Quadrant Homes Cuts 20% of Workforce

From the P-I: Quadrant Homes lays off 45 workers

Quadrant Homes, the Puget Sound area’s largest home builder, announced Thursday that it is cutting its work force by 20 percent in response to the slowdown of new home sales in the area.

The company will lay off 45 associates from its Bellevue headquarters and field locations in Western Washington, bringing its work force to about 180 people, the company said.

Luckily, the government is stepping in to save us all, so we’re probably at the bottom right now. Right?

(P-I Staff, Seattle P-I, 09.18.2008)

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

114 comments:

  1. 1
    Sniglet says:

    The more I hear about the US government plans to accumulate bad loans and “toxic” assets from financial insitutions the more it sounds like a galatic phenomena: a black hole.

    http://seattlebubble.com/forum/viewtopic.php?f=2&t=1840

  2. 2
    renter says:

    Wow there are lot of foreclosures. But why inventory in King County is still staying at 12.2K for last couple of months? Does any one know how many of the sales going on now are foreclosures?

  3. 3
    Ray Pepper says:

    I have 2 Buyers waiting to close on the Gig Harbor phase 1 development. They had 400 on the interest list. 70 showed up on opening day including myself and family. 17 were booked into contracts. Its down to 11 now. 2 are mine and the funny part is I got a reminder that if I sell 2 more, in I believe the next 3 months, I get a 10k bonus…So I say…2 MORE!! Hell, I’m representing 20% of their closings right now. I say I earned the 10k.

  4. 4
    jonness says:

    I have to admit, the entire time I have posted at SeattleBubble, everything I’ve said has been complete BS. I’ve been wrong, and I’m not ashamed to admit it. I’m left horribly ashamed wondering why I ever chose to stop believing in Santa Clause.

    Look, I’m not going to beat myself up too bad over this. How was I to know Santa was going to come down the chimneys of bank buildings across the U.S. and deliver a trillion dollars worth of free money to them. This is historically great news you guys. I love you Santa Clause!

    My GF and I will only have to pay our share of $7,000.00, and the banks can magically reverse their bad bets. I figure we can get this toxic bank debt loan payed off within the next 25 to 50 years. Of course, it does suck a little bit that we will incur massive interest in that time, and Santa will continue borrowing more money in our names. But at least Santa is real. That’s what’s important. Santa is real, and I can close my eyes and believe in him, and he’s there for me. This is almost as great as being Dorothy and clicking the heels of your ruby slippers 3 times and wishing “There’s no place like stuffing your toxic debt down the poor tax payers’ throats.”

    Life is wonderful! Close your eyes and believe, and your dreams will come true for you too.

    Santa, next Christmas I want a life sized blowup Sarah Palin doll. Please, please, Santa Clause. I promise I will never think for myself again, and I will toil myself to the bone paying off the trillions in debt you are incurring designing and building presents for the rich.

  5. 5
    Scotsman says:

    45 people laid off? Tim, you’ve got to stop pushing this doom-and-gloom, it’s going to have a negative impact on the markets! Try to focus on the 180 folks stilled employed. Think of the tax dollars they will be able to contribute to the economy and the coming bailout. Try to focus on all the summer homes those NY bankers will then be able to buy in the San Juan’s, and how it will help bolster the construction industry in Island County………. There, things are looking brighter already, eh? ;-)

  6. 6
    Jonny says:

    time to buy a fiddle.

  7. 7
    Jaz says:

    Luckily, the government is stepping in to save us all, so we’re probably at the bottom right now. Right?

    Yup, here comes the US Cavalry. Guess what? They’re riding pretty pink ponies!

  8. 8
    Eleua says:

    Paulson gets an unlimited (just $700B at one time) blank check and no judicial review.

    Great country. Destroyed by morons giving loans for bigger morons buying homes they cant afford.

    Don’t think I will shed a tear when the Boomers get stuck with the bill and we get an American version of Hitler/Stalin. America deserves this and I hope it pays dearly.

    Enjoy your homes and the nice view.

  9. 9
    Demersus says:

    Eleua,

    On your blog I don’t find any entries since August. Man, you’ve gotta elaborate on what you think of the events of the week.

    Personally, I’m both cheering for the collapse of our economy, which might spur a revolution, and hoping that I’ll survive it.

  10. 10
    Harley Lever says:

    Demersus,

    If the economy collapses you could witness revolution, mass starvation, disease, crime, and atrocities beyond your imagination… and you want to survive this. I think this speaks to all the Pink Pony haters out there. You may hate Seattle and crap on it’s passive aggressive existence. However to wish upon this country the atrocities, the anguish, and horror that areas like Darfur, the former Yugoslavia, and Chile under Pinochet’s existence only highlights your profound ignorance.

    Be so very careful what you wish for!!!

  11. 11
    Harley Lever says:

    Eleua,

    Come on, you have to know that the Baby Boomers will be long dead before this debt is paid off.

    The US has a long-standing precedence of this type of action. The main difference is before we were buying actual real estate holdings and selling at a later date as a profit. Today we are buying mythical assets based on nothing tangible and hoping that most of the unloaded garbage will be profitable in the future… sounds like the ultimate in Bush’s blunders. What’s another Trillion or two?

    This scenario highlights perfectly why there always has to be regulations and oversight. Greed and the overwhelming desire to beat the system is unfortunately innate to humans. Free market capitalism would be fine if everyone had integrity and kept and eye out for the masses and always sought a win-win scenario. Let’s face it, as individuals we are always trying to reduce our taxes as much as possible and increase our net. Corporations are looking to always push the limit to the letter of the law in order to benefit the bottom line.

    We will now enter a period of heavy regulation which will ultimately serve to stabilize the markets and help us find a bottom.

  12. 12
    BrianL says:

    1) Given the US trade deficit (and the resulting credit bubble is caused), we were going to collapse during some bubble. The housing bubble happened to be where it blew up, but its just a symptom of bigger issues.

    2) The cause of the housing bubble is well distributed, from government push to make mortgages easier to get to the need to inflate a bubble after the dot com explosion to the belief that by buyers and lenders that home value wouldn’t go down, etc. There is more than enough blame to go around and it hits almost everyone involved.

    3) Even when the housing bubble finishes popping, the US is going to have tough time for a while if it doesn’t figure out how to get imports and exports in line (ie stop borrowing money to fund consumption). We’ll still have plenty of deep economic problems to work through. In addition, the dollar probably won’t be the international buisness currency – our economy may not be the same for a long time. This is bad for everyone.

  13. 13
    Scotsman says:

    Harley-

    1. This debt will never be paid off.
    2. The country will eventually face revolution in some form, as…
    3. The present model no longer works.
    4. Boomer’s entitlement programs will be the first to go.
    5. Doubters, do the math. There are no winning choices.

  14. 14
    Eleua says:

    @Demersus #9,

    No time to update. I’ve been lobbying Congress and trying to stay one step ahead, or within a step, of the bailout machine.

    I’m going to post something in the next day or so. Synopsis:

    Enabling Act of 2008. If you don’t know what the Enabling Act of 1933 was, you should Google it. This is almost exactly the same darned thing. This WILL bankrupt the US. No doubt about it.

    My “20c on the dollar by 2010” thesis could come true by Christmas 2008. Im not kidding. It won’t stop there.

    This is Wall Street making one last grab, and it is the biggest in world history. This is the end game.

    How did they get away with it? All you idiots out there that thought you could consume your way to prosperity made this an inevitability. Everytime your asset values were threatened, you wet your pants and went crying to Wall Street to make it better. Wall Street had the Congress in their pockets. You “ownership society” morons think finance and economics are some cool, New-Age religion, rather than a science. It takes more than “believing.”

    Everything I have ever said about the banks is 100% true. “Rancid” is a word I have used, and it isn’t strong enough. When the truth hits, you will soil yourself in the fetal position.

    I fear what the next 2 years holds. It takes a lot to scare me, and I’m scared.

    Read the history of the Enabling Act. Be very scared.

  15. 15
    Eleua says:

    Scotsman #13 pretty much nails it.

  16. 16
    Eleua says:

    If the US rebuilds itself, the cornerstone of that rebuilding had better be a good, hard education in history and economic reality.

    There is no free lunch.
    Debt is the antithesis of wealth.
    Production is the path to true prosperity.

    The “ownership society” ignored all three.

    America is finished because our education failed us. Our citizens actually believed they could just “own” things and keep selling them in “Operation Enduring Bubble.” The government gave the people what they wanted, which was moral hazard upon moral hazard, bailout upon bailout, free lunch after free lunch.

    It wasn’t that we didn’t spend enough money on education, but that our dumbest, and most easily manipulated people went into teaching. They bought into all the crappy New-Age philosophies of teaching history from a “never again” perspective, rather than teaching those unfortunate events from the underlying human nature flaws that have existed since civilization began. We thought that as long as we didn’t repeat the mistakes, we would achieve some form of enlightenment that would take us to a new level of understanding. IOW, Humanism. New Age mumbo jumbo.

    In fact, we need to teach history as how the failed human condition relates to its environment and understand that we need to deal with the cause, rather than the symptom.

    Enough. Going to knock off for the night.

    Enjoy your view.

  17. 17
    David McManus says:

    Well put, Eleua.

