiner’s name was attached to it led me to read a little more.
If I read the proposal correctly, it’s not relaxing standards for mortgages to people with bad credit. It’s loosening some of the stupid restrictions on condos like those in New York. There are numerous new-construction developments in New York stuck in a Catch-22 because they can’t get their Certificate of Occupancy unless the building is 50% to 70% sold. And there are lenders–like Freddie and Fannie–that won’t lend to QUALIFIED buyers unless the building is 50% sold. Well, how is the building going to get 50% sold if no one’s lending the money to qualified buyers.
Now maybe there are some other bad things hidden in there, but it didn’t strike me as one of those moves to give $600,000 mortgages to the dude working six hours a week at Starbucks.

Posted by: Ken at June 25, 2009 at 1:32 pm

Actually Karol, if we were running on the right track, the masses would be doing either or both of these:
1. Tar and feathers.
2. String ‘em up like Mussolini.
Throwing fruit isn’t good enough for the likes of what set themselves so high above us.
I won’t comment on the proposed bill until I see more details.

Posted by: Perry Eidelbus at June 25, 2009 at 1:36 pm

Ken, “qualified” buyers ARE still able to get loans. It’s not true that all loaning activity has been frozen. It’s only been frozen to those deemed risky as we just came off a free-for-all of loans to risky individuals. So yes, maybe a somewhat-risky individual won’t get a loan right now but I don’t think now is the time to push through a loan for him anyway. We’re in a bad enough situation with these bad loans as it is, I don’t see how adding ANY more to the pile is going to help us (especially as all the new default laws would likely apply to new loans as well).

Posted by: Karol at June 25, 2009 at 1:39 pm

I’m sorry, Karol. Have you tried to buy in a new-construction condo lately? No? Didn’t think so. My wife and I qualify pretty easily for mortgages (because I married well). But there are lending institutions that are putting all sorts of restrictions on such loans even to people like us when it comes to new construction condos. Those condos aren’t dropping prices by hundreds of thousands of dollars ONLY because the market is soft and they were overpriced to begin with. (Not that I really want to move into one, because while New Yorkers may make good pizza, the current crop of developers — many of them from a certain former communist country — can’t build worth a shit.)

Posted by: Ken at June 25, 2009 at 1:56 pm

Wait, kid(S)? time to talk kid(S) now?
[Ken, sounds like a green grapes to me...]

Posted by: Tatyana at June 25, 2009 at 2:08 pm

Ken,
Why does the lender have to be Fannie or Freddie? A qualified buyer should still be able to purchase a new condo development without a fannie/freddie qualified mortgage. If banks are not making the loans, maybe it speaks to their credit standards and expectations for future real estate prices in NYC where there has been exponential development over the past 10 years. By relaxing the standards, you are potentially allowing fannie/freddie to assume additional mortgages with flawed credit characteristics. I think we’ve all already learned that fannie/freddie could not be trusted with the power of the US Gov’t backstop on their debt.

Posted by: Not exactly at June 25, 2009 at 2:11 pm

America certainly appears to be on a downward slide. If I’m going to pay through the nose in taxes, why not move to the italian country-side and raise a bunch of olive farmers???
Bambini, nessun gelato per voi fino a che non rifiniate i vostri lavoretti nell’oliveto

Posted by: IC at June 25, 2009 at 2:24 pm

IC, the sound of it melts hearts, for sure, but tax-wise, don’t expect to get a better deal in Europe (Italy, of all places! Why do you think Sofie Loren and others had all this trouble with escaping to Switzerland?)
Afraid, for paying lower taxes you’d have to look at less picturesque settings…mmm…Antarctica?

Posted by: Tatyana at June 25, 2009 at 2:37 pm

I’m not expecting tax relief. I’m expecting brunellos, montalcinos and hard-working olive farmers.

Posted by: IC at June 25, 2009 at 2:50 pm

I’m with Ken on this one — it’s a lot more expensive to get a mortgage without the Freddie Mac guarantee, even for people with very good credit and high incomes — so long as the individuals borrowing the money meet current standards (the “relaxing” of the standards here has nothing to do with the creditworthiness of the borrowers — only the potential that the apt will lose its value), I don’t think a return to the old 51% ownership requirement for a condo building justifies the outrage.
And while bad mortgages and the housing market are certainly a cause of the downturn (and maybe even the proximate cause as Bernacke has proclaimed), a whole lot of things were going wrong in the broader credit markets.

Posted by: Alceste at June 25, 2009 at 6:17 pm

What is going on with NDS? Lately, the final letters in that name have clearly stood for “Derangement Syndrome.” Maybe the “N” is for “Nutzoid.” I’m too depressed to think of anything more clever. The comments used to be so interesting…

Posted by: Seriously,I'mDisappointed at June 25, 2009 at 9:30 pm

Alceste:
You said: only the potential that the apt will lose its value
That’s exactly the lender’s concern at this point. Sour economy where mortgagee has potential for job loss coupled with a condo that is not fully sold.
Here’s the point, why are we rushing to make extension of loans easier once again? What’s wrong with expecting a tougher lending criteria? I go back to the point that new development in NYC was popping up at an alarming pace. As a lender that may get stuck with the property, I would be concerned about what percentage of units were sold. Why take chances in this environment?
If outrage is not the right word, certainly outrageous should be in consideration. Fannie/Freddie were not created so up and coming yuppies could buy condos in NYC.

Posted by: Not Exactly at June 25, 2009 at 10:03 pm

Bad mortgages did cause the financial collapse, if you need someone to draw you a picture of how it went down you should google it because many an economist drew just such a picture for dummies such as you. The bad mortgages were only one piece…once those mortgages were bought/split/repackaged as CDOs, CMOs, and derivitive, synthetic products composed of CDOs and CMOs, and sold off to all the major financial institutions on Wall St., and in some cases in mutual funds to individuals… That is where the crisis really blew up. And it goes well beyond the “bad-mortgage” theory…

Posted by: katie g. at June 27, 2009 at 1:24 pm

Another lesson for you, little girl:
It was the federal government that, starting in the 1930s, pushed for increases in “home ownership.” Fannie Mae was created with the idea of recycling capital to mortgage lenders, allowing them to make more loans than they otherwise could.
It was Fannie Mae, later followed by Freddie Mac, that popularized the concept of securitizing mortgages.
Do you understand what really precipitated the crisis, who’s really to blame, o clueless one? God damn, don’t just parrot the crap you hear on NPR and Oprah.

Posted by: Perry Eidelbus at June 30, 2009 at 12:41 pm
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