The Transatlantic mortgage bailout trial balloon

This one from the Financial Times is brief but you guys are smart, you'll get the idea: "Central banks on both sides of the Atlantic are actively engaged in discussions about the feasibility of mass purchases of mortgage-backed securities as a possible solution to the credit crisis."

More: "Such a move would involve the use of public funds to shore up the market in a key financial instrument and restore confidence by ending the current vicious circle of forced sales, falling prices and weakening balance sheets."

Start your weekend on the good foot by writing a caption for the above photo. My entry: "You're doing a heckuva job, Bennie."

Photo Credit: AP photo of, from left, Treasury Secretary Henry M. Paulson Jr., President Bush and Fed Chairman Ben S. Bernanke.

Comments

[Truth2Pwr]

caption: "Aw shucks, I know this country needs my strong leadership and principled ideals now more than ever, but don't worry, Jesus told me that he loves America the best. Just remember guys, no matter what anybody says...stay the course"

[Raul]

They do not look worried, that means everything is OK. We just need to pay for all the smart guys , that made it like Bandids, during the Buble years,and we need to save our Banks and financial institutions from going down, the goverment will take care of everyone. But remember, the difference between us and the comunists is we the People of this beutifull land do not take profits, we just take the loses, and you can see that everything is OK, the Financials are doing good now that they know we will pay the Bill, and after we pay it, the whole RE market will go down.....

[liz]

"This is fun! I've made lots of money, bailed out my friends, destroyed this country, bought some new real estate called Iraq that the American people are paying for, yeah let's do this again, weeeee!"

First it was 9/11 now it's the banking industry(keeping an eye on our money, messing with our shelter, food(inflation)--a great way to control us. Big brother is definitely watching you now!

I find it very hard to believe that Greenspan didn't know this was coming and yet he kept lowering interest rates with the Bush family laughing all the way to Saudi Arabia. Either Greenspan is/was an idiot or he knew, it's one or the other.

This is all disgusting!

By the way if the feds bail out the banks and the banks still own the properties then can't they put it back on the market and actually make a profit??

[shireen]

"And poor Bennie had to work all weekend! And Paulie too, the old baldie. Can't remember the last time anyway here had to work on the weekend! unless it was cutting cedar on the ranch."

[Jonah1979]

Bush: It's not really a bailout...

::Everyone laughs::

[Chris]

sickening

[150 multiple choice questions]

They will never be able to buy enough of the troubled debt and it won't do ANYTHING to restore the market because no one will lend money that way for 15 years when everyone forgets and the "new paradigm" is new again. The idea that these people who are in charge think this will help is the scariest thing. They've tried 50 different things and nothing has worked. I think many people are starting to notice.

Seriously how many times can "banks" go to the fed, borrow money, buy equities with it (so the market goes up 400)? The fun news for those who watch is 28 days later when the fed asks for it's money back and they don't have it.

[LeavinLA]

Damnit, Pete.. you took the best one!

[Tombstone Realty]

What's "double-driving" me crazy about this.....

I paid off my debt, and haven't used my credit cards the last couple of months, BECAUSE WE ARE IN A RECESSION, and I don't want to spend more than I think I'll have...

So what do these glorious banks do? They tank my credit score 50 points to just below 700.

They think I *might be* a credit risk, yet I have to bail these buffoons out with my tax dollars, because they ARE a credit risk.

Oh just drives me up the wall. I just get screwed at every turn in this economy. I may just move to cash only forever, damn the credit score. I'm taking my financial ball, and going home.

[Milt Kaplan]

OK! Who's got the cards?

[Uncle Billy]

1) Bush: "Heh, heh. See, government assistance is like Ro-gaine. It's real expensive. Everybody really wants it to work. We spread it around like crazy and then do some in-tan-cashee-ens." Hey propellor-head, do one of them in-tan-cashee-en dances for us."

2) "Heh, heh. Let's just blame it on Ben. He's got tenure anyway."

3) "Hey Ben... what's the difference between the federal reserve and a constipated owl? The fed shoots, shoots, shoots, but never hits."

[Michael Snyder]

(Daily Planet) Curly, Moe & Larry celebrate the easing of tensions at the Boca Dunes 19th Hole. After approving the largest corporate welfare grant in American history, the financial brain trust is seeking to propagate their ground breaking policies abroad. Millionaires and corporate moguls will sleep better tonight knowing their fortunes are secured by the hard work of the American taxpayer. A food fight erupted shortly after this photo opp.

[Michael Snyder]

My sincerest apologizes to the "Three Stooges" for my previous post. I intend no disrespect for the great comedians who filled those rolls.