  18. 18
    Old Ballard says:

    Eleua, and other believers in the Apocalypse,

    Libertarianism is a sociopathic disorder. We’re not living out the end of Atlas Shrugged where the heroes destroy humanity, to save humanity, for the sake of freedom. Capitalism and Human Freedom are not suicide packs. The people that live around you are real. Every bad things can happen as a consequence of the human suffering caused by an economic metal down. Turn to history you say. The German people were transformed after WWI in a way that no nation should wish on itself.

    Be every careful of what you wish.

  19. 19
    jon says:

    Every few decades there is a banking panic.

    For months now people have avoided buying a house because they know they can save some money by waiting a little longer. Last week that spread to the money markets as people pulled money out into cash to weather the storm. Problem is, that is the storm, because now there is no liquidity for businesses to operate. Paulson is correct that something needs to be done to restore confidence in the markets so we can get back to normal.

  20. 20
    LUC says:

    http://calculatedrisk.blogspot.com/2008/09/bailout-eligibility-expanded-to-foreign.html

    Bailout Eligibility Expanded to Foreign Institutions – U.S. taxpayers may bailout foreign financial institutions and even foreign governments.

    One word: Unbelievable!!!

  21. 21
    LUC says:

    U.S. taxpayers may bailout foreign financial institutions and even foreign governments.

    http://calculatedrisk.blogspot.com/2008/09/bailout-eligibility-expanded-to-foreign.html

  22. 22
    Angie says:

    Eleua, do I read correctly that you’re laying the blame for the uber-capitalist concept of an “ownership society” at the feet of humanists and New Agers?

    Better check your footings there, fella, I think your cannon is extra-loose this morning.

  23. 23
    LUC says:

    http://calculatedrisk.blogspot.com/2008/09/bailout-eligibility-expanded-to-foreign.html

    U.S. taxpayers may bailout foreign financial institutions and even foreign governments!!! Unbelievable!!!

  24. 24
    Matthew says:

    Jon,

    Why should anyone believe Paulson or Bernanke at this point? They have continuously lied to us time and time again:

    “Subprime is contained, the U.S. will avoid recession, strong economic growth predicted for the second half of 2008, financial markets are operating normally, etc”

    Eleua has been more right than Paulson so far.

  25. 25
    Sniglet says:

    Just a second folks… I have long been one of the biggest bears on SeattleBubble, yet I don’t subscribe to the theory that America is “finished”. We are most definitely going to be facing a depression, but we will come out the other side stronger.

    For one thing, it’s not as if other nations or regions are going to fare much better, or that their governments are SO much better at managing the economy (look at how China and Russia have been blatently manipulating their markets).

    I also don’t believe these massive bail-outs are going to create hyper-inflation: quite the contrary. All these bail-outs are being funded by huge bond issues which will actually prove the be extraordinarily deflationary by sucking what remains of private capital into the government sphere, preventing expenditure on other things.

    Further, these bail-outs will ACCELERATE the decline by making it even harder for private finance to function (e.g. who will get a private mortgage at 12% when they can get a government subsidized one for 5%).

    As hard as it may be to imagine right now, I believe that ultimately America will emerge as one of the strongest economies once again. I just lament the degree to which things will have to get bad in the mean-time, and how prolonged this downturn is now looking to be.

  26. 26
    Lanny Poffo says:

    Eula,

    You are right that debt is the Antithesis to Wealth, and that the true path to prosperity is production. With that in mind, isn’t there still a strong amount of production that if channeled correctly would offset some of this amazing debt that we are (have) accumulated? While I am generally bearish – I don’t see an apocalypse scenario playing out here. In fact while I do see a severe recession coming on, I don’t see it having the same impact as the depression. Here is why – I’d like to know your thoughts:

    One of the primary factors that made the depression so unique was that during that period of time, the largest form of economic production was agriculture and support industries around agricultural production (the agricultural-industrial-complex). During the 30’s and 40’s severe drought in the Midwest which impacted a significant amount of land under agricultural production had a tremendous impact – the Dustbowl. In the early 30’s Federal assistance resulted in over capitalization of continued agricultural production that was unsustainable – resulting in poor land management practices getting continued far longer than their economic feasibility. Thus when the environmental crisis hit, production took a huge hit resulting in severe economic hardship for those impacted and mass migrations. Those displaced struggled to find new opportunities and we can read about the stories in history from the migrant camps, displaced workers, the rise in unionization, etc…. Because the agricultural-industrial-complex was over capitalized, the resulting collapse was doubly severe because agricultural production could not continue for environmental reasons in addition to economic reasons.

    My basic point is that the Depression was unique because just as the financial crisis hit, the major production capabilities at the time were being knocked out as well. Today I don’t see this playing out. We as a nation can still produce. We can still make cars, write software, build houses, and so on. In the next ten years we may find that we are making cars, writing software, and building houses for Chinese companies, but we will still have jobs (fewer) and still have the ability to produce goods (fewer). While the entire housing-construction-industrial-complex has been significantly overcapitalized by easy credit terms and loose lending practices and needs to correct back to sustainable levels in order to get our economy back in balance, I don’t see a resulting decrease in production capability that makes a Depression era scenario feasible.

    So my rational thoughts on how Main Street Joe should react to make it through the next couple of years (and IANAE so take ’em w/ a requisite dose of skepticism).

    As an individual I should:
    – Boost the rainy day fund – if you don’t have one, start one, pronto.
    – Do go and stock up on some canned goods, stock the pantry with non-perishables. Who knows what short-term prices will do, best have some canned peaches stored away just in case.
    – Do cut coupons, ask for bargains, looks for ways to save money every day,
    – Pay down current debts to the extent possible, but have credit if needed,
    – maintain liquidity, but generate guaranteed levels of interest in insured accounts (such as Verity Credit Union, BECU, etc…)

    Do Not:
    – hold cash in a coffee can or under the mattress,
    – Invest in inflated price highly illiquid large transactional price assets (houses, yachts, luxury cars),
    – stock up on guns and ammo unless it is for hunting season, it won’t be needed.

    Anyway – just my 2 cents thinking about the current scenario rationally. I’d like to know your thoughts, and any area that you think this is off base, or missing crucial information that would change the day-to-day recommendations.

    Lanny

  27. 27
    Demersus says:

    To everyone whom wants to criticize the opinions of the likes of Eleua and myself; what the US .gov, the FED & the Treasury are doing is like trying to cure alcoholism by giving more alcohol. What we need is good strong medicine, and if that means the shakes, sweats and hallucinations, then that’s what it’s going to take to get through this. This is what I wish for; get through the tough times, teach irresponsible morons some lessons and make people become more responsible for their own actions. I have no debt, and I’m highly skilled in a technical field. I’m not very worried about myself, despite the fact that I haven’t amassed a large amount of wealth. I also didn’t amass a huge amount of debt. I gave up credit cards nearly a decade ago. I pay cash, cash only for everything and I save like mad now. I’m finally mature enough to read the tea leaves and take advantage of the situation like an intelligent, pragmatic PATRIOT OF THIS FINE COUNTRY! My positions and opinions are based on Tough Love, and a firm footing in reality. We can’t wish and hope our way out of this. We’ve all be robbed, our children have been robbed, their children have been robbed. For what, so some fuque like Lund can get a $20 Million bonus for screwing everyone?

  28. 28
    Demersus says:

    By the way, I’m mostly speaking directly to Harley in the previouus post, and to anyone whom shares his or similar opininions. Be careful what I wish for indeed!

  29. 29
    jon says:

    “Why should anyone believe Paulson or Bernanke at this point? They have continuously lied to us time and time again:”

    Do you write angry blog posts about how the weatherman lies to you day after day each time they get the weather forecast wrong? The economy is far more chaotic than the weather. This week was the result of a financial panic, which can come at any time and can destroy even good banks simply by the manner in which banks operate normally by lending out people’s deposits.

    The anger that people are going after each other these days is amazing. Everyone is calling everyone else a liar and saying they are out to gouge people. No doubt eventually people will get tired of that and will settle down and start working together again. Even Iraqis are working together now. It will happen here too.

  30. 30
    LUC says:

    Jon, so you’re saying that we should believe these guys now based on thier actions over the past year?? These guys are out to protect Wall Street and nothing more!! Do you realize that this bailout U.S. taxpayers may bailout foreign financial institutions and even foreign governments! Wake-up!!!

  31. 31
    jon says:

    “These guys are out to protect Wall Street and nothing more!! ”

    The reason they are trying to protect Wall Street is because that is the place where companies go to get capital so that they can hire people and make products, and then pay back the loan when the product is sold. We learned in the 30’s that if that system shuts down, millions of people will be out of a job for a very long time. So yes, they are trying to protect Wall Street, but a whole lot more besides.

  32. 32
    Markor says:

    Foreign banks will be bailed out too. Paulson says it shouldn’t matter to Americans. If you live in Sri Lanka, you get $$$ from future American taxpayers. Ain’t capitalism great?

  33. 33
    Robert Wojciechowski says:

    I have a question – would it be a problem if the govt stepped in and just gave complete bailouts to everybody facing foreclosure. So the govt would basically help all distressed homeowners.

    Normally it would mean lots of inflation. But here – the houses were already built and people are already living in them. They don’t have the means to pay them back. By paying off the loans we are not increasing disposable income for those people and thus we are not increasing inflation.

    The only thing this will do is to make real estate prices stable. And maybe people who slaved hard to repay their loans will feel bitter but that’s all. Maybe also some people will feel bitter who will not be able to afford expensive housing.

