38 Comments - wordslinger - Friday, Oct 3, 08 @ 1:15 pm: This sets a good precedent for me. I also am too big to fail — 200 pounds. - Vote Quimby! - Friday, Oct 3, 08 @ 1:22 pm: An amazing point in American economic history, and not in a positive way. As empires go, I think we have solid evidence we have officially “jumped the shark.” This puts us over $10 Trillion in debt with the added burden of losing a lot of our high-paying paper-shuffling jobs. On the positive side, I am glad to see my two closest reps (Shimkus & Costello) didn’t bite even with the ’sweeteners’ the Senate added. I’m clocking out early and heading to the military surplus store. It’s going to be a long, cold winter… - Anon - Friday, Oct 3, 08 @ 1:27 pm: Thanks for the break down I am going to need it Nov. 4 - Vote Quimby! - Friday, Oct 3, 08 @ 1:48 pm: On top of everything else going on, can we get an update on the con-con proceedings before first pitch? - Rich Miller - Friday, Oct 3, 08 @ 1:49 pm: Waiting on call-backs. - Scooby - Friday, Oct 3, 08 @ 1:49 pm: If Bobby Rush was persuaded to change his vote by Barack Obama that is certainly an interesting post-script in Illinois political history. - Fan of the Game - Friday, Oct 3, 08 @ 2:14 pm: In US history, “crisis” means just one thing–larger, more intrusive government. - Vote Quimby! - Friday, Oct 3, 08 @ 2:16 pm: Fan–you’re right. From the Patriot Act to whatever this thing gets to be called, amazing how we think government can solve our biggest problems when it has trouble with smaller ones… - Excessively rabid - Friday, Oct 3, 08 @ 2:19 pm: I don’t know whether it’s worse to have this thing or not. Either is bad. I don’t like the people on the no list more than I don’t like the people on the yes list, so without actually studying the thing, I’ll give it the benefit of the doubt - no shortage of that, is there? - on that basis. - Sal Says: - Friday, Oct 3, 08 @ 2:21 pm: To the ones that voted no and quoting from Gov Goofy: “What WERE they thinking?” This may or may not work; but what was the alternative? This is about America’s financial survival, not just Wall Steeet. - Six Degrees of Separation - Friday, Oct 3, 08 @ 2:25 pm: Excessively Rabid - I take it your favorite position was Weller’s on the original vote, where he didn’t show up:-) - Dan S. a Voter and Cubs Fan - Friday, Oct 3, 08 @ 2:27 pm: This morning the Dow was up 166 and now it’s down 2.87. What’s up with that??? I thought thgis bailout was the “save all”??? - fed up - Friday, Oct 3, 08 @ 2:29 pm: To the ones that voted no and quoting from Gov Goofy: “What WERE they thinking?” This may or may not work; but what was the alternative? This is about America’s financial survival, not just Wall Steeet. Yeah because if this didnt pass we would be going back to the barter system on Monday. This is a bailout for the rich. Guess what alot of these banks deserve to and need to fail. 10 trillion in debt think about that for a minute. - Six Degrees of Separation - Friday, Oct 3, 08 @ 2:36 pm: Dan S. - unfortunately, the Dow’s attention span is similar to the American public’s - Bill - Friday, Oct 3, 08 @ 2:36 pm: I expect the Dow to rally sharply in a few minutes. As a patriotic duty I just unloaded some stock. - Dan S. a Voter and Cubs Fan - Friday, Oct 3, 08 @ 2:45 pm: Bill, you are correct. The Dow is now up 28. Two months ago I had a 401k, now it’s a 200 1/2K - Bill - Friday, Oct 3, 08 @ 2:50 pm: It works every time. - Dan S. a Voter and Cubs Fan - Friday, Oct 3, 08 @ 2:54 pm: So much for the rally, Dow is now down 35. - Pot calling kettle - Friday, Oct 3, 08 @ 3:00 pm: ==This may or may not work; but what was the alternative?== There could have been an alternative IF the CongressCritters unhappy with the Bush proposal had taken the last two weeks to come up with one. (Really, this has been coming for awhile, so they had more time than that. And, it’s not like nobody knew the Bushies would make another power grab.) Where was the plan to push the folks who created the mortgage-backed securities to open them up, examine the loans, and hold/renegotiate/foreclose as appropriate. If, as everyone seems to be saying, the problem is that no one knows what these things are worth, why wouldn’t step one be to find out? Give the authority for that task to Poulson… - Vote Quimby! - Friday, Oct 3, 08 @ 3:14 pm: Amazing how fast Bush got his ink pen on the bill…was the ink even dry? - Anonymous - Friday, Oct 3, 08 @ 3:18 pm: “force mortgage modifications to prevent foreclosures” So I now get to pay my mortgage and those who shouldn’t have borrowed in the first place. My tax dollars at work. - Snidely Whiplash - Friday, Oct 3, 08 @ 3:28 pm: === Congressman Jesse L. Jackson Jr. said today he will support an emergency rescue package for the nation’s troubled financial system after getting assurances from Senator Barack Obama that, as president, they “would aggressively regulate predatory lending and force mortgage modifications to prevent foreclosures.” === I agree with anon318. These people took on mortgages they KNEW they couldn’t afford. I knew what I could afford, lived within my means in a home my family outgrew long ago, and now I’m supposed to pay for someone who makes $40k per year but decided to buy a $300k house??? Not to mention the fraud aspect pertaining to those “no doc” loans. You can’t tell me that even a substantial minority of the people facing foreclosure reported their actual incomes, assets and obligations on those applications. If they were, those mortgages would NEVER have been approved. Where are the investigations and prosecutions? If the government wants to readjust userous, adjustable mortgage rates to keep people in their homes, I wouldn’t lodge too much of an objection. But, when they start messing with principal, that’s where I have a problem. Why should someone making far less than I do who irresponsibly bought a $300k home now get to keep it for the same price I paid for my modest home years ago? Better yet, why should I have to pay for it??? - TimB - Friday, Oct 3, 08 @ 3:30 pm: ==This may or may not work; but what was the alternative?