Poll: Favorite Government Bailout (so far)?

Please vote in this poll using the sidebar.

Favorite Government Bailout (so far)?

  • Foreclosure Prevention Act of 2008 (4%, 4 Votes)
  • Fannie / Freddie takeover (9%, 8 Votes)
  • TARP (15%, 14 Votes)
  • FHFA Streamlined Modification Program (3%, 3 Votes)
  • Super Stimulus (29%, 27 Votes)
  • Proposed Obama Foreclosure Rescue (11%, 10 Votes)
  • Other (29%, 27 Votes)

Total Voters: 92


For more information on any of these programs, browse the “Government Meddling” tag.

This poll will be active and displayed on the sidebar through 02.28.2009.

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

39 comments:

  1. 1
    Kary L. Krismer says:

    I voted other, because my favorite is the yet to be passed modification to Chapter 13 to allow home loans to be bifurcated.

    I don’t see how anyone could like either Tarp or the stimulus plan, because they’re products of Congress, and thus messed up.

    The takeover of F&F was seemingly effective to date, but what they haven’t done is found a way to make the end product more attractive to investors. So that’s probably been more effective short term than what it will be long term.

    Rate this comment: Thumb up 0

  2. 2
    george says:

    Government may be the spender of last resort, but…what’s the alternative?

    Rate this comment: Thumb up 0

  3. 3
    Kary L. Krismer says:

    By george @ 2:

    Government may be the spender of last resort, but…what’s the alternative?

    Repeal the corporate income tax, to induce the private sector to spend?

    Rate this comment: Thumb up 0

  4. 4
    Snigliastic says:

    RE: Kary L. Krismer @ 3
    Ha ha, Kary. Good one. An idea that doesn’t even work in theory.

    Rate this comment: Thumb up 0

  5. 5
    Kary L. Krismer says:

    By Snigliastic @ 4:

    RE: Kary L. Krismer @ 3
    Ha ha, Kary. Good one. An idea that doesn’t even work in theory.

    Why do you say that?

    Rate this comment: Thumb up 0

  6. 6
    Lake Hills Renter says:

    Am I supposed to vote sarcastically?

    Rate this comment: Thumb up 0

  7. 7
    EconE says:

    TARP is kinda cool because reminds me of those blue plastic tarps that “protect” all the “stuff” you bought at Home Depot or Lowes using your HELOC.

    Super Stimulus is also cool…sounds like an “energy drink”. It WAKES up an economy better than a triple shot from Starbucks!

    But really…the U.S. bailouts are kinda wimpy.

    But I’m waiting for the G20’s “MGMPFSHMMOAB”

    “Mega-Global-Money-Pumping-Financial System-Hail-Mary-Mother-Of-All-Bailouts”

    Why?

    Because I want to see what it does to the price of gold.

    Why do Governments, Central Banks and the IMF hold so much of that worthless stuff anyways?

    Rate this comment: Thumb up 0

  8. 8
    Clarkm says:

    Is this a sarcastic poll?? In that case I have a top 3 list :)

    Rate this comment: Thumb up 0

  9. 9
    rose-colored-coolaid says:

    By Kary L. Krismer @ 1:

    I don’t see how anyone could like either Tarp or the stimulus plan, because they’re products of Congress, and thus messed up.

    I voted for the stimulus plan. It’s the only item on the list with any chance of providing long term benefits to tax payers (increased research, and electrical infrastructure). Being a product of congress has no bearing on how good or bad a bailout is.

    If there’s one positive thing about the stimulus package (other than the name sounds like an adult film), it’s that nobody in congress really liked it. Both the democrats and republicans felt like it didn’t cater nearly enough to them. That’s enough to make me think it’s doing at least a little something right.

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  10. 10
    TJ_98370 says:

    .
    History of US Government Bailouts
    .
    The link includes a nice graphic related to the topic.

    Rate this comment: Thumb up 0

  11. 11
    vermillionsky says:

    what, no “none of the above”?

    Rate this comment: Thumb up 0

  12. 12
    Scotsman says:

    I voted for the stimulus, because from what I’ve read only 40% of it will have been spent by 2012, so there’s a chance it can be canceled after the midterm elections and replaced with something more effective… assuming we still have a functioning government.

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  13. 13
    Oops says:

    Why is there no discussion how the stimulus and all great things down there will all be repaid. Basically we tackle debt with even more debt. When will the US govt print lots of money and when will this erase the dollar? Well the dollar might just do fine because all other countries might start printing presses. So we will have a economy based on printing presses. How is that for a sustainable model?

    And if we go the harder route – without Obamomania – then people will have to save and not binge. What type of unemployment are we looking at when this transformation happens? And what type of pain are we looking at when repaying the binging sessions we went through?

    But maybe it is just better to forget this and throw yourself into Obamomania and just don’t think too much – think Obama and you will be saved.