    But this will kind of cool things down. The treasury can print as much money as needed. They can also start doing all kinds of tax deductions for distressed homeowners.

  34. 34
    Markor says:

    Robert, anything that doesn’t make the rich richer is anathema to Republicans. Helping the average American is not going to happen. They only get the losses. Supposedly they get to keep their job too, but I doubt it.

  35. 35

    “I have a question – would it be a problem if the govt stepped in and just gave complete bailouts to everybody facing foreclosure. So the govt would basically help all distressed homeowners.”

    In theory, this bailout will have the government buy and then later sell these toxic debts, so that they will recoup their investment. If they just directly bailed out the homeowners, that would be less likely to happen.
    That’s the theory, and I disagree with it. in my humble opinion, the gonifs who created or mightily contributed to this mess are blackmailing the government and the taxpayers, threatening to take down the whole system, and we’re stuck between Iraq and a hard place.

  36. 36
    Yesler Hill says:

    I don’t think this is so easily dumped on the Republicans lap. It all started back in 1980 when a Democratic president and Congress abolished all federal usury laws. That opened the door to this disaster. Not to mention Clinton regimes repeal of the Glass Steagall Act in the late 90s.

    I agree with Eleua and co scritigue of the current financial system; but I do not think this is the fault of “humanism”. I do not think humans are inherently rapacious. Not like corporations without leashesa re. I think this all comes down to: at the ehart of capitalism is the drive to maximize profits, and even more specifically, to mazimize short term profit. So, when all the regs were lifted from capitalism, its natural tendency is to push and push and create more short term profit. Thus the CDOs, short selling, etc. This also tightened the grip of Wall Street on the government, Bush 43 haw been the hight of croyi8sm and kleptocracy. That is until they mess up so bad they need their cronies in government to socialize their losses. Privatize the resources and proseperity, socialize the pain and losses. Ah, there’s a truley perverse socialism for you!

    And as far as the Enabling Act of 1933. If Wall Street and Bush were going to do that, they would have in the aftermath of Sept 11.

    “Laisse faire capitalism” (Reaganomics) as an ideology has seen it’s day, and we can wave goodriddance to the corpse as we leave it behind.

    I think once people realize that if “socialism” is good for Wall Street, the rest of the country is going to want some of the same safety nets and assistance.

    The enduring scandal here is that instead of helping stablize the economy/housing market at the bottom of the pyramid, the government went directly to the top and bailed them out.

    It’s time for restoring a modified Glass-Steagall type system, and good old fashion trust busting.

  37. 37
    jonness says:

    I keep hearing about how the upcoming Alt-A loan resets are going to wipe out the housing industry. Why not do away with them?

    If the tax payers have to bail out the banks, shouldn’t the banks have to immediately turn every ARM taxpayer loan into a fixed rate at today’s low interest rate? Why should taxpayers have to pay high interest resets and also pay for all of the banks bad debts to boot? Wouldn’t this help stabilize the housing market and reduce risk exposure to banks?

    I don’t understand this completely, so any input is appreciated.

  38. 38
    jonness says:

    “Doubters, do the math. There are no winning choices.”

    Cost of bank rescue:
    1 trillion dollar bank bailout / U.S. Labor force ~150 million = $6,666.666… per person.

    Hey, 666 forever. Maybe Santa Clause is really the beast.

    Let’s look at the math for the Iraq war with a projected cost of approximately a trillion dollars (currently 600 billion).

    1 trillion dollar war in Iraq / U.S. Labor force ~150 million = $6,666.666… per person.

    Yep, 666 again. The math definitely checks out. Santa Clause is the beast.

    So the Iraq war and the bank bailout will cost American workers $13,000.00 (rounded) per person. Oh, my…13 is an unlucky number. I hope you’re not superstitious.

    Sorry for my somewhat whack sense of humor amidst tumultuous times. The numbers are funny though.

  39. 39
    Sniglet says:

    Yesller Hill wrote: “It all started back in 1980 when a Democratic president and Congress abolished all federal usury laws. That opened the door to this disaster. Not to mention Clinton regimes repeal of the Glass Steagall Act in the late 90s.”

    No, I don’t think the repeal of laws, or “deregulation”, had much to do with creating this debacle. Rather, it is the government’s involvement and interventions in the economy over the last 100 years that have led us to this state.

    The GSEs (e.g. Fannie/Freddie, FHA, etc) have been artificially subsidizing home-ownership, and encouraged over-investment in these sectors. The Federal Reserve has kept interest rates far too low, encouraging ever increasing amounts of credit creation which has driven up asset prices and mal-investments. And then there are the ratings agencies, that are HIGHLY controlled by regulation (even to the extent of having legal monopolies).

    The problem is the government intervention in the economy, so it’s hard to see how more of the same (i.e. with massive bail-outs and more muscular regulation) are going to help.

  40. 40
    Harley Lever says:

    Demersus,

    There is a major difference between tough love and outright carnage. You can stand on your self righteous pedestal all you want, but to outright hope for complete economic collapse and a revolution to teach us all a lesson is idiotic and beyond shortsighted.

    In a revolution as you describe it, your high tech job and money under your mattress will do nothing for you. Debt will not matter, only your ability to scavenge for food, survive marauding gangs, and to seek and secure shelter from the elements will. The only skill set you can leverage during war/revolution is survival.

    Based on your predictions then we should all purchase a cache of weapons, several years worth of canned foods, and create a fortified and defensible bunker system. Then we can hope that those who actually are left after your dooms day scenario will go on to teach everyone about the Real Estate Bubble.

    It is obvious that you have not contemplated the horrors of war and your statements are shameful. Clearly you have not learned the hundreds of lessons that history provides.

    You should think before you post.

  41. 41
    Sniglet says:

    There is a major difference between tough love and outright carnage. You can stand on your self righteous pedestal all you want, but to outright hope for complete economic collapse and a revolution to teach us all a lesson is idiotic and beyond shortsighted.

    I, for one, don’t “hope” for a complete economic collapse. However, I do believe that we ought to let the current economic crisis play through to it’s logical conclusion without any government bail-outs or interventions. Yes, there will be a LOT of pain (i.e. with most banks going bust, real-estate and stock prices crashing 90%, and tens of millions of people having their savings and pensions wiped out). That said, I don’t believe the results would be apocalyptic, or quite as terrible as some would have us believe.

    In any event, I really don’t think the bail-outs will actually prevent a dire outcome from coming to pass, and if anything only guarantees the end-game will be even more dire.

  42. 42
    Jonny says:

    Not more dire, sniglet. More protracted. The bummer is, with enough wishful intervention and politicking this could last for a decade or more.

  43. 43
    Scotsman says:

    Republicans? Democrats? Here’s how we got into this mess if you really want to know. Take half an hour to become informed and start dealing with facts.

    http://marklevinshow.com/wp-content/themes/levin/player/?url=http://podloc.andomedia.com/dloadTrack.mp3?prm=2824xhttp://abcrad.vo.llnwd.net/o1/levin/rss/levin09192008.mp3

  44. 44
    Scotsman says:

    Unintended consequences?

    Here’s something else to think about- this rescue will not only be expensive, but ineffective. Remember, when reading the snippet below, that Japan had a strong savings base, something the U.S. lacks. Our situation is likely to be worse.

    Treasuries Prove Irresistible as Deflation Bet Trumps Paulson

    By Daniel Kruger and Sandra Hernandez

    Sept. 22 (Bloomberg) — As details of Treasury Secretary Henry Paulson’s plan to revive the U.S. financial system by pumping as much as $700 billion into the markets emerged Sept. 19, bond investor Michael Cheah was reminded of Japan.

    When that country’s real estate bubble burst, leaving a trail of bad real estate loans, officials flooded the economy with cash only to see banks hoard the money instead of lending it out. The result has been a series of recessions and persistent deflation for more than a decade.

    “Although the government tried to debase the yen by printing a lot of government bonds, the economy went into a standstill,” said Cheah, an official at the Monetary Authority of Singapore from 1991 to 1999 who manages $2 billion at AIG SunAmerica Asset Management in Jersey City, New Jersey. “The banks used the money to buy safety. I see a repeat happening here. The banks will use it to buy Treasuries.”

    While U.S. bonds tumbled on the plan to buy soured mortgage-related assets from financial institutions in the most far-reaching federal intrusion into markets since the Great Depression, they still ended the week little changed.

    To investors such as Cheah, that’s a clear sign the economy is facing many of the same risks that have afflicted Japan. The yield on the benchmark 30-year Treasury bond, which stands to benefit the most of any government maturity from a drop in inflation expectations, fell to 3.89 percent last week, the lowest level since the U.S. reintroduced the security in 1977.

  45. 45
    Yesler Hill says:

    “The problem is the government intervention in the economy,”

    Hmmm, well, I’m always most interested in history, as compared to theorizing.

    If we look at the last 30 or so years of US economic policies, we see them completely focused on propping up their friends/donors, and reducing regulations on their friends/donors. Now, we see that the friends/donors have collapsed under the weight of their greed and rapacity. I’m not seeing the over regulation? I’m seeing the government bailing out their kleptomaniac friends, I’m seeing the greatest redistribution of wealth in US history (all upwards to the top 1%). And when I talk abt regulation, I’m not talking abt making things easier for the “banksters” like the last 30 years, I’m thinking more in the public interest, instead of more in the corporate interest. More Ralph Nader, less Alan Greenspan.

