Get fired up! Congress considering bailing out SUB PRIME!

[DaisyDuke]

United Front . . .

Do you think it would be a good idea to jointly compose an articulate message that bullet points the important facts that we can use? I just want to make sure I don’t miss a good or PERSUASIVE point to the law/policy makers and I could use some help with that. Your thoughts?

[arnie]

Long time lurker, first time post.

Isn’t this similar to the Resolution Trust Corporation bailout of the S&L industry in the late 1980’s? Can anyone comment on the similarities of that to the current situation. My recollection is that the RTC was primarily set up to liquidate non-performing commecial real estate assets. But the timing was very close to the collapse of the residential bubble. Were they at all related?

[drunkle]

the federal reserve… here’s a congressman and presidential candidate that’s talking about it:

http://baltimorechronicle.com/2007/021907Paul.shtml

[4plexowner]

We can hope that Ron Paul is our next president but I don’t think it is likely

He is speaking the truth in a world that isn’t interested in hearing the truth

The mainstream media is ignoring him and does not mention him as a presidential candidate

An online poll removed Ron Paul’s name from their survey after he won the poll – see snippet from article and link below:

“In the fourth week of the Pajamas Media Presidential Straw Poll, which ended yesterday, Congressman Ron Paul received 43.3% of the Republican vote, trouncing second place Republican candidate Rudy Giuliani.

So what do we find at the start of the fifth week of the poll? Ron Paul’s name is mysteriously missing from the choices. ”

http://thenewliberty.com/?p=45

~

Watch how the media treats Ron Paul in the next two years – it should be interesting to see if they can successfully ignore him for the whole time

[DaCounselor]

“Isn’t this similar to the Resolution Trust Corporation bailout of the S&L industry in the late 1980’s? Can anyone comment on the similarities of that to the current situation. My recollection is that the RTC was primarily set up to liquidate non-performing commecial real estate assets. But the timing was very close to the collapse of the residential bubble. Were they at all related?”
_________________________

The S&L bailout was precipitated by the deregulation of the industry in the 70’s and especially the 80’s. S&L’s expanded massively as a result and risk management was terrible. Poor/incompetent decision making and outright fraud was rampant. The problems were exacerbated by local and regional economic factors in the farm-belt and on both coasts, including coastal real estate speculation.

I think the S&L crisis was more about deregulation and resultant management of expansion more than anything else. I think the lesson learned was that slow government reaction to the unfolding crisis exacerbated the disaster to the tune of tens of billions of dollars, driving the total cost of the bailout to something like $200 billion.

It’s my thinking that the government will not sit on its hands too long on a housing/lending collapse due to subprime/Alt-A defaults – assuming a catastrophic event begins in earnest. I have opined earlier in time that it may not even get to a govt. bailout situation if lenders/servicers modify re-cast terms to avoid blowing borrowers out of the game when their ARM re-casts. There is already evidence that some servicers plan to do just that. Should be interesting to see how it all plays out.

[kewp]

“I have opined earlier in time that it may not even get to a govt. bailout situation if lenders/servicers modify re-cast terms to avoid blowing borrowers out of the game when their ARM re-casts. There is already evidence that some servicers plan to do just that. Should be interesting to see how it all plays out.”

This is what scares me (and could precipitate a soft-landing).

Basically the banks figure exactly how much they can gouge out of homeowners, per month, and keep them in their homes. Prices would drop slowly, if at all, due to the lack of foreclosures. Rents would likely increase, due to lack of supply, to meet the new bottom.

[michael]

I emailed links to this blog, as well as other great blogs, to several conservative and libertarian think tanks and policy research foundations (i.e. CATO, etc) and asked for their help. I encourage you to do the same.

[Author]

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