So this year I obviously will be hitting on the political edge a little more than normal...

I am checking my favorite sites...Consumerist....and they ran all these articles regarding the Congress coming to the aid of the American people with the mortgage assistance programs...and now we have passed a stimulus package....LOL!!! This is going to be funny. Now I know why Allan Greenspan said I am "outta here". Our current administration seems to be at odds with the cyclical nature of our economy. They seem to believe that they can do certain things to keep it afloat....so we have no downturns...or at least it so appears. I am wondering if the terrorist have set off some kind of chemical in the water up there, and everyone has lost good common sense. Since America came into touch with Keynesian perspectives regarding our economy, and through the supreme reign of Alan Greenspan over the Fed...the cyclical nature of our economy has presented itself. It is not a falacy, it is a fact. The term cycle denotes that you have periods where the economy has high points and low points. For some reason, our current administration has propped up the economy during the housing "BOOOM"(Note I use that word in the satirical sense) and is now attempting to keep us from experiencing the downside, which means that when we do experience the downturn, its magnitude will be potentially devastating. At some point, the market will shift and there will be nothing anyone can do to stop it.

Please get that I am not (100%) against this proposed legislation. I just see it as another patch against something that we created earlier. At the top of the housing "BOOOOM" the administration kept telling us that everything was ok. Then the housing sector opened up (interest rates were kept low to induce the market) and went haywire...house values through the roof.....houses being valued for mortgages at almost 1.25 to 1.50 of their actual value....people racking up insane amounts of debt tied to their houses. Households making over $100K a year unable to afford a decent house, due to the overinflation of the housing market. During this period, I viewed a mobile home on 3 acres of land, and the wanted 95K+....get that folks....$95,000 for a single wide(and an old one at that, which had been butchered up to make it lok more like a house) on 3 acres of property with a stream running through it. LOL, Greed folks...just plain unadulterated greed. I have read stories of people taking advantage of one another over and over again during this spending/borrowing frenzy....Well it is time to pay the piper....Oh No not yet...not during my administration...we will leave the mess for the next administration.....WOW.

You know though, we have been doing that in America for a long time.... passing the buck to the next generation....passing it to the next administration.....one day our children will teach us, our undereducated, debt riddled children will pull the plug.....For all you baby boomers like me...think Logan's Run and get ready to go the special place. If you disagree with me, answer the freaking Social Security conundrum...(oops I want to go on record now saying it is not a conundrum...it is our own fear) Check the articles below...they are pieces I have been collecting regarding this mess we are creating.

Senate OKs FHA Mortgage Bill [Subprime Meltdown]

from Consumerist by Meg Marco

On Friday the Senate passed new legislation that would make more Federal Housing Administration Loans available to troubled borrowers facing foreclosure, lowering the down payment required and allowing larger loans. The House passed similar legislation in September, and now House and Senate members will have to "resolve a number of differences between the two pieces of legislation," says the Wall Street Journal.

Bloomberg observes:

"The agency's loan terms, which are more stringent than those of many lenders, may have caused some borrowers to turn to subprime mortgages. Housing officials estimate that the legislation will help about 200,000 homeowners who have fallen behind on their mortgage payments."

The housing industry, including home builders and real estate agents, pushed for the legislation because they will benefit from the expansion of F.H.A. loans, says Bloomberg.

"This legislation is the perfect example of the kind of help Americans are looking for," Senator Charles E. Schumer, a New York Democrat who was a sponsor of the bill, said on the Senate floor. "It is definitely and desperately needed."

Senate Passes Bill Easing Home Loan Rules [New York Times]
Senate Passes Bill to Address Housing Crisis [Wall Street Journal]

Looking Back: The Subprime Meltdown Explained By The NYT... In 2002 [Nostalgia]

from Consumerist by Meg Marco

The end of the year is a time for looking back and reflecting on the past. Perhaps learning from it. With that in mind we poked around the NYT archive and found a great article on the subprime mortgage market and predatory lending from 2002.

THE subprime mortgage industry, which serves people with bad or blemished credit histories, has burgeoned in the economic boom of the last 10 years, allowing people previously deemed uncreditworthy to buy a home or to raise funds by refinancing their mortgage. But as the industry has expanded, so has its dark seam -- predatory lending.