== I agree PCK, no time was spent trying to find alternatives. No mention of the gov’t programs in the ’90’s that encouraged these loans. Just rip up on the “predatory” lenders that were trying to do what the regulators were telling them to do. And then, pile on the pork to buy votes for it. Anon 3:18 p.m. — How about we just quit paying our mortgages and see if someone bails us out??? What a stinking mess!! Proud to say that my rep, Shimkus voted against it, twice!!!! TimB - ConservativeVeteran - Friday, Oct 3, 08 @ 3:44 pm: That vote is more proof that Rep. Kirk supports huge spending increases. He should run as a Democrat. - Downstater - Friday, Oct 3, 08 @ 3:46 pm: To quote the late great Ronald Reagan “Government is not the solution to our problems, government IS the problem” - VanillaMan - Friday, Oct 3, 08 @ 4:12 pm: ==I knew what I could afford, lived within my means in a home my family outgrew long ago, and now I’m supposed to pay for someone who makes $40k per year but decided to buy a $300k house?== In many parts of the US, $300k will buy you a dog house. Average prices for homes on the East coast and West coasts, and even around Denver, Salt Lake, and Phoenix are over $300k. Yes, partly the price increase was due to the bubble that developed because housing demand were artifically high due to Fannie Mae and Freddie Mac, but owning a home is one of the best ways to build a society. We have a lot of instability and home ownership is a great way of stabilizing a community. There are good reasons to offer low income families mortgages. Sadly, due to market prices, this means getting a family earning $40k in a $300k house. But if you take a look at what you are getting for $300k in these part of the US, you are getting an entry level house, not a new McMansion. We all have to start somewhere. If you ended up in Seattle right now, you would probably not earn enough money to get a mortgage on an entry level house without Freddie’s or Fannie’s help. It is good to get families into houses, so I salute the attempts to do this. The failure occurred when it got out of hand. With average home prices of $300k, realtors could make good income selling houses to a market previously unable to buy. This in turn kept the houses artifically high instead of getting them to real market value. When folks who couldn’t pay their mortgages were forced to default, it wasn’t a problem until an economic downturn forced hundreds of thousands to default. This collapsed this house of cards. So, if you want to tell a young family living in Boston, Chicago, Seattle, Albuquerque, Austin or Orlando that they have to rent and move instead of settle down and build a family within a community, then slam the door in their faces. I just don’t think blaming families trying to enter the housing market to buy a house is the right way to go. It just doesn’t seem fair. Instead, we needed to have put restrictions on the situation being abused by banks and realtors and demand that they undertake more of the actual risk. They got greedy and Congress defended the greed and abuse. Congress is to blame for this. If they wanted to establish these programs, they needed to ensure that they implemented and enforced methods to keep the programs economically balanced. - Pete Speer - Friday, Oct 3, 08 @ 4:18 pm: Welcome to the investment bankers/New York banks reemployment program. As far as I can reach out there has been no problem generally in Illinois banks, except for those who had the hammer laid on them to do more lending to underqualified buyers or else they would not get municipal deposits. These are the mid level and small banks who have surplus money deposited at the Fed and who loan overnight to the big boys (paid back nightly) so they can make more loans. These are the banks that have lines of credit to local businesses and have not pulled back. Thank God for them. But they have been fooled by the Federal system. They should have been bad boys. There have been two threads to these foreclosures –the sub primes made to the lower incomes and the sub primes made to the middle class flippers who also faked their balance sheets. By the way, McCain just blew the election approving that earmarked to the hilt bail out bill. There goes one plank in his platform - -the one that really resonated. He undercut the Veep nominee. These people were sucked in by corrupt real estate agents, mortgage brokers, banks and at the top of the heap investment banking firms and hedge funds. In a subdivision you usually found that the builder had gotten favorable construction loans from his bank, hired a big real estate firm to market and sell the property. He had also arranged with the bank favorable lending rates — and marked up his prices to pay for the buydown. First time home buyers are a dreamy lot — I can feel for them. I would bet that damn few of them were aware that the rates they were getting merely meant that the difference each month between their rate and the market rate was being added to their principal. At the rate change date they would be financing a much