Bloomberg: U.S. to Lose $400 Billion on Fannie, Freddie, Wallison Says

[Fergasun]

Larry,

We were nowhere close to economic financial collapse. Do you believe that because it was being peddled by Hank Paulson and his banking buddies? Or the fact that they wrote a bunch of books re-shaping history from a year ago to claim the same BS?! The whole collapse was industry lead to start with! The American people shouldn't care about Lehman CDS... nor should we have paid 100% for the Lehman CDS (or was it AIG?).

Read this, it was AIG.Skip to the end where they talk about the effect of the AIG bailout?

How does replacing private money and private risk with government money and government risk help stave off economic collapse? The government didn't even come close to spending all of the money they asked for and were authorized.

If we were so close to financial collapse, than why hasn't the regulatory structure changed, in fact the banksters have influenced and effectively neutered the financial reform regulation that is in the pipeline? I don't get why we didn't just nationalize *a* bank with the TARP money; which would've cost less.

[Thiebear]

I repeat: One year ago, we were days or weeks away from the total collapse of the world's economy.

Now we're complaining because we don't have 24 hour sunshine. (Well, one political party is.)

And you want to claim that "2010 will be worse"? Worse than what? Worse than a year ago?

I remember QUITE a few people saying the opposite. We were saying its not a world ending crisis and we don't have to vote on every damn thing the very next day.

And somehow other countries in the world refused to spend their way out and got out earlier than we did... the last 3 countries to come out paid their way.

[Larry]

I remember QUITE a few people saying the opposite. We were saying its not a world ending crisis and we don't have to vote on every damn thing the very next day.

And I remember people in Tailgate posting that over 20% of the houses in their neighborhood were in foreclosure. And another 20% of them were under water, but still making payments.

I remember Tailgate posters (the vast majority of them, in fact) announcing that it was perfectly moral for a borrower to make the bank eat the loss if their mortgage was under water, because after all, it was the bank's fault for loaning them that money, and why should I take the hit when my investment went down in value, when I can make somebody else take the loss, and all they can do to me is ding my credit for a few years?

I understand the effects of positive feedback. That when a lot of houses get dumped on the market at depressed prices, it tends to cause the values of all of the other houses to go down, which tends to cause more dumping. And the feedback was happening.

----------

And I remember, a year ago, virtually everybody agreeing that a catastrophe was imminent. Yeah, people were complaining that we didn't need to give the Executive a completely blank check. And that maybe it would be better if we thought about it for a couple of days instead of doing it in the next hour.

Until, that is, Bush left office, and therefore, a collapse probably wouldn't be blamed on him. Then, suddenly, "everybody knew" that if 70% of the population of America had gone bankrupt, along with every bank that wrote mortgages, and every investor who had invested in them, that would have been better.

Because after all, the Republican Party has clearly stated that the fact that our economy is shaky right now isn't because of the massive coronary which the patient had a year ago. It's because the paramedics did CPR.

[twa]

A number of us railed against the stimulus and bailout under W,,as well as the free spending,but don't let that stop your revisionist history.

[Fergasun]

Larry,

That situation is happening now.

Oh wait, that linked article isn't about underwater homeowners. It's about Morgan Stanley walking away from 5 buildings they purchased which at one time were worth on the measure of multiple millions. And wasn't Morgan Stanley a company that got bailout money? So it's not immoral for them to walk away? Did you finger-wag over them?

It's perfectly fine to walk away from a mortgage. Companies do it all the time. Do people walk scott free? No. Smart ones figure out how to pay cash for a smaller place or figure out how to stop paying mortage prior to walking so they have a large cash sum they can throw in front of a landlord. "I'm willing to pay 1 year in advance, cash" might help overcome the stigma of a poor credit report.

[Fergasun]

... it's not immoral to attempt to keep the "ponzi scheme" we call housing afloat? To the tune of $Trillions. When the efforts are going to be futile anyway.

Just because a bunch of people put a lot of their future and hope into housing.

[Vicious]

I think most Americans have no idea what our government is doing....and that's what the government wants.

Iraq.

[SkinsHokieFan]

... it's not immoral to attempt to keep the "ponzi scheme" we call housing afloat? To the tune of $Trillions. When the efforts are going to be futile anyway.

Just because a bunch of people put a lot of their future and hope into housing.