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  14. 14
    old timer says:

    What ‘favorite’?
    None of it’s any good.
    How is more debt supposed to cure a debt problem?
    Make the fraudsters go to jail, write off the bad debt, close the insolvent banks, let
    the strong regionals that did not play with leverage take over new ‘banking utility’.
    People who bought too much home, or too many homes, or ate too much equity
    TOO BAD.

    You ain’t gettin’ yesterday back, no matter how much you try to borrow,
    yesterday was UNSUSTAINABLE.
    That’s why it’s all fallin’ down.

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  15. 15
    george says:

    RE: old timer @ 14

    How is more debt supposed to cure a debt problem?

    Um…in case this needs to be said, it’s not about helping the idiots who got us into this mess. All of the major economists who called the housing bubble also say we now need government spending. They have this crazy idea that we should try to avoid the next great depression, or something. Something about some really old dead guy called Keynes…

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  16. 16
    Joel says:

    I voted sarcastically. Did I do it wrong?

    Rate this comment: Thumb up 0

  17. 17
    DaveyDave says:

    I somehow couldn’t vote. They all make me go crazy for some reason…
    Off topic, I was trying to do a cost comparison of rentals and sales in our favorite neighborhood, Ballard. I thought it would somewhat difficult to track comparables, but no. There were 3 houses that were both for rent on Craigs list and with an MLS viewable on Redfin. Here they are:
    1. 510 NW 62nd St.
    Rent: $2,450
    Sale Price: $495,000
    Property Tax: $3,828
    **Monthly Payment: $2,567

    2. 1219 NW 83rd St.
    Rent: $2,600
    Sale Price: $639,000
    Property Tax: $4,289
    **Monthly Payment: $3,259

    3. 8015 19th Ave. NW
    Rent: $2,500
    Sale Price: $659,500
    Property Tax: $3,446
    **Monthly Payment: $3,282

    ** — the Monthly Payments are based on 5.5% interest, 30 year fixed, 80%LTV, 0 points down and include property taxes. They do NOT include maintenance, insurance, income tax decuctions, etc. that would be necessary for a truer monthly cost comparison. Other people’s estimates on those items are as good or better than my own.

    Even with all of that, it’s clear the monthly costs of the purchase would be far greater than that of renting these houses. It looks like we still have a way to go for price declines…

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  18. 18
    EconE says:

    RE: DaveyDave @ 17

    They’ll never get those prices…for sale or rent….especially when there are spectacular views for less.

    http://seattle.craigslist.org/see/apa/1044790178.html

    Care for a private beach?

    http://seattle.craigslist.org/see/apa/1038719052.html

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  19. 19
    EconE says:

    RE: DaveyDave @ 17

    They’ll never get those prices…for sale or rent….especially when there are spectacular views for less.

    http://seattle.craigslist.org/see/apa/1044790178.html

    Care for a private beach?

    http://seattle.craigslist.org/see/apa/1038719052.html

    And no six figure downpayment needed to rent…don’t forget about that!

    Rate this comment: Thumb up 0

  20. 20
    Kary L. Krismer says:

    Why wouldn’t the cost of purchasing be more than renting? I’ve yet to understand why anyone thinks they should be equal, or renting more than buying. But maybe I’m prejudiced against such an idea because it’s never been that way in my lifetime.

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  21. 21
    DaveyDave says:

    RE: Kary L. Krismer @ 18
    I suppose I agree with you to a point, Kary. All things being equal, I’d rather have the monthly payment go towards something to own. And we all would have a personal point where as the two payments diverge, we would prefer renting over owning. Where that point lies is up to the individual. The rent provides a benchmark against the mortgage to help determine the value. Properties 2 + 3 above seem awfully rich compared to the rents being asked, don’t you think?

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  22. 22
    shawn says:

    Buying should cost more than renting if you are getting something tangible such as equity. Theoretically, if it were financially the better choice, then, there would be an upfront cost and followed in time by the buyer being financially ahead of the renter. If that is not the case, then it is a hard sell, especially when it is touted as a great financial investment.

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  23. 23
    Kary L. Krismer says:

    I’m probably affected by the fact that during most of my life there’s been significant inflation. It’s been relatively mild the last several years. If that keeps up, where peoples’ expectations change as to the long term, I could see owning become closer in price to renting.

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  24. 24
    98115_Renter says:

    RE: DaveyDave @ 17

    Don’t forget that property tax increases over time.

    Rate this comment: Thumb up 0

  25. 25
    Eleua says:

    KLK,

    There are two parts to the monthly cost of housing: one is the actual benefit of shelter and the other is the “speculative premium” that financial geniuses use to try to compound loads of money without any real risks to themselves, their neighbors, and entirety of Western Civilization.

    Renting is the true cost of a house, because it only factors in the immediate utility of the house. If the rent on a house is $2000/mo, but the PITI (and other fees) run $3500, then there is $1500/mo in speculative premium.

    Speculative premium may actually go negative (a reflection of despair in the future prospects of price depreciation), which would drive PITI below rents. I saw this when I lived in New England in the early 90s.

