Paulson: 'The worst is just beginning'

The headline says it all, but I will say more. Treasury Secretary Henry M. Paulson Jr., pictured, committed news in this exchange captured on YouTube, and posted at Calculated Risk (it's the second video):

Reporter: "Sir, is the worst over? Will 2008 have fewer foreclosures ... "
Paulson: "... in terms of sub-prime and the resets, the worst isn't over, the worst is just beginning. We all know that."

While I am at it, Tanta at Calculated Risk was en fuego today with this review of the performance turned in by HUD Secretary Alphonso Jackson: "Alphonso Jackson, whose soporific discourse leads the viewer's mind to abandon the struggle to pick content out of the bromides and focus instead on that oddly expressionless, smooth, unwrinkled, ageless baby face of his. What, you wonder, would it take to make this man look a little troubled? Armageddon?"

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo credit: www.treasury.gov.

Comments

[jb]

Paulson - you are a spineless creep who simply wants to protect the banks. You did nothing on the way up, now stand aside and let the banks take their well deserved punishment. (I will support your proposals to help the FBers and banks when you will support me by also giving me a house I cannot afford)

[NationalBubble.com]

Treasury can keep coming up with different bailout plans but it won't make a difference. Home prices are still too high for most buyers.
You know that the market is crashing when even Paulson admits the worst is yet to come.

http://www.NationalBubble.com

[MyLessThanPrimeBeef]

FDR: The only thing we have to fear is fear itself.

Paulson: The worst isn't over. The worst is just beginning.

[MyLessThanPrimeBeef]

Is it just me, or does that Treasury seal look like a key under a house with a decision being weighed about whether the key should be mailed in or not?

[JohnnyB]

"...the worst is just beginning. We all know that."

Those were the "unspoken" words heard ‘round the world as soon as the Bush clan took office.

What a freakin’ mess they’re leaving behind… unbelievable.

We all know that.

It’s still very refreshing to hear him come out and say it. Based upon all previous straight faced denials and obfuscations, this comment was at least succinct and to the point.

The problem is that he's still minimizing the crisis to "sub prime"... which it's not.

We all know that.

Ultimately, the billionaires club of wall street alumni, of which Paulson is a beholden member, couldn’t give a rat’s ass about how this crisis crushes the middle class and the American home ownership dream.

We all know that.

[Laker]

"Is it just me, or does that Treasury seal look like a key under a house with a decision being weighed about whether the key should be mailed in or not?"

MyLessThanPrimeBeef, awesome observation!
And guess what is the answer??? yes, and ASAP. (unless you upside down owners like to pay high rent...)

[William Jones]

Wait a second! Wasn't it last summer when they were telling us this crisis was "largely contained?" Now they're telling us "The worst is just starting." My head is spinning AND it hurts! What is going on here?

[JohnnyB]

Beef wrote: "Is it just me, or does that Treasury seal look like a key under a house with a decision being weighed about whether the key should be mailed in or not?"

+1

Or a house key under a pyramid scheme symbol that feeds upward to fill the treasury's coffers...

[FromHouseFlipperToBurgerFlipper,]

"......Ultimately, the billionaires club of wall street alumni, ...., couldn’t give a rat’s ass about how this crisis crushes the middle class and the American home ownership dream."

The average middle class do not buy $500k+ homes. These crazy home prices were brought on through speculation and irrational greed. The middle class dream of home ownership will be fine once home valuations drop to a affordable level sustainable by an average middle class wage.

[lefty]

lol, hey guys, isn't it great these 'leaders' always speak after the facts? you can ignore them, because the time to buy fantastic metro L.A. is right now!! don't wait for the 'experts'; the best deals are today!!

[tew]

FYI, ACORN's Western offices contact numbers are at:
http://acornhousing.org/TEXT/offices.php?reg=5

The Hope Now Alliance has a hotline 1-888-995-HOPE.

It seems everyone should at least call them once to see if they can help you. Why not at least call to see if they have a program for you whether you are sure you can get modifications or not? As for would be buyers (renters), I figure it can't hurt to call in case they develop something for you...

[smokey]

I third the motion about the wallstreet billionaires not giving a rat's ass.

There are a handful of people who will rape and pillage
and take take take until there's nothing left.

Greed has become a cancer in this country and there's no turning back.

You can bet whatever "package" is devised to "help" struggling homeowners will just put a few million more in the wallstreeter's pockets.

I just hope I live long enough to see the greedy bastards get their comeuppance!

[tealeaf]

I can't wait for the "intentional foreclosure" crowd to begin lawsuits/resentment/anger for any freeze on foreclosures enacted by the dems once they take power (Obama and Clinton have promised such actions).

"I'm from the government, and I'm here to help."

NOOOO!! Leave me alone so I can prepare my jingle mail!