And as subprime loans have increased, so, too, have foreclosures.

Here's how the March 24, 2002 Times explains the proliferation of subprime lending:

Whatever its degree, the proliferation of predatory lending is certainly the outgrowth of an explosion in the subprime market -- distinct from the prime or conventional mortgage market, which serves buyers with satisfactory credit histories. And the subprime explosion since the early 1990's has been fueled by both the booming economy and the creation of new tools that allow lenders -- including Wall Street investors -- to rapidly assess the risk posed by a whole new group of potential borrowers.

T HIS came about because of computerized credit scoring,'' said Keith Gumbinger, a mortgage analyst and vice president at HSH Associates, a financial publishing company in Butler, N.J. Computerized scoring allows a would-be borrower's credit history to be assigned a single number -- between 300 and 900 -- by which a lender or an investor in mortgage-market securities can determine how likely the applicant is to repay the loan.

''Borrowers can be placed anywhere along that scale,'' Mr. Gumbinger said, ''and investors and lenders adjust their rates and fees to compensate for riskier borrowers.''

''It's the big mortgage lenders who fund smaller lending firms and street-level mortgage brokers that pressed these subprime products and predatory products onto the market in order to serve new audiences and get more people to owe them money,'' Mr. Gumbinger said. For a fee, packed into the loan, brokers bring borrowers and lenders together.

Ms. Ludwig agreed: ''It's not just your rogue broker or lender on the street. This is very much built into the whole investment machinery so that even some of the large banking institutions, Wall Street investment houses and bond insurers have figured out a way to profit handily from this market segment.''

Lenders provide the capital and either hold the loan or, more commonly these days, sell it either to another financial institution that buys up bundles of loans or to Fannie Mae or Freddie Mac, the federally chartered corporations that buy first mortgages at discounts, insure and then resell them. ''Or it's often securitized through the packaging of these loans, which are then sold through Wall Street investment houses,'' Ms. Ludwig said, ''usually to institutional investors. Without the secondary market, without securitization, you wouldn't have this proliferation of subprime and predatory lending.''

The article also concentrates on "predatory lending" techniques that probably seemed much more isolated than they really were. For example, one profiled consumer was told she was signing up for a 30-year fixed rate mortgage, only to find out that (you guessed it) she'd signed a ARM with a 1-year teaser rate of 5.5%.

Housing Market Meltdown Making Sellers Extremely Creative [Subprime Meltdown]

from Consumerist by Ben Popken

It's not new news that the housing market is in the dumper. That's generally good news for buyers, but shall we say less than optimal if you're looking to sell your home any time soon. So what's a seller to do? Looks like creativity is the name of the game. Sellers are dipping into their handbag of tricks to try and unload properties worth more yesterday than they are today (and worth even less tomorrow) Here's a sampling of what sellers are doing:

· A Pittsburgh couple will fully refund the home's selling price when they pass away.

· Owners in Florida are holding a raffle in hopes of getting close to their selling price.

· Others are giving away free cars and using their kids as advertising.

· One owner is even considering giving away his house and taking the tax write-off.

We're betting that we'll eventually see a person willing to pay someone to take their house!

Monthly Mortgage Rate Resets, 2007-2016 [Graphs]

from Consumerist

Credit Slips' Adam Levitin takes a look into the possibly even grimmer future of the housing market. We'll let him explain it because he's smart:

...this graph from Credit Suisse is the most sobering thing I've seen in a while. Mortgage_rate_resets It shows that most of the interest rate resets ahead aren't subprime, but are instead Alt-A and option-ARMs...

Alt-A is the category of loans made to consumers with FICO scores just above the subprime threshold. Option ARMs give borrowers several payment options, including making a minimum payment that does not even cover the interest that accrued in the last month. This means it's pretty easy for an option ARM to end up underwater, even in a market where prices are holding steady. If real estate prices are dropping, it is even more likely that an option ARM will end up upside down, which makes refinancing near impossible. The bulk of the Alt-A and option-ARM resets are coming in 2010-2011. A lot of things could change before then. But we might just be seeing the tip of the iceberg in the housing market.Do you think all those people will be able to afford their resets?