Agree. Its actually downright "depressing"

2012 inflation is going to slap this country in the face.

[Hubbs]

And I remember, a year ago, virtually everybody agreeing that a catastrophe was imminent. Yeah, people were complaining that we didn't need to give the Executive a completely blank check. And that maybe it would be better if we thought about it for a couple of days instead of doing it in the next hour.

Until, that is, Bush left office, and therefore, a collapse probably wouldn't be blamed on him. Then, suddenly, "everybody knew" that if 70% of the population of America had gone bankrupt, along with every bank that wrote mortgages, and every investor who had invested in them, that would have been better.

Because after all, the Republican Party has clearly stated that the fact that our economy is shaky right now isn't because of the massive coronary which the patient had a year ago. It's because the paramedics did CPR.

Funny, I remember a completely different motivation for thinking some of the things you wrote, and I also remember thinking at the time that Bush was one of the worst presidents in this country's history. In fact, I'm pretty sure that I still think all of that.

Of course, I'm still wondering about that borrowing, too, but I feel confident that I can do everything I just mentioned at the same time.

[Thiebear]

400billion was not enough to get these two companies back in shape?

and will have an unlimited amount over the next 3 years? next 3 years, why so long, we were fixed last June?

And they were at the same time trying to get the debt from F&F to bad banks so they could go under with it leaving F&F free to rinse/repeat past mistakes...

[81artmonk]

untrue

A year ago, we were weeks, maybe days away from the total collapse of the world's economy.

Now we aren't.

Looks like "Mission Accomplished", to me.

See my above response.

The bailouts were successful in accomplishing their mission: They stopped the stampede/avalanche.

it's a proven fact that Obama has raised the deficit quicker and more than Bush had. So I'm not even going to argue that FACT with you. NEXT!!!

What disaster? You mean the manfactured one that OBAMA told us about in order to get us behind his totally useless plan to spend our way out. Which I might add hasn't worked. Where's the jobs? Where is the comeback? Far as I can see, aint'y nothin changed.

Than again, maybe you could be using sarcasm and I missed it.

[Fergasun]

thiebear,

They've only spend ~ $100B I think so far of the $400B they are allowed... so I'm not even sure they will come close.

Because uncapping them simply puts them up against he debt ceiling (currently that's maybe $200B more?). And I'm sure Congress might say something about the uncapped limit.

[81artmonk]

Totally untrue. Bush spent over five TRILLION dollars during his term. Here are several examples of this:

1. Over a trillion spent during the campaigns in Afghanistan and Iraq.

2. $1.2 trillion Bush tax "cut."

3. Over a trillion for the Medicare drug benefit bill.

Why do you think the national debt doubled during Bush's terms in office? It is 100% totally false that " Obama has out spent bush in a matter of months." This is a totally dishonest right-wing meme that I have seen repeated time and time again.

In comparison, the largest expenditure so far, during Obama's term, has been the spending stimulus, which was between $850 to $900 billion. And the health care bill is estimated at $800 to $900 billion over ten years. I would challenge anyone to demonstrate how Obama has "outspent Bush" thus far.

http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/

President Barack Obama has repeatedly claimed that his budget would cut the deficit by half by the end of his term. But as Heritage analyst Brian Riedl has pointed out, given that Obama has already helped quadruple the deficit with his stimulus package, pledging to halve it by 2013 is hardly ambitious. The Washington Post has a great graphic which helps put President Obama’s budget deficits in context of President Bush’s.

[81artmonk]

Bottom line is, Bush isn't president, Obama is. So the past is the past. I'm not sure why the left or those who support Obama and his policies rail against the Bush spending, yet think it's alright for the Obama admin to do it and at a greater level?

If it was wrong for Bush than it's most definitely wrong for Obama.

[Hubbs]

Quick, somebody tell 81 that fiscal year 2009 actually includes virtually all of the bailout spending Bush did at the end of calendar year 2008.

Somebody! ASAP!

[twa]

Quick, somebody tell 81 that fiscal year 2009 actually includes virtually all of the bailout spending Bush did at the end of calendar year 2008.

Somebody! ASAP!

Certainly, so subtract what?...350 billion?

By my count his point still stands

There always exist both reasons and excuses for excess

[Larry]

Larry,

That situation is happening now.