[JGW]

As it becomes apparent that the federal government will be doing something more substantial to interfere in the natural unwinding of the credit expansion of the last 5 years, I would like to try to point out again the lost group amongst the many stakeholders in the economy: home buyers. Specifically, first-time home buyers.

Across California, the price of entry for a first-time home buyer rocketed from about 30% of average income back in 2002 to over 60% at the peak of the market in 2006. Put simply, first-time buyers found themselves completely priced out of the market unless they used one of the newfangled negative amortization loans, or flat out lied about their income with a friendly wink-wink from their realtor, mortgage broker and lender. We're seeing how well that worked out.

And things will not get back to normal-- if we call pretty much every year before 2003 normal-- before first-timers can buy again. When will they buy? When they can afford it. When can they afford it? When it costs roughly the same to buy, figuring in your mortgage interest and property tax deductions, as it does to rent. Across Los Angeles, buying-- even at 2008 prices that are 10-15% off the peak-- is still about 30-40% more expensive than renting.

So I, like many would-be first-timers, will be renting for the near future. Asking me to buy at these asking prices-- which is what sellers need me and people like me to do, because there are no sellers without buyers-- is asking me to make the financially bizarre decision to spend half again on my housing expense as I do now for comparable space. I will not do that because it's plain dumb. I suspect that very few people a few years back would have either... had they not unreasonably expected the wild riches of annual appreciation on their home.

So please, mortgagors of America, cry me a river. You knew exactly what you were getting into. If you didn't want to commit to a mortgage for 30 years, you should have rented. You took a risk, and just because it ended up being an unwise risk shouldn't mean that you should expect someone us first-timers to be the greater fool. The Fed and the big banks can talk bailout all they want-- I'm still not going to buy.

[Tombstone Realty]

Ah...forgot a caption.

Paulson: "So then I told him...oh YEAH, well you can stick your second order derivatives up your ASS!"

Bush: "Heheheheeh yeah, you shove them resecondorderhemureitves"

Bernanke (thinks) "Whatever. He just doesn't realise that second order derivatives are a solid financial vehicle"

[buz]

I would hope that these "central banks" will use this situation to the taxpayors ultimate advantage. I have given up hoping against a taxpayor funded bailout of these greedbags but why not structure the aid in such a way that really, really takes a pound of flesh from the Wall Street "geniuses" down the road. Once they get back on their feet. You know this is exactly what they would do if the shoe were on the other foot. Screw them over mercilessly.

[Joe Shmoe]

Caption:

Paulson: Mr. President, that was great advice to get my 401K out of Countrywide last year.

Bush: That ain't nothing, Hank. Now listen here, remember to start selling your Halliburton in September, butnot a word of this to Uncle Dick!

Bernake: I can't believe I'm going to have to stick around when these clowns are gone and deal with their shit.

[Hula Girl]

Fade in:

LAUGHING ALL THE WAY TO THE BANK..

Fade out:

[Krugman's Geek]

This one trumps all, and it was written by a guy who probably doesn't even read the blog:

"Partying like it's 1929"

http://tinyurl.com/34k893
(Executive Summary: don't blame Ben, or Hank, Canada, France, or even stab-happy leaping stingrays -- blame rich people who buy deregulation)

[BottomFisher]

GWB: I neva knew we had a so many a billions Ben....could ya lend me a few too...hahahahahah
buddy could ya spare me a dime...hahahahaha...gosh I'm gona be late for my
stand up comedy gig tonight at the mothers against dumb bailouts....hahahaha........CRASH....what was that Ben?

[Uncle Billy]

In honor of the level to which we've sunk:

Bush: "Boys, heh-heh, better get used to it -- we're gunna be eatin' beans for the next 10 years.

[MyLessThanPrimeBeef]

Inhofe, the greatest pyramid builder of all time, with his Pharoah and the the high priest of Thebes.

[Theorist]

Krugman says it plainly: we did not learn from past mistakes. We wouldn't be in this mess if we had stayed vigilant and regulation-loving. We have proven, on two separate occasions that free markets don't work -- that they are just giant shears with which to fleece all but a few of us pigeons (my take).

More on the "who's watching the watchers" theme --
How come we haven't had any major pinger fointing at Christopher Cox, Chairman of the SEC? We lampoon poor Ben Bernanke, who picks up after his dog, but I've missed any serious discussion about the role Cox has played. Now we're thinking, we'd better let the fed regulate financial institutions... but only because SEC has failed us miserably.

Cox? What was he up to fresh out of law/biz school? Before he got the political bug? Try... heavily involved in defending the big bad guy in the fraudulent mortgage securities fun that led to Orange County bankruptcy.