    I discuss this phenomenon on my blog, which IMHO, should be nominated for a NOBEL prize in economics, or at the very least, a ticker-tape parade down Winslow Way on Bainbridge.

    http://clearcutbainbridge.blogspot.com/2008/08/ier-house-valuation-workshop.html

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  26. 26
    old timer says:

    @ George #15

    Yes, that’s what ‘they’ say.
    They are wrong.
    The Depression has left the station, it can not be stopped until
    all the bad debt is wiped out.
    That dead guy looked to his death to get him out of his own conundrums.
    “In the long run we are all dead.”
    ATTRIBUTION: John Maynard Keynes

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  27. 27
    jon says:

    Prices can stay above rents as long as owners are persuaded that the current low rentals will not last. While in-migration stays strong and new construction stays low, that seems a reasonable assumption. As long as it is hard to get a loan for new construction, the available supply will not increase. Once the population catches up, rents will rise. All the people doubling up now to save on rent will stay doubled up because there won’t be any more houses, and those extra people per unit will allow rents to increase.

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  28. 28
    Eleua says:

    Jon,

    If it has not been said to you, then allow me to be the first.

    People do not equate to demand; dollars do. If 4million of the poorest Indians moved to King County, and there were no jobs, rents would not rise. In fact, they would crater. Sure, if you could find a place that had a curious lack of riff-raff, the remaining income earners would live there, and rents would rise in the short term (right up until the 4 million poverty stricken looted it and destroyed the remaining economic base – see California for a contemporary example).

    Jobs drive demand, not people. I don’t care how many trolls move from elsewhere to sell beads at Pike Place Market; they are not contributing to demand.

    Look around. Our bullet-proof, pink pony economy is getting beaten like a red-headed step child. Every time one of our big employers shrinks, demand shrinks with it.

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  29. 29
    Joel says:

    RE: Kary L. Krismer @ 20
    Risk. Why would anyone pay more to take on more risk? Because the riskier asset will make you rich right? Except now that people are starting to realize it won’t, they’ll start demanding a discount for that risk rather than being willing to pay a premium for it.

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  30. 30
    Chris says:

    I picked the Obama Forclosure Rescue solely because it, more than any other bailout, has riled up a lot of people pissed off at the express train to socialism team Obama is on.

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  31. 31
    Kary L. Krismer says:

    By Eleua @ 25:

    KLK,

    There are two parts to the monthly cost of housing: one is the actual benefit of shelter and the other is the “speculative premium” that financial geniuses use to try to compound loads of money without any real risks to themselves, their neighbors, and entirety of Western Civilization.

    Renting is the true cost of a house, because it only factors in the immediate utility of the house. If the rent on a house is $2000/mo, but the PITI (and other fees) run $3500, then there is $1500/mo in speculative premium.

    I would tend to agree with that analysis, but add a third component. There’s some value to being able to do what you want with the property for as long as you want. On the do what you want, look how much some people complain about having to get an HOA to approve a paint color. On the as long as you want, some people (like me) hate to move, and don’t really want to live at the whim of the landlord (or more currently the ability of the landlord to continue to make mortgage payments).

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  32. 32
    98115_Renter says:

    My favority government handout/bailout is the mortgage interest tax deduction.

    Rate this comment: Thumb up 0

  33. 33
    Aaron says:

    I voted for the FHFA Streamlined Modification Program because no one else had.

    Rate this comment: Thumb up 0

  34. 34
    Sniglet says:

    My favority government handout/bailout is the mortgage interest tax deduction.

    I view the mortgage tax credit as the original sin, sparking the early phase of post WWII housing mal-investments. I think there it is no coincidence that US real-estate has appreciated at a faster rate than all previous history since WWII, with all the new government incentives to mis-direct investments into non-productive housing (i.e. assets that don’t generate an income). The GSEs (e.g. Fannie, Freddie, FHA) were the second great sin.

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  35. 35
    bidingmytime says:

    wow Tim- showing your sadistic side. I’m sure I’m not the only one who felt like someone had kicked me in the stomach after simply reading the list. I couldn’t even muster a vote. The list of names hurts so much- I dread the reality of implementation.

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  36. 36
    Eleua says:

    KLK,

    I agree that a certain intangible benefit needs to be reflected in the PITI. I am of the opinion that it is very low, and probably more than offset by other expenses, risks, and encumbrances to paying PITI.

    For example: if a bunch of gong-ringing hippies move next door, it’s going to cost me at least 7% to change houses. If I am renting, I just pull up stakes and move to a more agreeable neighborhood. Either that, or I have to “Round-up” their dope garden, and hope they move.

    Being able to improve your house is normally offset by the requirement to maintain your place.

    I think it is a wash, at best. YMMV.

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  37. 37
    David Losh says:

    RE: Eleua @ 25

    You make more sense commenting on this blog than you do on your web site.

    Rate this comment: Thumb up 0

  38. 38
    jojo says:

    AMEN!

    Rate this comment: Thumb up 0

  39. 39
    jojo says:

    This will make favorable conditions for the introduction of the AMERO in the next few years, which will obivously buy more goods and services than the dollar (U.S. + CAN) A & the peso

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