Oh wait, that linked article isn't about underwater homeowners. It's about Morgan Stanley walking away from 5 buildings they purchased which at one time were worth on the measure of multiple millions. And wasn't Morgan Stanley a company that got bailout money? So it's not immoral for them to walk away? Did you finger-wag over them?

It's perfectly fine to walk away from a mortgage. Companies do it all the time. Do people walk scott free? No. Smart ones figure out how to pay cash for a smaller place or figure out how to stop paying mortage prior to walking so they have a large cash sum they can throw in front of a landlord. "I'm willing to pay 1 year in advance, cash" might help overcome the stigma of a poor credit report.

Thank you for proving my point: That the fact of a lot of foreclosures (or otherwise walking away from a mortgage) can depress property values, which can lead to lots more defaults. This is called positive feedback.

(Your attempt to claim that I somehow think that companies defaulting on loans is somehow moral? Well, that was pathetic.)

(However, your point that "bankruptcy isn't so bad if you plan for it in advance. Especially if you intentionally stick somebody else with your debt, while hiding money someplace else, so that you can default on a loan while sitting on a lot of cash", while irrelevant to a discussion of what the consequences of a collapse of the lending business would have been, was an interesting revelation of character.)

[Larry]

Of course, I'm still wondering about that borrowing, too, but I feel confident that I can do everything I just mentioned at the same time.

Frankly, if you have that much difficulty understanding that having a massive, nation-wide, simultaneous default of the vast majority of the real estate loans from the entire country would have had a negative effect on the availability of all borrowing, then your confusion doesn't surprise me.

[Larry]

it's a proven fact that Obama has raised the deficit quicker and more than Bush had. So I'm not even going to argue that FACT with you. NEXT!!!

Gee, if that's what you'd said, you sure would have won that argument.

Unfortunately, what you said was:

Obama has out spent bush in a matter of months

And that is flat-out untrue. Just like I said.

What disaster? You mean the manfactured one that OBAMA told us about in order to get us behind his totally useless plan to spend our way out.

Actually, that claim came from Bush. See, it happened before Obama took office. Before he was even elected, in fact. In fact, McCain even claimed that it was an imminent crisis, too.

(Although, granted, McCain was using the crisis in an attempt to prevent Palin from having to participate in a debate. So, just because he said it was an imminent crisis, doesn't necessarily mean that he believed it.)

Which I might add hasn't worked.

Has there been an utter collapse of the entire US banking system? You know, the collapse that every major spokesman from both Parties were telling us we were on the brink of?

Cause that's what it was designed to prevent.

Where's the jobs?

Same place they've been for the last ten years. India and China.

Funny, I don't remember you complaining about the fact that, excluding our artificially debt-inflated housing bubble, GDP hasn't grown for the last decade.

But let a Democrat take over, on the verge of the complete collapse of the economy, let him avert the disaster, and boy, you'll be right there announcing that he's a failure because in six months he can't avert the disaster and instantly stimulate growth in an economy that hasn't had growth in a decade.

[Larry]

Bottom line is, Bush isn't president, Obama is. So the past is the past.

Funny. I seem to remember that at roughly this point of Bush's Presidency, you were one of those people who were loudly announcing that both 9/11 and the recession weren't Bush's fault, because he hadn't been in office long enough, and it wasn't fair to blame him for things that his predecessor caused.

I'm not sure why the left or those who support Obama and his policies rail against the Bush spending, yet think it's alright for the Obama admin to do it and at a greater level?

1) I haven't really seen a lot of "the left" "railing" against Bush's spending. I'm sure that there was some. And I'm certain that there was some railing against his deficit spending. (Although nowhere near the amount of railing that we started seeing the day Obama took office.)

But the folks I remember complaining about Bush were complaining about what he was doing, not the price tag. (For example: Show me somebody who's complaining about how much we're spending in Iraq, and I'll show you somebody who thinks we shouldn't be in Iraq, who's simply using the dollars to support his agenda.)

2) Perhaps because a large part of Bush's deficits were due to voluntary actions, the first of which was simply a special-interest payout, whereas a large part (although, certainly not all) of Obama's spending has been spending that was necessary to Save the Nation From Disaster?

(Although, granted, that doesn't seem to be stopping him from going ahead with his other, voluntary, spending, either. It just hasn't happened, yet.)