  46. 46
    Mikal says:

    Not all banks are having trouble. Wells Fargo and US Bank are looking to add other banks for penny’s on the dollar. Travelers, Chubb, and Ace Limited Insurance are in good shape. They didn’t insure companies profits like AIG. I wonder if this isn’t more of a bail out for the connected. US corporations have $14 trillion in cash saved so don’t need as much liquidity to stay going. Others saw this coming also. I can’t quote very well because I’m nearly on my third game of drinking, but this was all in the Minnesota Star Trib business section. Some makes sense. It will be an interesting 6 months. The Vikings are NOT going to the Super Bowl.

  47. 47
    mukoh says:

    Eleua, sorry was reading a lot of your posts until it was really hard to put the tin foil on my head.

  48. 48
    Markor says:

    Yesler Hill: I don’t think this is so easily dumped on the Republicans lap. It all started back in 1980 when a Democratic president and Congress abolished all federal usury laws. That opened the door to this disaster. Not to mention Clinton regimes repeal of the Glass Steagall Act in the late 90s.

    7 years was long enough for Bush to change anything that wasn’t working, esp. since the Republicans controlled Congress for most of that time. Republicans always blame someone else for everything that goes wrong on their watch.

  49. 49
    Markor says:

    jonness: 1 trillion dollar war in Iraq / U.S. Labor force ~150 million = $6,666.666… per person.

    Make that $5 trillion. $2 trillion so far. $33K per person, but with interest it will likely be $100K per person. Which means that only a small percentage of Americans under age 50 today will ever retire. Most will work until they die.

  50. 50
    Ray Pepper says:

    All aboard!!!!!!!!!!! So whose Long WM, WB, NCC, BAC, USB, WFC, ……..up up up!! Who else has been trading this bottom over the last 4 weeks! Giddy up!

  51. 51
    Markor says:

    Scotsman: Republicans? Democrats? Here’s how we got into this mess if you really want to know. Take half an hour to become informed and start dealing with facts.

    Regardless who’s to blame, we know that Republicans are responsible for the loss to the taxpayers, because the bailout will be shoved through by them, and the taxpayers are getting virtually nothing in return. Why won’t the banks have to pay off the losses to the taxpayer over time, even if they just make small payments over 100 years? Obviously, that wouldn’t break them today. But that won’t happen. Instead just the losses will be foisted on the taxpayer, and Republicans have made it clear that they’ll blame Democrats for anything bad that happens to the economy if they don’t approve the bailout. Plus, bailing out foreign banks? Give me a break.

  52. 52
    Harley Lever says:

    Scotsman,

    I just listened to your ultra-neo-con Republican rubbish. I find it hilarious how he pins everything on the Democrats stating that the Dems blocked the Bush government in 2003 from creating an oversight committee for Fanny and Freddy. I think he forgets that the Republicans had the majority in congress for the last 12 years. George Bush was the biggest proponent of home ownership. http://www.reuters.com/article/pressRelease/idUS240875+29-May-2008+BW20080529

    I love how he paints George W. as the great gate keeper of the money and symbol of fiscal responsibility. He can scream as loudly as he wants, but it doesn’t make him correct or any of his lies true. The fact that you buy into any of this crap says a lot about you. Thank you for the insight.

    While I am not a huge fan of the Dems, have some integrity before trying to think we are so stupid as to believe Rush Limbaugh’s little cousin Mark Levin is a straight shooter.

    When you stop making out with your Shawn Hannity doll and fantasizing over your Karl Rove posters please provide a link to a more balanced truth-laden perspective.

  53. 53
    Markor says:

    jonness: If the tax payers have to bail out the banks, shouldn’t the banks have to immediately turn every ARM taxpayer loan into a fixed rate at today’s low interest rate? Why should taxpayers have to pay high interest resets and also pay for all of the banks bad debts to boot? Wouldn’t this help stabilize the housing market and reduce risk exposure to banks?

    I don’t understand this completely, so any input is appreciated.

    The whole point of the bailout is to shift losses from the rich to the general taxpayer. Your proposal would not do that, hence it won’t happen. Half the nation doesn’t appreciate it yet that Republicans are crooks. Republicans are completely focused on transferring money from the Treasury to their buddies. Look at Paulson reprimanding Democrats for even thinking about giving the taxpayers anything in return for their money, making it sound like there will be global disaster if even another day is wasted before unconditionally accepting the Republicans’ demand. That’s the Republican way. It worked for the $5 trillion giveaway to the rich called the Iraq war, after all.

  54. 54
    Mikal says:

    They can’t be crooks, they go to church.

    HAHAHAHAHAHAHAHAHAHAHAHA.

  55. 55
    Scotsman says:

    Markor- I believe it’s the democrats- Nancy Pelosi, Harry Reid, Charles Shumer, and Barney Frank who are pushing this bill. Name one democrat who is opposed.

    Harley- Mark Levin is a lawyer who deals in facts, inconvenient tho they may be to your preferred view of reality. While I’m no fan of his presentation, his research is excellent. The truth hurts.

  56. 56
    mukoh says:

    To Ray #47
    I loved it 72.5% in two days on WM.

  57. 57
    Eleua says:

    For those that are interested, I have posted my response to the MOAB (mother of all bailouts) on my website.

    I don’t have time to respond point by point, as has been my practice on SB. Let me say that for those that still believe the current debt structure of your homes is sustainable, I am left with no other conclusion that you are either a functional idiot, or so indebted that you have no choice but to “believe.”

    Pardon me for tooting my own horn, but I am one of the original “regulars” here at SB, and have been very open and plain about my predictions and the methodologies behind them. With the exception of calling 4 sigma events within a very short window, my accuracy rating is virtually flawless in these matters. Yes, I am saying that.

    It is either on SB or RCG that I have stated that the FEDERAL RESERVE would be bankrupt by September 08. These predictions were made in the winter/spring time frame, and I am correct. You are going to wake up to a different world in very short order, and this descends directly from scads of economic and historical dolts spending their way to prosperity. This madness was caused by you, not the naysayers.

    Paulson and Bernanke have been 100% wrong since March of 2007. The entire time, they have testified under oath about the health of the banking system and the US economy. They have lied.

    Go to FEDUPUSA.org and see for yourself.

    Call me arrogant, or call me an a-hole, I don’t care. I have spent hours on SB trying to educate people of the fraud they are buying, and many have seen it as beneficial time spent. I hope I have enriched your lives and you are better off for our encounter. I am better for knowing all of you.

    Then there are the morons.

    To the later, I say, “Enjoy your view.”

  58. 58
    Ray Pepper says:

    Mukoh, I couldn’t gamble on WM. For me it was WB. I always loved World Savings/Golden West and the Cosi loans. They always had such conservative appraisals and required its investors to place 30% down. I thought it got way over blown at 10.00. I was in out 6 x. Currently hold no positions other then my 85k of EGHT long at 1.03. I also was in /out of ABK from 2-9. It has been the greatest trading environment both long/short since 2000. Futures indicate a slight down open but I’m ready to go Long on any dips. Watching NCC now.

  59. 59
    Mikal says:

    Eleua, If you were really that smart, why didn’t you buy a bunch of properties and sell just before the deflation? Sounds a bit moronic. You could have made a killing. The democrats are trying to hold up this legislation right now.. The Republicans are responsible for ninty percent of this mess with the deregulating. I give ten percent to Clinton for signing that banking law.

  60. 60
    Eleua says:

    Mikal,

    Why do that when put options are more liquid and a much greater bang for the buck?

    Before you start calling me a moron, perhaps you should do a search of SB where I was giving seminars on how to do exactly that.

  61. 61
    Eleua says:

    Mikal,

    I give 100% of the blame to idiots that thought they could “live” their way to prosperity.

    BTW, Synthetik is going to rip you a new one when he reads #56.

  62. 62
    Mikal says:

    Then he is a moron. No regulation equals mass corruption. This has been proven over and over again.

  63. 63
    Markor says:

    Scotsman: Markor- I believe it’s the democrats- Nancy Pelosi, Harry Reid, Charles Shumer, and Barney Frank who are pushing this bill. Name one democrat who is opposed.

    It’s been made clear to the nation that Democrats will be responsible for all economic woes henceforth if they don’t give Bush/Paulson unconditional authorization for this bailout. Just like it was made clear to the nation that Democrats would be responsible for all terrorist acts against the US if they didn’t give Bush unconditional authorization for the Iraq war. In both cases they must decide immediately, time is absolutely critical. Whenever Republicans are in the White House, there is a constant stream of extortions in the guise of national emergencies. It’s a page taken right out of 1984.

    That said, every one of those Democrats needs to be kicked out of office, for having no spine. Pelosi should be making a special address to the nation and pointing out in 30 seconds or less that it makes no sense for the banks to never have to repay any of the taxpayers’ losses from this bailout.

    Lots of Democrats are opposed; they are the true liberals. Not all Democrats are liberals. Still, Pelosi et al are not the ones doing the extortion. They are spineless but they are not the crooks. Democrats are still the best viable choice for the nation.

  64. 64
    Mikal says:

    BTW your approach comes off as alot of hot air. No offense.

  65. 65
    Eleua says:

    Pelosi needs to release a transcript of the meeting she had with Paulson and Bernanke. Anything short of that is nothing more than tryanny.

    Sunshine is the best disinfectant.

    If she does, there will be 300million people with pitchforks and torches.

  66. 66
    Harley Lever says:

    Scotsman,

    Step away from the Kool-Aid.