[Laker]

tealeaf, Don't worry my friend, the way it looks today Billary nor Obama have a chance to win in November. A name that starts with Mc will get the title Mr president.
Besides, what is the BS about freeze on foreclosures, the banks simply need to slow down the process a little. This is great for jingle mail / walk away as they can stay another month rent free. If you fall behind 3 months it means you cannot pay 1 month mortgage. So how will you pay 3 months? Some actually pointed out that if the home is 13 times the household income, and the loan will get refied into 30 year fixed at 6%, that will demand 80% of the household gross income to pay the new mortgage....That is provided they can actually refinance a house that is worth less than the loan amount...

[tom]

I got an idea. lets raise the minimum wage to $50 an hour.

[Anthrodiva]

I gotta ask - is Lefty some kind of performance art bot ala Karen Finley?

http://www.sfgate.com/eguide/profile/arc97/1297
finley-interview.shtml

[Laker]

tom wrote: "raise the minimum wage to $50 an hour."

Tom, I say, let's raise it to $100 an hour, and increase the GSE conforming loan limit to $7,000,000. There we could all afford homes, there will be tons of equity, the economy will boom. In that case even if you lose your job, your equity will provide you money interest free to buy that lexus or hammer. - Lefty.
Argentina's inflation will look nothing like ours...Get real people pleasssssse

[JohnnyB]

Re: Treasury seal looks like...

"a house key under a pyramid scheme symbol that feeds upward to fill the treasury's coffers..."

Timely, short posted article today entitled:
"Understanding the Pyramid Scheme We Call Housing"

link: http://dadtalk.typepad.com/dadtalk/
2008/02/understanding-t.html

[Fourth Generation]

Every single "program" announced so far is directed to one object only. To save the banks/investors/greedy speculators. Not one program is to reduce the burden on the poor bastards that were buying well over their heads. The government stand by while all this was been developed, now they should stand by and let the greedy investors to suffer the consequences of their gamble. Isn't a beauty the way free market is supposed to work? Except that when your friends are in the loosing end then the gov is called upon to save Wall Street.

[MB Watcher]

FWIW I transcribed Paulson's comments for this story on the "lifeline" -

http://tinyurl.com/2y3939

[Ben Schoen]

I've been reading comments on these articles on the Wall Street Journal, and decided I should get a west coast, non Wall Street opinion -- guess what? LA Times blog readers feel the same way, don't help the banks and brokers that no money down, securitized junked their way to this mess. I say they take the losses, not taxpayers, let housing prices settle to real value (and I am a homeowner with a mortgage). All that's being penalized are people that still want to buy a home someday and people who try to save money, and of course don't forget the elderly and disabled screwed by the cut interest rates. SHAMEFUL ADMINISTRATION.

[repo4sale]

2012-2015 will be the bottom of the real estate market!
2020-2025 will be the Feel Good times... 22 years away!

Sorry, I have been through 3 hot and 3 cold markets!

From 2000-2007 I sold 198 properties and averaged 47% gross profit per month, 23.6 months avg. hold, 1165% avg. gross profit per deal.

If you don't have $1m in cash and NO DEBT, your in for a real bad ride till 2012.

All assets in Real Estate must be free and clear for you to keep your position in the top 2.5% of So. Calif. or aka the MillionAireClub. Net worth over $2m with $1m cash. Only 286k in LA County and 116k in Orange County. These #s will drop to 1/2 by 2012. Sorry, but that's the facts per IRS!

[Dave_O]

How could Paulson be right? The senior economist from the Nationial Association of Realtors said that the housing market should be on the up-and-up later this year:

"Sales activity is expected to remain soft through the first half of the year despite a generational low in mortgage interest rates, according to the National Association of Realtors(R)'(NAR) latest market outlook. 'Household formation was only half of what it should have been last year given the demographics of a growing population and sustained job growth, so there clearly is a pent-up demand from buyers who are on the sidelines,' said NAR Chief Economist Lawrence Yun. 'Existing-home sales have moved narrowly since last September, but when the full impact of higher loan limits for conventional mortgages begins to register on the market, there is likely to be a notable rise in home sales and prices.'" (source: http://tinyurl.com/38ujwv)

Who better to know than Lawrence Yun, the head of the leading unbiased organizations who are experts on the housing market's future? Who is Paulson to say that the worst is just beginning?

[Maggie]

The government does not have to draw this out. So far, every plan to "help" borrowers is really targeted at maintaining the solvency of lenders.

The government needs to get out of the way so we can get the mess cleaned up. This is all part of the natural boom/bust economic cycle.

[rudy]

do not overspending...save money ..get out of Iraq...sound money...no income tax..no patriot act...PEACE...FREEDOM AND PROSPERITY...GO RON PAUL 2008 PRESIDENT