larger mortgage principal than they anticipated. The whole low doc/no doc loan system encouraged buyers to purchase well above what a full doc mortgage would have supported. The agent and the mortgage broker or the bank worked with a wink and a nod, making it seem that they were all partners. But the financing was immediately profitably sold to Fannie and Freddie or the hedge fund/investment banker to pool. That liquified the bank to make more loans. If the mortgage broker was putting it directly, that gave him additional access to the final purchaser. Interesting question — where did they get the downstroke? Did it come from family or friends, or did the realtor find a home equity line of credit? Or was it all wrapped into the First mortgage The problem with the TV thing is that it is great at showing the crisis, but they talked to live people who could have told them the reality of their own situations. Too dull, I guess. The came what I call the parade of fear. The first foreclosure, the first short sale which established a basis for believing that because of the short sales and foreclosure, their home was worth a helluva lot less than they paid for it. And because their mortgage payment was a good bit more than the 25% of income which used to be the gold standard, they came to believe that their suffering was not reflected in the obvious (short sale) value of their house. The one guy was paying $3,100 a month — even if that was the full PITI (28% being the standard now) — that implies annual income of $132K to be standard. A lot of families that bought didn’t make that much. They were squeezed and sacrificed from the get go. But others no longer believed that the value was in the house…their “savings account” had disappeared, and the mortgage was higher than the foreclosure value. So they walked and became another example to those who remained. Moved into a smaller rental house closer to where they worked (don’t forget the high transportation costs now in existence, that helped them make a decision.) From the lender’s POV, with its capital base it was willing to take less than the mortgage value at foreclosure because it re-liquified them to make additional loans. The bill changes nothing. It does show what the price of a Senators vote was. We got 115 Billion in earmarks in addition to 700 Billion in Bailout. And who is managing this fiesta? A former investment banker. Do you really think he is going to put it to his friends? - Snidely Whiplash - Friday, Oct 3, 08 @ 4:31 pm: V.M., I recognize your points, but we have to face reality: the American Dream is dying. If you can’t afford a house, you can’t afford a house. There isn’t much of a “middle class” anymore. You don’t change that by acting irresponsibly and begging for taxpayers to pay your mortgage. Speak out. Organize your neighbors. Run for office. It’s a cop out. It’s like saying, “It’s not fair that I can’t afford a car, so I’m going to swindle someone in order to get one and get the government to tell the rightful owner I get to keep it if I get caught.” Huh? - Cassandra - Friday, Oct 3, 08 @ 4:38 pm: I wonder how many loans banks would give out if they operated under a system where bankruptcy judges could modify loan terms pretty much at will. Any loan you make could easily end up being a completely different loan in a few years. There is no free lunch, alas, and promises of “forced mortgage modifications” ignore what could be some unpleasant unintended consequences for the struggling mortgage market (and homeowners and wannabees) under the Dems. - Rich Miller - Friday, Oct 3, 08 @ 4:51 pm: ===where bankruptcy judges could modify loan terms pretty much at will.=== Pretty sure that was the case not long ago. - Cassandra - Friday, Oct 3, 08 @ 4:56 pm: I thought that was the part of the bailout that didn’t get through. - Anon - Friday, Oct 3, 08 @ 4:59 pm: When did Jill Morgenthaler get upgraded to “semi serious?” Was it when she took a shot at Rod last week? - Rich Miller - Friday, Oct 3, 08 @ 5:04 pm: Quarter-serious? I’ll let it stand as is. - Pete Speer - Friday, Oct 3, 08 @ 5:22 pm: yes, the American dream is and was home ownership — and it was to be earned by renting and saving — doing without so that a downstroke could be saved up for. The house flippers thought they had free lunch, Not only could they buy big they could home equity the Plasma and the new vehicles and all the tangible and non tangible fun and games. It used to be that pa worked, mom stayed home and the kids got a job after school and before school flipping papers. Somewhere consumption/gratification became the modus operandi and at the end of the line all that was there was premature ejaculation. - Anon - Friday, Oct 3, 08 @ 5:27 pm: Hae a good weekend Rich. - Wumpus - Friday, Oct 3, 08 @ 7:17 pm: I wonder what Antoine Members’ take on this will be? Will he go after Rush? That commercial sounds as if they pieced it together from 1000 different recordings of him. - elgin - Saturday, Oct 4, 08 @ 4:55 am: I’m glad Roskam held his ground. - Disgusted - Saturday, Oct 4, 08 @ 6:08 am: Good analysis, Pete Speer. For Anon. who wanted the voting breakdown for Nov. 4th., don’t bother. Just vote out incumbents. If it’s done national-wide, it will be an eye-opener to those who aren’t up for re-election yet. If they are not part of the solution, they are part of the problem. How long do you think we, meaning tax-payers and voters, would last if we operated our homes like the government operates? Greed comes before American now and that’s a damn shame. Sorry, comments for this post are now closed.