    How much research could he have done when in 2003 the Republicans controlled the House, the Senate, and the presidency. The Democrats could not block anything. How could YOU not know this?!?!

    This guy is an idiot with a microphone who has caught the ear of morons who blindly regurgitate his neocon psycho-babble. He is an entertainment personality who knows that his listenership will go up the more outlandish and off-base his statements are. The dangerous part is that some people are stupid enough to actually believe what he says is remotely true.

    Have you ever considered researching his assertions?

  67. 67
    Harley Lever says:

    Eleua,

    Just one question.

    Did you wink at yourself before you kissed the mirror after penning #54?

  68. 68
    Eleua says:

    Harley,

    I lit up a cigarette and sent myself a dozen roses.

  69. 69
    Sniglet says:

    Yesler Hill wrote: If we look at the last 30 or so years of US economic policies, we see them completely focused on propping up their friends/donors, and reducing regulations on their friends/donors.

    Sure, there was tweaking (or relaxing) of some regulations over the last 30 years, but they pale in significance to the continued expansion of government economic interventions. The GSEs (i.e. Fannie, Freddie, FHA, etc) continued to expand their portfolios, and dominance of the mortgage markets, injecting HUGE amounts of credit into the financial system. The Fed also kept interest rates at unconscionably low levels for ages, which also goosed credit creation.

    Even worse, the FDIC, SIPC, and various other government insurance schemes has to a complete abandonment of responsible investing as individuals have decided that the financial prudence or safety of the institutions they do business with is irrelevant (i.e. since the government will bail them out anyway).

    It is all these government guarantees and subsidized credit that are the root evil behind this mess.

  70. 70
    Scotsman says:

    Harley- are you just going to call names and re-assert the democrat’s talking points, or do you have a specific refutation of one of the points that Levin brings up? …………..

    I thought so. Take care.

  71. 71
    Harley Lever says:

    I thought that the FACT that the republicans controlled the Congress, the Senate, and the Presidency was good enough proof that his assertion that the 2003 bill was blocked by Democrats would be enough. Do you not understand that in 2003 the Republicans could do anything they wanted?

    What more proof do you want that he was lying through his teeth.

    I know, next you will be telling me how Shawn Hannity and Ann Coulter say it’s the Democrat’s fault too.

  72. 72
    david losh says:

    None of you perdicted this.
    It’s $700,000,000,000.
    The National Debt will be raised by $1,000,000,000,000.
    Did I get the zeros right because dealing in hundreds of billions is hard for me to comprehend.
    Debt I get.
    Our government wants to add a trillion dollars of debt to bail out the George W. Bush economic plan of the past seven years.
    This is a Bush thing. Congress went along.
    No one saw this coming.

  73. 73
    EconE says:

    Republican, Democrat…whatever…climb to the top of either pyramid and what will you find?

    Uber-rich people….for the most part.

    It’s all about the $’s IMHO.

    So…let’s think about how these uber-rich might benefit themselves while at least keeping the social fabric intact. What would you spend your $700 Billion on? What kind of toxic mortgages would you want to buy up for 30-50 cents on the $?

    I know what I would buy.

    Let’s look at a typical scenario.

    2000: Joe & Jane buy a nice $400k house. They put down 100k and like most people, stretch a bit (what can I say…human nature?) for the traditional 30 year fixed mortgage.

    2004: Joe & Janes 400k house is now worth 800k. They decide to sell and move up. They have $500k to put down on a house but nothing until 1.1Mil Seems worthy, as their house…after all…was an $800k house when they sold.

    So…Joe & Jane decide buy that 1.1M house and take out a juicy $600k option ARM with a $1600 minimum payment.

    2008…Joe and Jane realize that their payment is going to recast & reset soon so they put their house on the market for $1,995K. They now owe almost 700k or so because of the negative amortization.

    Later in 2008…Joe and Jane start dropping their price all the way down to $1,500k (bless their generous hearts) They need to get out as they know that they can’t afford the payment more than doubling but they are hesitant to lower their price further. After all…this is a good neighborhood. Prices can’t come down that much here…and what on earth would the neighbors think? They’re probably not all that happy about the $500k price drop. Would they be invited back for cocktail parties?

    Ok…I digress…let me put on my evil bankers hat now.

    THESE are the loans I want to buy!!!

    A $700k loan on a house that these schlubs (and all their neighbors) think is worth $1.5-$2 Million?!?!

    And at 50c on the $?

    Banks…foreclose on those option ARM holders in the price range post haste. Don’t drag your feet. Kick ’em out PRONTO!

    I’ll take that loan for 350K…sell the house for 700k and double my money. Not to mention…there TONS of them out there. SWEET!!!

    So…Houses similar to those currently listed for 1.5Mil to 2Mil are now selling at 700K courtesy of the .Gov. LOT’s of them!

    Government makes huge profits.

    Bankers Make profits too.

    Executives are still paid obscene salaries.

    PEOPLE still have jobs and more of their 401k/pension/whatever than they would have had they (The Gov) let it drag on for any longer than it had to.

    Didn’t Paulson say that with his idea that he may be able to find a “bottom” in housing that could be measured in months rather than years? Perhaps this is his plan.

    One think it won’t do is keep housing prices up. And their won’t be a “bailout” for people who bought Million$+ homes….nor will there be much sympathy for them. After all…these aren’t the ‘po folk losing their homes….it’s the “rich”.

    And besides…now these “rich” folk can buy a house in a year or two that’s the same one (or at least similar) for less than they originally spent, so, it’s not like they are getting the short end of the stick either.

    IMO, Paulson just put the bubble into “hyper-deflate” only because the Realtors and the Sellers couldn’t come to grips with the fact that their house just isn’t worth what they think it is. If homes aren’t getting sold, then the government is just gonna have to step in and set the market price for them.

    Sure hope the sellers can beat the governments pricing! Time is running out.

  74. 74
    Scotsman says:

    Harley- No, control of both houses, etc. doesn’t mean anything. Look at the majorities the Dem’s have now, and how much have they gotten done? Despite majorities, one still has to overcome the committee process, parliamentary procedures, all the other garbage that may get attached to your bill and make it impassable, etc. You’re smart enough to know it’s not so simple. Try again.

  75. 75
    jonness says:

    IMHO, having a recession every so many years is a healthy thing. It cleanses the impurities from the system and places the economy in a state of homeostasis so it can begin rapid expansion.

    I’m blown away that many people view recessions as horrible and to be avoided at all costs. Where did this thinking come from? And why are our national policy makers absolutely convinced it’s the best way forward? Is the fact that we avoided the full impact of the 2000 recession by creating an asset bubble that led us into the worst financial crisis since the Great Depression not proof enough that recessions are a healthy part of an economic cycle and should be embraced at all costs? The truth is, we should have taken our lumps back then, and we wouldn’t be in this compounded mess. Borrowing more money to avert another recession is not the answer.

    Let’s talk about borrowing money to avoid recessions. Reagan ran for office on the platform that the Democrats had acted fiscally irresponsible and ballooned the national debt to levels that threatened to collapse our economic system and result in horrific financial apocalypse. People were scared of recession and turned to the proven fiscally conservative republican party to crack down on wasteful spending and trim the fat. But the truth was, our debt at that point in time compared to the nation’s annual income had reached its lowest point since 1931.

    At any rate, Reagan’s pet college theory of trickle-down economics was about to be put to the test, and he was bound and determined to prove it worked at all costs. Unfortunately, the cost was implementing the steepest upward rise in debt since the end of World War II (and Reagan did it during peacetime). By the time Reagan and Bush Sr. vacated the white house, these supposed fiscally conservative republicans had ballooned the debt from less than 1 trillion dollars, to over 4 trillion dollars–a greater than 4-fold increase!

    What’s worse, they shifted the republican party from a belief in fiscal conservation to believing borrowing huge amounts of money from foreign countries to give to rich corporations is good for the economy and will create lots of jobs for poor people. When Reagan took office, the Unemployment rate was 6.3%, and it averaged 7.5% over the course of his presidency. That’s not exactly what I call worth increasing the debt 4-fold so the profits can trickle down in the form of American jobs.

    Fortunately, by the time Clinton took and left office, the government had managed to balance the budget, and the debt was $2.4 trillion lower than projected to be when he first took office. He announced, “We should take advantage of this historic opportunity to use the benefits of debt reduction to extend the life of Social Security and Medicare and pay off the entire national debt by 2013 for the first time since Andrew Jackson was president,”

    During the upcoming election, Bush Jr. and Gore promised to keep on track with Clinton’s agenda of paying off the debt and to keep their greedy mitts out of the Social Security and Medicare trust funds. However, when Bush Jr. took office he proclaimed paying the debt completely off during the proposed time frame was impossible, so he promised atonement for his father’s sins by paying off everything but $1.2 trillion dollars. The next step he took was to rob the social security and medicare trust funds and begin record deficit spending that made his father’s previous record pale in comparison. And that brings us to the present.

    People have gone along with all of this spending, in part because they felt a need to save their children from Iraqi WMD’s and other must have purchases like the current bank bailout. But the time has come to pay the piper for our sins of the past, because each time we avoid the spanking we’ve got coming for making stupid decisions, the spanking we have coming compounds. And right now, it’s at a point where we will barely be able to stand it. Thus, it is critical that we don’t allow it to get worse.