Protesters Taunt Goldman Sachs Employees By Singing "Frosty The Goldman" Outside Company Christmas Party [Videos]

from Consumerist by Ben Popken

Last week a clutch of protesters sang parodic carols outside the Goldman Sachs Christmas party at the hoity-toity BLVD club to protest the companies involvement with subprime mortgages. The activists and homeowners are mad at Goldman for betting that the subprime market would tank, while still urging their clients to invest heavily in it. However, someone might want to tell the carolers that Goldman doesn't issue residential mortgages. Oops. In any event, their song is pretty funny. Here are the lyrics to "Goldman, the Two-faced I-Bank" (sung to the tune of "Rudolph, the Red Nose Reindeer):

You know Merrill and Morgan and Lehman and Citi
J.P. and Wamu and Bofa and Barclay's
But do you recall?
The most famous i-bank of all?

Goldman the two-faced i-bank

Gave out very shoddy loans
And if you ever saw them
You'd wonder how its profits rose

All of the other i-banks
Lost billions on the subprime game
How did that crooked Goldman
Come away with all the fame?

Because it knew how bad it was
And it stoked the flames
At the same time that it made bad loans
It bet that folks would lose their homes

Right now it's bonus season
And we're shouting "don't you see!
Goldman the two-faced i-bank
Pay now or pay in history!"

Frosty the Goldman

Frosty the Goldman
Was a very crafty soul
With a gilded pipe and a lot of dough
And a heart made out of coal

Frosty the Goldman
Was too smart to lose they say
He made awful loans
But he sure did know
How to swindle us for pay

There must have been some magic
In that goldman pipe he smoked
For when he held it to his lips
He made bank and we went broke
Frosty the Goldman
Was as rich as rich can be
But still he'd say
"Make the poor folks pay!
And bring their homes right back to me"

Frosty the Goldman
Knew there had to be a way
To boost his funds
At the end of the run
On the backs of the subprime prey

He plundered and pillaged
Like a felon on the lam
Running here and there all around De Beers
Saying catch me if you can

He led us down the road to debt
And before the market dropped
He even bet we'd lose our homes
And now we holler STOP!

(thief!)

Frosty the Goldman
It is soon your bonus day
Stop telling us lies
We can rhyme "securitize"
And you sure as hell can pay

thumpety thump thump
thumpety thump thump
Look at Goldman go

thumpety thump thump
thumpety thump thump
Give up your dirty dough

Economic Stimulus Plan Passes [Taxes]

from Consumerist by Ben Popken

Accord was reached and the economic stimulus plan has passed. Here's a brass tacks breakdown:

Workers making at least $3000 but not paying federal income taxes: $300

Income tax paying individuals: $600

Working couples: $1200

People with children: extra $300 per child

Individuals making $87,000 and couples up to $174,000: partial rebates

Fannie Mae and Freddie Mac loan purchase limits increased to 725,000, a boost from the $362,000 and $417,000 caps, respectively.

Businesses can write off 50% of purchases of capital equipment

Small businesses can write off additional equipment purchases

Tentative Economic Stimulus Deal Reached [Rebates]

from Consumerist by Ben Popken

The Administration and Congress have negotiated the outline of how the proposed economic stimulus plan will play out. Here's how much in rebates you could be getting back, depending on your situation:

Workers who get a paycheck (even if they don't earn enough to pay federal income taxes): $300
Workers who pay income taxes: $300+
Families with children: $300 per child, with a cap of perhaps $1200 total.
Individuals who make $75,000+ or couples who make $150,000+: nothing.

Drat, no Mormon bonanza.

I don't mean to be the town crier....but folks....this .20 the Government is talking about giving us back of our own money...is not the solution. It is time to batten down the hatches and brace for the tsunami. Big business is and the government is helping them...but for us the consumers (mainly due to our own greed and ignorance) they are handing us a couple of dollars...smiling at us, dropping their heads(in shame) cause they know what is going to happen.