How bout: "The lawyer who argued that it would be a waste of money to require appraisals is about to be inundated with appeals to reduce the cost of regulation. That lawyer was Christopher Cox, who is likely to be confirmed today as chairman of the Securities and Exchange Commission.

Mr. Cox did not know he was representing a crook at the time he wrote the letter. It was years later that William Edward Cooper, whose investment firm Mr. Cox was representing, pleaded guilty and was sentenced to 10 years in prison."

And now, the smart guy that represented the con-man that brought down a county government for the first time in our history -- is -- overseeing the people that are supposed to regulate. Good grief. There were warnings back in 2005 about Cox:

http://tinyurl.com/24jxyl

Mark Baldassare's book, When Government Fails, which chronicles the OC B/K, begins with a quote from then County Treasurer Bob Citron: "We have perfected the reverse rep procedure to new levels... The downside risk is very minimal." We should all read this book.

Government using reverse repos excessively? Wait-a-sec... aren't repos and reverse repos growing to huge proportions at the fed-eral level now? Well we don't really know. Reporting on the levels of this activity is either completely hidden as of March 2006, or very difficult to piece together. Someone, please try. Try to give an accurate estimate of this sickly leverage is buried in our money supply currently.

The value of the "repos" was contained in the M3 reports which were discontinued (a month after Bernanke's appointment?). The Fed still has a little statement on their website that says it was costly and meaningless to report this data. I have heard this parroted by other economists as well.

Forget Mozilo. Small potatoes. Forget Bernanke. Huggable dancing monkey. Forget Paulson. Just following orders. Ladies and Gentlemen, meet your new best friend, Chairman of the SEC, the honorable Chris Cox.

[puckhead]

I posted last week after the Bear takeunder that I thought that the end game would be the FED/gov't to start buying back mortgage back securities to create a market for the securities so that the commerical banks, I banks hedge funds etc., could clear them off their books. I never thought that we could rope foreign gov'ts into this scheme. Like it or not blogers, this is a stinky situation and it's the only way to clean up the waste. If Ben and Dudya can rope some foreign countries to pitch in, more power to them. I don't know about the RE market, but this action has put a bottom on the stock market and I'm putting money to work.

[Laker]

"Look at all these knife catchers buying houses in California just because they are 20% down from peak.....
ahahhahah LOL"

[Steve]

I can't wait to see this group of morons leave in November and I am a Republican.

[Robbie Fields]

GWB :

"Benny Boy, I hear you know how to handle a helicopter real good. "

[Trudy Self]

"What, us worry? We are a great country. Pauly worked ALL last weekend. We are on top of it."

[seattlesnoop]

"Get your hand out of my pocket Bennie, I left my wallet back at the ranch."

[MyLessThanPrimeBeef]

Ben Bernanke, George Bush and Henry Paulson - Ben, George and Henry or BGH, or it could also mean Bovine Growth Hormone, and there they are, working on their Mad Cow economic policy that's got little holes all over it.

[Responsible Lender]

There is a new service that is intended to prevent this mortgage fiasco again.

As you know, when purchasing a home most buyers know that a home inspection is a no-brainer. The Mortgage Accountability Association has offered a HOME LOAN INSPECTION before signing on the dotted line.

More people should know about this new service that intends to clean up the industry.

[sheila]

"Mission Accomplished"

or

"Dubya enjoys a moment of singalong levity with his Base. To his left, are the 'haves.' To his right are the 'have mores.' Karl Rove, out of shot, is dressed in a 'middle class' costume and sings the verses of Slade's 'run run away while the Base shouts the chorus back at him."

[Jason Hoppe]

!$%^Q#&*^@$*%#&$#)!)#&*&!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Robbie Fields]

Chairman Bernanke :

With all due respect Mr President, my name is Benjamin.

Don't be calling me Bugsy!

[xtine]

PAULSON: I just made soooo much money for my friends--if you all could only understand how...

BUSH: Wait?! This isn't my interview for the Baseball Commissioner's job? Silly me!

BERNAKE: I think I just crapped my pants.

[tom]

Google Yale University's "Skull and Bones" secret society and you'll find Bush was a member. He has appointed six members of this organization to his administration. I wonder what they have planned for this country.

[Anonymous]

Paulson: "Hey, I'm going on a nice tropical vacation to get away next year. What about you George?"
Bush: "I'm going to hang out at the ranch, ride a little, relax."
Paulson: "What about you Bennie? Oh wait, you still gotta deal with all this stuff"
Bush & Paulson "Ha ha ha ha!"

[Mcchiccain]

Henry Paulson put 95% of his couple hundred million dollars in Reits in Canada.