    I don’t know about anyone else, but anytime someone in authority over me who holds absolute power informs me they are going to borrow huge amounts of money in my name to give to corporations, and that we must act fast without fully thinking through the alternatives, I call BS. Reagan rocked our country with fear of drugs and launched a plan to spend a trillion dollars to cure a medical disease with law enforcement. People are really gullible. When Iraq came along, I saw the same pattern of scared sheep in need of making a quick decision to borrow another trillion to keep their children safe, and I warned my friends and acquaintances that we were not being told the truth about WMD’s. For my efforts, many people thought of me as an unAmerican alarmist. Today, I see hundreds of millions of scared sheep in need of making a quick decision on spending another trillion dollars to bail out the banks. Nothing ever changes. Sheep will agree to anything if you scare them enough. Hitler proved it, and we continue to pledge our obedience toward his brilliant policies on mindwashing sheep.

    My advice is to never make an important decision when you’re gripped with emotion. IMHO, bailing out the banks in the proposed manner is a huge mistake in a series of monumentally poor decisions. At a minimum, if this decision is to be made, it should not be made by the same baffoons who created the problem in the first place, and it should not be made by anybody with any tie what-so-ever to the banking industry. That much is clear.

  76. 76
    rent for now says:

    I will be watching for the bond market to sell off if this plan is approved. This is an unbelievable amount of junk to be put on the balance sheet of the US.
    Rates rise, mortgages higher
    Homes harder to afford
    Prices lower
    Not a great plan….naturally, you can’t “force” the market higher.
    If we enter a 20-30 cycle of higher interest rates, the opposite of what has occurred with rates during 1980-2003, this will be a very long and difficult recovery.

  77. 77
    Scotsman says:

    This bailout is mess that will accomplish nothing good, but will ensure that:

    The inevitable will be put off, but only for a year or less.
    Transparency will not be improved, trust will not be restored.
    Home prices will not stabilize at current levels. Remember affordability?
    The dollar will go down, and many of our prices up.
    Interest rates will go up.
    Taxes will go up.
    Taxpayers will bear the cost of banker’s bad decisions, not lenders.
    Knowing the .gov is there to save them, system risk will go up.

    In short, everything the bill was designed to fix…. will get worse.

  78. 78
    EconE says:

    Frank and Honest conversation between Option ARM holder and Evil Banker.

    The option ARM holder can be the same couple in the scenario I used in comment #70

    OA: “But EB…why can’t you just do a loan modification? Can’t the courts demand that?”

    EB: Well OA…you have to understand….you can only afford a $400k mortgage. If we sell your ($1.5MM list) house for $700k to a qualified buyer who puts down $200k not only do we get an immediate $200k but we have a pretty rock solid $500k mortgage…after all…we even had the applicant get a colonoscopy so that we could be sure that they would outlive their mortgage…you know…American diet and all that. Besides… we would make more money this way than if we just modified your mortgage to $400k. It’s for the greater good of the global economic system. Not to mention we just can’t tie up the courts with all of this and the court costs alone would be astronomical. Don’t worry however…save up for a couple years and you’ll get a similar house for $700k…trust me…there will be plenty

    OA: “I think I catch your drift EB…you’re not so evil after all”

    EB: No Sh#t OA…and if you don’t mind me asking…what in hades were you thinking when you even paid 1.1 Million for that shack?

  79. 79
    Harley Lever says:

    Scotsman.

    No one stood in their way. Tell me who was blocking the Republican Congress, Senate, and President in 2003.

    All of the committees were run by Republicans because they get to appoint their Republican buddies to Chair the committee.

    Have you ever heard of a veto? Well George Bush didn’t use a veto until 5 years into his presidency. Why, because the House and the Senate was controlled by Republicans and they got what the wanted and were completely unchecked.

    During the final two years of the Bush Blunder the Dems lack the the two thirds majority vote to override a Presidential veto. That president guy, George Bush, well he is a Republican and doesn’t like the Dems all that much, especially their policies. So when the Democrats put forth a bill that doesn’t help Haliburton, Blackwater, Exxon, and helps the middle class, he takes out the big veto pen and talks about how the Democrats are trying to “Spend up a Storm”. Fortunately for George and his buddies, he had a good 6 years with little to no resistance. 2002-2006 were especially good times for him because the Republicans controlled everything.

    Seriously Scotsman it is time to start reading up on this stuff… the election is just around the corner!?!? Also, try listening to news shows from all perspectives. The truth is generally somewhere in the middle of the to rhetorical poles.

  80. 80
    Ray Pepper says:

    I’m fascinated by all that predicted this. I would have been a multi- millionaire if I knew WA MU was going to less then 2.00 2 years ago. The same for AIG, FNM, FRE, AIG, etc… This reminds me of the Yahoo message boards that I have read for titillation for 15 years. Lots of calls but nobody put the money where their mouth is.

    All that knew this was coming why not post what it was that you did 2 years ago and how you have profited greatly from this. I suggest a butt load of Monday Morning quarterbacks are here. I personally sold off 6 homes in the last 3 years which left me with 17. Over the past 10 years everytime I sold I kicked myself a year later because they all went up. Did I know what was going to happen? Hell – no! If I did I would never be here. I would be living in Maui !!

    Well, I always believed in this…….Profit taking. I always took profits. During the internet bubble and the housing bubble. What I’m left with is a very profitable portfolio and great rentals that in the last year I have raised an average of 13% in rents.

    What I say to all the predictors is this. Look forward and tell us how you are playing the mkt and real estate. I continue to say grind them down and buy GEMS in the years to come. Play the financials in the short term and follow the money and volume. As a momentum trader for 2 decades I value the flow of funds. Why am I loaded with 85k in EGHT? The same reason I have played Poker for 22 years. I have gamble in me. You have to be in to win. Long or short bring something to the table that I can Bank on.

    I know I know America is dying. Were all going Broke. Stagflation, recession, Good Lord–Anarchy…Its all BS. Tell us where you have placed your bets. If you are putting it in a mattress thats OK too! But, the money talks. Predictions with no monetary backing are as useless as me being at the Reno Rib cook off and being a vegetarian.

  81. 81
    Matthew says:

    Jon,

    I am calling b-52 Bernanke and Hammerin Hank Paulson liars because they have done just that, LIED, under oath, time and time again. It’s not an angry blog post, just the truth.

    They are both liars. They have more data at their disposal than anyone else on this blog, and yet they testified time and time again before CONgress, that this whole mess was contained.

    LIARS. Chose to believe them at your own risk.

  82. 82
    Scotsman says:

    Fine, Harley, here ya go. My apologies to everyone else. Here’s the history of the whole mess. Note who proposed the legislation, and who opposed it. Here’s my favorite quote:

    ” Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation.

    The republicans were able to get the bill passed, after the teeth had been taken out.

    From late 2002 through 2007 Bush White House supported controls on Fannie and Freddie. Here’s the timeline:

    “….. what we saw firsthand at the White House from late 2002 through 2007: Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises, known GSEs.

    The crux of their concern was this: Investors believed that the GSEs were government-backed, so shouldn’t the GSEs also be subject to meaningful government supervision?[1]
    From New York Times article written by Stephen Labaton and published on September 11th, 2003:

    The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

    Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

    The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

    The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac—which together have issued more than $1.5 trillion in outstanding debt—is broken. [2]
    It is no surprise who stood to resist these responsible controls on Fannie and Freddie: the Democrats. These Democrats stood to resist controls so they wouldn’t reverse their demands that everyone own a home, including those who couldn’t afford them.

    Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

    ‘’These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,’’ said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘’The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’’

    Representative Melvin L. Watt, Democrat of North Carolina, agreed.

    ‘’I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,’’ Mr. Watt said.[3]
    Bush was so committed to reversing the current policies that he withheld nominees for Freddie and Fannie, preferring good policy over partisan politics.

    The administration did not accept half-measures. In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill, and Fannie and Freddie’s lobbyists set out to weaken it. The bill was rendered so toothless that Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead.

    During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation.

    The president’s budget proposals reflected the nature of the challenge. Note the following passage from the 2005 budget: Fannie, Freddie and other GSEs “are highly leveraged, holding much less capital in relation to their assets than similarly sized financial institutions. … A misjudgment or unexpected economic event could quickly deplete this capital, potentially making it difficult for a GSE to meet its debt obligations. Given the very large size of each enterprise, even a small mistake by a GSE could have consequences throughout the economy.”

    That passage was published in February 2004. Dodd can find it on Page 82 of the budget’s Analytical Perspectives.

    Bush got involved in the effort personally, speaking out for the cause of reform in December. He even mentioned GSE reform in this year’s State of the Union address.

    How did Fannie and Freddie counter such efforts? They flooded Washington with lobbying dollars, doled out tens of thousands in political contributions and put offices in key congressional districts. Not surprisingly, these efforts worked. Leaders in Congress did not just balk at proposals to rein in Fannie and Freddie. They mocked the proposals as unserious and unnecessary.

    As recently as last summer, when housing prices had clearly peaked and the mortgage market had started to seize up, Dodd called on Bush to “immediately reconsider his ill-advised” reform proposals. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said that the president’s suggestion for a strong, independent regulator of Fannie and Freddie was “inane.”

    Sen. Dodd wonders what the Bush administration did to address the risks of Fannie and Freddie. Now, he knows. The real question is: Where was he?[4]
    Dodd was busy gaining the most donations from Fannie and Freddie of anyone in Congress, followed in second by Obama.”