For example, I haven't seen anybody complain about whatever got spent on trying to save New Orleans. (I've only seen complaints of it not being enough.)

[Hubbs]

Certainly, so subtract what?...350 billion?

By my count his point still stands

There always exist both reasons and excuses for excess

His point in falsely representing that graph as at all accurate? Bush's actual last deficit was over a trillion. (Actually, I shouldn't use "actual" like that, because the accounting wizards in DC somehow manage to peddle the notion that their math should be different than everybody else's math, and therefore pesky things like Medicare and Social Security shouldn't really count. But I digress.)

Yes, Obama's deficit is bigger. Yes, his administration's future budget projections are laughable. But nobody needs to bend reality to make that point.

Frankly, if you have that much difficulty understanding that having a massive, nation-wide, simultaneous default of the vast majority of the real estate loans from the entire country would have had a negative effect on the availability of all borrowing, then your confusion doesn't surprise me.

Hmmm. I suppose now would be a good time to point out that my question throughout this entire thread was, "Exactly what borrowing are you referring to?" Which, oddly enough, is still my question. The question you answered, had somebody actually asked it, was something along the lines of, "Larry, old bean, why the devil would a popping real estate bubble cause banks to cut back on their lending? It doesn't make a tit's worth of sense to me." (Don't ask me why I'm imagining a Brit asking this question.)

I get the feeling that you knew all of that, though. After all, unless your account is actually manned by several people, I find it hard to believe that you would think I'm asking what I'm asking because I'm unaware of how banks work, given your tendency to jump into these sort of threads. Still, I feel like once again wondering... exactly what borrowing were you referring to?

[Larry]

Hmmm. I suppose now would be a good time to point out that my question throughout this entire thread was, "Exactly what borrowing are you referring to?" Which, oddly enough, is still my question. The question you answered, had somebody actually asked it, was something along the lines of, "Larry, old bean, why the devil would a popping real estate bubble cause banks to cut back on their lending? It doesn't make a tit's worth of sense to me." (Don't ask me why I'm imagining a Brit asking this question.)

I get the feeling that you knew all of that, though. After all, unless your account is actually manned by several people, I find it hard to believe that you would think I'm asking what I'm asking because I'm unaware of how banks work, given your tendency to jump into these sort of threads. Still, I feel like once again wondering... exactly what borrowing were you referring to?

And again,

Somehow, my suspicion (and I'll admit, it's just an opinion) is that had we allowed the complete collapse of all of the nation's debt that had been secured by real estate, (and forced the lending institutions to come up with the lost money out of their own pockets), that this would have had a profoundly negative effect on the availability of all borrowing.

[twa]

And again,

Somehow, my suspicion (and I'll admit, it's just an opinion) is that had we allowed the complete collapse of all of the nation's debt that had been secured by real estate, (and forced the lending institutions to come up with the lost money out of their own pockets), that this would have had a profoundly negative effect on the availability of all borrowing.

Was that a realistic scenario?

Most of the housing market was not overinflated much,nor mortgage owners underwater.

How does keeping prices inflated and people in homes they can't afford progress?

I can promise ya there would be buyers for houses at real values,and the Fed could loan the cash for true value.

[Baculus]

http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/

A totally manufactured point.

By the time Obama took office, the deficit was at $1.2 trillion dollars. According to your posted article, it said, " . . . given that Obama has already helped quadruple the deficit with his stimulus package, pledging to halve it by 2013 is hardly ambitious."

An untrue point: Obama's deficit is NOT over three trillion, which would be the figure if Obama had tripled the $1.2 trillion dollar debt he inherited. If the Obama administration had actually TRIPLED the deficit, that would be the figure at hand.

It isn't.

Basically, you, and this article, is attributing the bank bailout to the Obama administration, which is incorrect. That happened during Bush's last term in office, not Obama's.

[Larry]

Most of the housing market was not overinflated much,nor mortgage owners underwater.

How does keeping prices inflated and people in homes they can't afford progress?

I can promise ya there would be buyers for houses at real values,and the Fed could loan the cash for true value.

1) You just claimed that in your opinion, most of the housing market was already at true value, and wouldn't have fallen.

2) And you can promise me that there would be buyers, after virtually every mortgage lender has gone bankrupt?