    There ya go, Harley- ’nuff said.
    __________________

  83. 83
    jon says:

    “They are both liars. They have more data at their disposal than anyone else on this blog, and yet they testified time and time again before CONgress, that this whole mess was contained.”

    From what I can tell, Bernanke said in March 2007 that the economic problem was contained to the subprime market and had not spread to the overall economy. Technically speaking, that was true at the time, but obviously if he had a crystal ball he might have been more aggressive in taking action. Has he said anything similar since? That statement has been repeated incorrectly many times since, but has Bernanke said anything about being contained since?

    Was there really anything that could have been done back then by the government to avert the crisis? Housing prices had already bubbled. Sure, they could have raised lending standards, but where would the political will have been to cause a correction rather than waiting for it to happen? Would it have been less severe to pop it 18 months ago? Prices are already back to 2006 levels and it is the losses going forward that are causing the problem. How far back in time would you have to go to pop the bubble and prevent major losses? 2005? 2004?

  84. 84
    Markor says:

    rent for now: If we enter a 20-30 cycle of higher interest rates, the opposite of what has occurred with rates during 1980-2003, this will be a very long and difficult recovery.

    This is almost certainly what will happen. Investors in US debt will demand higher returns after the US increases its debt by 10% with this bailout. Any attempt by the US to keep interest rates low will add upward pressure on them, so they’ll reach a higher point when the dam breaks. Republicanism always fails eventually.

  85. 85
    Harley Lever says:

    Scotsman I actually read the article and Fannie and Freddie supported Bush’s proposal. This is just another sad attempt by Republicans to distort the truth. “We tried to save Freddie”. The truth is they were trying to abolish HUD and the Democrats were trying to protect lower income families ability to purchase homes. http://thomas.loc.gov/cgi-bin/bdquery/z?d108:HR02803:@@@D&summ2=m&

    “Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration’s package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company’s mission.”

    “Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ”responsible proposal.”

    At the time they were concerned about Freddie’s Enron like accounting practices and the fact that they were not hedging against higher interest rates. It had nothing to do with what was going on in the non-GSE financial sectors. Even if it were passed they would not have been protecting themselves from the subprime market as they were purchasing the crap loans from the mortgage lenders and packaging them as mortgage backed securities.

    “A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.”

    What you cited is another Republican smoke show. The only person to put forth legislation after Bush’s “Supposed Concern” was a Deomcrat: http://uspolitics.about.com/b/2008/09/18/republican-congress-talked-about-financial-reform-but-did-nothing.htm

    Got to love those lairs!

  86. 86
    Markor says:

    jon: Was there really anything that could have been done back then by the government to avert the crisis?

    It’s an opportunity to make the rich richer, not a crisis. If it was a crisis then the banks would not be able to dump their losses on the taxpayers without giving anything in return. Republicans create “crises” so they can profit from them. The Iraq war was their biggest score to date. It’s not a coincidence that this “crisis” happened one week before Congress was to recess until the election, and now Paulson is giving them one week to approve or else be blamed for anything bad that happens henceforth.

  87. 87
    mukoh says:

    Ray, I myself loved Wamu, bought a two thousand at 2 and change knowing it would most likely be a loss, and would have the usual pretty certificate hanging on my wall much like others, but on Friday can’t be that bad walked out with 70+% gain.
    One week. Its fun.

  88. 88
    Ben P says:

    Jon,

    I can’t for others who oppose Paulson’s abomination, but I don’t have a problem with a bailout of some sort. I agree it is necessary.

    However, I have a huge problem with the current plan which might be the single worst piece of legislation proposed in US political life I have ever seen.

    Simply, it is not acceptable to ask each American, effectively, to give $2000 to irresonsible and reckless bankers with no strings attached.

    It IS legitimate to take significant action to stabilize the banking system. But a significant quid pro quo is required. Really, any troubled bank should be temporarily nationalized and then sold off. That would be my ideal fix. But barring that, the banks that f***ked up have to be punished for their mistakes in some way.

    The current plan doesn’t do this. Most people don’t think it is acceptable to give poor people government handouts indefinetly in this country. That was the premise of welfare reform. This goes doubly for wealthy banker/wall street folks.

    Paulson’s plan is basically post-modern feudalism. The average tax payer paying a tithe to the rich and powerful so they can “protect” us. An abomination.

  89. 89
    jonness says:

    “Tell us where you have placed your bets.”

    Oh, so you don’t think I can predict the future and place my bets accordingly. I’m actually pretty good at it. Allow me to predict your future so that you can place your bets upon it. You’re going die of a horrible disease Ray. You’ll be old, and your flesh will be rotting off your bones while your still breathing. The rotting flesh will emit an offensive odor that makes your grandchildren reluctant to visit you in your assisted living quarters. You’ll be in indescribable pain and on morphine in an attempt to not suffer so bad. Your nurse’s aides will hold it against you while they change your diapers because you won’t be able to hold your bladder or your bowels, so they’ll mistreat you when they come into your room. You will brag to them about all the money you made when you were their age, and instead of being impressed, they will treat you worse. To them, you will just be a dying old prune with a sense of superiority and entitlement because you once drove fancy cars and lived in fancy houses–something they realize they will never have the privilege of doing.

    Your children will visit you from time to time because they want to be included in your will when you die. And just like you lived your life believing money was more important than anybody or anything, they will follow suit. And your wife, she’ll have left you for someone with half your wealth that sees her as more than an obedient yes woman to build you up and tell you how great you are for your financial genius. And the day she does that, you’ll realize that she’s the real genius of the family because she managed to end up with half of everything you worked for, sacrificed for, dreamed of, and cared about. What’s more, she’ll have remarried to a man that saw her as a human being as opposed to a trophy to show off to friends at business parties. And a few years later, she will lay there and die just as you did, but the difference is, your children will be at her side as will your grandchildren.

    I hope all that money is good to you Ray, because in this world, it’s all you’ve got. Now place your bets about your future, and tell me how good you do.

  90. 90
    mukoh says:

    BTW
    Quadrant is not the biggest builder in our area, if you do not know the rankings I will let you know that SoundBuilt is sitting on 1700+ lots of builder inventory.

  91. 91
    Markor says:

    Ray Pepper: Tell us where you have placed your bets. If you are putting it in a mattress thats OK too! But, the money talks. Predictions with no monetary backing are as useless as me being at the Reno Rib cook off and being a vegetarian.

    I’ll bite. I’m a believer that the stock market is highly efficient (unpredictable) except in the long term. In the long term my bet is way down after inflation, so I stay away. No way will a bailout or any other gov’t measure keep house prices from eventually falling another 20% in the Seattle area after inflation, so I’ll rent until then and longer if they keep falling. I don’t trust 401Ks and haven’t contributed in a decade. Cash will be king for the next two years at least. I’ll stay in short-term CDs and bet that rates will ratchet up to meet or beat inflation. I’ll re-assess as new info comes in.

  92. 92
    mukoh says:

    jonness needs to write more essays for the “green” “friendly” society, looking as how everyone is so selfish around him.

    For C sakes you live in Us of A the inventor of greed and selfishness.

  93. 93
    Matthew says:

    Jon,

    Are you trying to obtuse on purpose? Have you followed any of B-52’s testimony over the past year or so?

    Here’s a recent one : July 16, 2008 WASHINGTON — Federal Reserve Chairman Ben Bernanke told Congress Wednesday that troubled mortgage giants Fannie Mae and Freddie Mac are in “no danger of failing.”

    The two mortgage giants are “adequately capitalized,” Bernanke said. However, “weakness of market confidence is having an effect” on the companies, making it difficult for them to raise capital.

    Hmm…. Sounds like a load of b.s. to me when pretty much everyone in the blogosphere has been saying that Freddie and Fannie were toast and “short to zero” stocks more than a year ago. How could Bernanke, armed with more economic data than any of us honestly believe that F&F were “well capitalized”?

    He knew they were toast. But he was lying. I could fill up an entire blog with he and Paulson’s lies over the past 12 months.

    Paulson from April 20, 2007:

    NEW YORK, April 20 (Reuters) – U.S. Treasury Secretary Henry Paulson said on Friday the housing market correction appears to be at or near its bottom and that troubles in the subprime mortgage market will not likely spread throughout the economy.

    “I don’t see (subprime mortgage market troubles) imposing a serious problem. I think it’s going to be largely contained,” he added.

    Here’s some more b.s. from 2008 from Paulson:

    Our financial institutions entered this period well-capitalized, and we expect them to remain so.

    Our capital markets remain resilient and continue to show progress towards stability. Equity markets are functioning well and finished up for the year, across a broad range of indices. The Treasury market is operating well with elevated volumes at much lower yields than the first half of 2007. Our high grade debt market is performing satisfactorily and issuance has been solid with spreads in line with the last five years’ historical averages. Our high yield market is impaired but operational. High yield issuance volume is down significantly and spreads are wider, but still within levels experienced just four years ago.

    I could go on for hours… LIES LIES LIES

  94. 94
    Ray Pepper says:

    nice hit mukoh. dont trust the mkt…in/out always take profits ALWAYS!

    Markor we already know housing prices will continue to drop. Thats a given. Short term CD’s very conservative. Not a play for me. I hate dead money.

    So its obvious jonness you are empty and have nothing to offer us in the form of rational information. As for all my money and in this world its all you got. Well, let me tell you my friend you only live once. As an RN for many years I know more then you can imagine about about the dying process in fact i still work 1 night a week at a Vent unit. Family forst my friends. I have 3 kids and 1 on the way. As for them wanting MY money….Hell, its all theirs anyway. My wife better not leave me. Shes a nurse as well and does one hell of a digital stimulation which i will know doubt be needing with my persistent bowel problems from blogging to the likes of you.

    You see Jonness, this is my assumption. You have nothing because you BRING nothing. When you decide to GIVE back you will always receive. What comes around always goes around. What I see every Friday night on my Vent unit is true horror. What you and the senseless predictors evoke is nothing but yahoo message board titillation backed by a pointless life with no meaning. Give back my friend. Just give back.

  95. 95
    LUC says:

    http://calculatedrisk.blogspot.com/2008/09/wamu-talks-continuing.html

    Washington Mutual Inc. pushed Sunday to decide its fate, continuing talks with potential buyers amid mounting pressure from federal regulators.

    …some people close to the discussions hope a deal could be struck within days …

    A spokesman from the Office of Thrift Supervision … said “we are aware of the situation and following closely”

  96. 96
    Markor says:

    Ray Pepper: Markor we already know housing prices will continue to drop. Thats a given. Short term CD’s very conservative. Not a play for me. I hate dead money.

    Yep, I’m fiscally conservative. It goes with my frugality.

    It’s not dead money when it’s limiting risk. The performance of a portfolio leveraged 2X is exactly the same as the performance of the same portfolio except leveraged 1X. There are not many people in the world who have consistently beaten a financial market after accounting for risk, and most of those people had the power to move the markets after their trades.

  97. 97
    Ray Pepper says:

    Well you know Markor although I hate dead money , I have been sitting on my 85k shares of EGHT for over a year. Trading range has been fixed at .80-1.20. The epitomy of dead money. I’m loaded to the gills at 1.03 I would have earned far more in a CD yet I still continue to wait and watch the MM’s manipulate the stock in an effort to shake loose the longs. Although it remains a small part of my portfolio I have not been fiscally responsible in/re to that investment. But, I still say its an easy double and when I finally eliminate my position I believe it will have been well worth the wait.

    Being frugal is good and limiting risk is essential. I truly wish the masses have followed your conservative nature. I started with nothing in 1989. For myself RISK was very essential and as I got older my tolerance for risk has greatly been reduced.

  98. 98
    Markor says:

    I wish you well on EGHT, Ray.

    People should be concerned about their 401Ks. With the sweeping new power about to be handed to the Treasury Secretary and $1 trillion given away to banks just one week after the request, even though probably 80+% of voters are against it, shows how precarious 401Ks are. The rich get richer when 401K money stays in the financial markets. I think it’s likely that one day it will be deemed critical for the nation’s future to raise the minimum age for 401K withdrawal to age 70 or so, or else a 25% penalty is applied, and a week later that will be the new rule.

  99. 99
    Eleua says:

    Paulson and Bernanke are either lying or stupid.

    Take your pick. Why would you give them unlimited fiscal power?

  100. 100
    Buceri says:

    So; dollar’s worth goes down and interest rates go up, up (the treasury is printing money as we blog along).

    Banks will make it very hard to get loans and home prices will collapse.

    Simplistic; but did I get it right??

  101. 101
  102. 102
    NotaBull says:

    “Paulson and Bernanke are either lying or stupid.

    Take your pick. Why would you give them unlimited fiscal power?”

    That’s exactly right. They either lied about the situation and how it was all going to be fine (“contained”, etc) or just had no clue that things were not fine. Every time I think about that nut job Cramer and his “they have NO idea!” rant on CNBC, I think about how scarily true it was.

    I’m beginning to think that it might actually be better to replace Bernanke with Cramer. I mean, how could he be worse? We’d be replacing an idiot|liar (pick one) with a nut job. Seems like a fair trade, and the testimony in the senate would certainly be a lot more interesting…

  103. 103
    mark says:

    To All You Apocalypse People:

    The world is always coming to an end in 2-3 years. My 80 YO neighbor says he’s heard that all his life too. Every “crisis” is another reason. This isn’t even a crisis. The stock market is down 25% in a year — just a normal bear market. It’s not great depression II — nobody’s going hungry, no tent cities or riots in the streets.

    Religion makes you gullible to fear tactics. Those tactics are used to con you into everything from consumerism, to supporting wars, to supporting government policies that actually hurt you. You ARE the ignorant masses that folks on bubble blogs are addressing.

  104. 104
    mark says:

    All aboard!!!!!!!!!!! So whose Long WM, WB, NCC, BAC, USB, WFC, ……..up up up!! Who else has been trading this bottom over the last 4 weeks! Giddy up!

    Not you, Ray Pepper @ 50.

    Reptiles like you are always in which ever stock went up the most yesterday. Not fooling anyone.

  105. 105
    mark says:

    Jonness @ 75 is simply brilliant:

    I don’t know about anyone else, but anytime someone in authority over me who holds absolute power informs me they are going to borrow huge amounts of money in my name to give to corporations, and that we must act fast without fully thinking through the alternatives, I call BS. Reagan rocked our country with fear of drugs and launched a plan to spend a trillion dollars to cure a medical disease with law enforcement. People are really gullible. When Iraq came along, I saw the same pattern of scared sheep in need of making a quick decision to borrow another trillion to keep their children safe, and I warned my friends and acquaintances that we were not being told the truth about WMD’s. For my efforts, many people thought of me as an unAmerican alarmist. Today, I see hundreds of millions of scared sheep in need of making a quick decision on spending another trillion dollars to bail out the banks. Nothing ever changes. Sheep will agree to anything if you scare them enough. Hitler proved it, and we continue to pledge our obedience toward his brilliant policies on mindwashing sheep.

  106. 106
    Lake Hills Renter says:

    What happened to the policy of no personal attacks being allowed?

  107. 107
    jonness says:

    ” What you and the senseless predictors evoke is nothing but yahoo message board titillation backed by a pointless life with no meaning. Give back my friend. Just give back.”

    Ray, do you know why people always ban you from their websites? It’s because you can’t have a legitimate conversation with anybody from a human being to human being standpoint. The only thing you “give” is self promotion toward your personal business goals. You are deluded if you think you bring something to the table. You’re not a real investor Ray. You are a mindless gambler without a clue, and your investment advice is self centered and dangerous at best.

    You have some nerve to come on here and attack other people while claiming to be some kind of investment guru who is superior to all the arm chair quarterbacks. Ray, I’ve made more money in a day than you’ve made in a year, so get over yourself and start acting like a human being instead of a discount magnetic sign on the side of a Kia heading to grocery store.

  108. 108
    Jillayne Schlicke says:

    Markor: “People should be concerned about their 401Ks.”

    I received a call today from someone reading RCG and asked if I could help him buy a home. When I explained that I’m not a Realtor he asked if I could help him pull money out of his 401K to invest in real estate.

    He was worried about the stock market going down and said he wants to buy homes and hold them inside his 401K.

    I told him to come and read SB for a while before he does that.

  109. 109

    “I received a call today from someone reading RCG and asked if I could help him buy a home. When I explained that I’m not a Realtor he asked if I could help him pull money out of his 401K to invest in real estate.”

    Was it PT Barnum who said ” There’s a sucker born every minute”?

  110. 110
    Ray Pepper says:

    Jonness I have never been “banned” from any website. RCG deleted my blogs early on for troll-like behavior. In the end they will ALL see it my way. Real estate is changing rather quickly to the benefit of the consumer. Much faster then I ever imagined. Soon nobody will pay 2-3% to list! Its INSANITY! As for my “personal business goals”….You will be happy to know I draw no paycheck from 500 Realty. I committed 10 years to the cause. I have 8 left. My wife and I are very comfortable with our investments and I have the luxury of donating my time to a cause that will benefit the public. You don’t just want Red Fin out there alone do you?

    Investment GURU?? Hell, I own 85k shares of EGHT. I have traded for 20 years. Don’t listen to me for trading advice. My only long position is EGHT. That should tell you right there I’m no Guru. However, it changes daily and I will most likely be having a rather busy day entering long positions tomorrow-Friday.

    You have made more money in a day?? excuse me burrrp. Well, I’m impressed. Lotto winner? Inheritance ! Its one or the other …Tell us how you did it……….

  111. 111
    jonness says:

    “You have made more money in a day?? excuse me burrrp. Well, I’m impressed. Lotto winner? Inheritance ! Its one or the other …Tell us how you did it……….”

    Drugs :) Fortunately, I served some time for it, and the statute as expired on the rest of it. So it’s not like anyone can come after me anymore.

  112. 112
    Ray Pepper says:

    Now thats funny! You earned a 500 Realty T Shirt and Hot Dog! Come and enlighten me at the Home Show. I love the Bubble Heads!

  113. 113
    jonness says:

    I misjudged you Ray. I apologize.

    In other news, quotes by Paulson from July 22, 2008:

    “I think there is a reasonable case to be made that when you look at the housing correction, the largest part of this we can work through in months.”

    “99% of bank assets are in banks that fall into the highest safety category. ”

    “Learn from us, and you can avoid some of the mistakes.”

  114. 114
    Davis says:

    Doom and Gloom in housing has just begun! We haven’t seen the worst yet, so everybody hang on to your cash, our houses will be worth half as much this time next year!
    this will be the greatest depression ever to hit the “new” world economy…

    good luck to all.

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