The sad part is we are standing their with our hands out as they hand us our own money....and glad about, with no accountability for their actions, for the mess they have created. Then we got another group of idiots slugging it out to get in where we already have idiots, and we all have opinions about that group of idiots, but why are we not asking why do they want to get into such a big mess. There has got to be something in it for them...what is that something. For all you Hillary Haters out there, for all of you who want to assail the name of Mr. Obama, for all who think John McCain is unstable, for all those of you who think Mr. Huckabee, or Mr. Kucinich (Did I spell that right?) or Ron Paul (Who the hell is this guy?) can save us...and think that things are not right economically, or with our healthcare system, or our education system, why are they so eager to get into this position of power...without giving us (in hand, each and everyone of us) a copy of what their solutions are to these huge problems that are eroding the very fabric of our country. Why do they want in there so bad? Can we ask that question at a debate....PLEASE...oops and get a straight answer. politician = straight answer HMMMMMM! NOT!!! Oh here is one more piece regarding the how this group of idiots regard us the idiot consumer:

Do Presidential Candidates Care About Consumer Issues? [Politics]

from Consumerist by Carey Greenberg-Berger

Most Presidential candidates couldn't care less about consumer protection, but several have taken a stand on one of the sexier consumer issues: toy safety.

Consumer rights attorney and friend of the blog Sam Glover looked to see which candidates supported bills on our list of noteworthy legislation from the 110th Congress.

Dennis Kucinich co-sponsored the Arbitration Fairness Act and the College Cost Reduction and Access Act. John McCain co-sponsored the Internet Tax Freedom Act. Barack Obama co-sponsored the Industrial Bank Holding Company Act (whatever that is). And Hillary Clinton co-sponsored the Do-Not-Call Improvement Act. If co-sponsoring is an expression of a legislator's interest in and desire to be identified with a particular piece of legislation, then this is a pretty disinterested showing, although Kucinich does seem to have a passing interest.

Only the College Cost Reduction and Access Act actually got a roll-call vote in both chambers, and the candidates apparently voted the party line, assuming Democrats favored the act and the Republicans opposed it.Some legislators are cosponsor whores, willing to anything to get their name on moving legislation, but Presidential candidates pick their legislation carefully, often preferring to write their own bills—which usually go nowhere but look good on paper.

Since not all Presidential candidates are sitting legislators, we decided to look at their websites to see who cares about toy safety, one of the more press-worthy consumer issues of 2007.

Candidate's websites are a good barometer of interest. Unlike debates or impromptu Q&A sessions, candidates have exclusive control over the issues discussed on their sites. Staffers don't add material without approval, and the positions presented are the idealized version of what the candidate would enact into policy, if elected.

Our methodology was simple. We attacked each website with our google ninja skills. Here is what we uncovered.

Democrats

Barack Obama: Obama went so far as to call for a complete ban on lead-ridden toys from China, though his aides quickly corrected his statement, but not before Beijing could lambast his plan as "unobjective, unreasonable and unfair."

In 2005, Obama introduced the Lead-Free Toys Act, which would require the Consumer Product Safety Commission to ban children's products containing more than a trace amount of lead. Following news reports that millions of Chinese-made toys were being recalled because of lead paint, he has also directly pressured toy manufacturers and Bush administration officials to do a better job protecting American children from the threat of imported toys, especially those manufactured in China.

As President, Obama will enact a plan to protect Americans from unsafe products. In addition to banning lead-tainted toys and increasing fines for companies that fail to disclose known safety hazards with their products, Obama will:

• Double the funding for the Consumer Product Safety Commission, and make sure it has the inspectors it needs to ensure that the goods we're buying are safe.
• Expand the Consumer Product Safety Commission's regulatory powers, and help the agency respond quickly and efficiently when it's alerted to a problem.
• Increase fines for companies that fail to disclose known safety hazards with the products they're making.
• Appoint a chairman with a proven record of standing up for consumer safety.

Hillary Clinton: Hillary agrees that the CPSC needs to be improved, but also endorses the industry's sham proposal for third-party testing.

"In America in 2007, the products Americans buy should be safe and secure. As President, I would:

• Immediately require independent third-party testing for at-risk imported toys to ensure they are safe before they can be put on our shelves and sold.
• Dramatically increase the number of product inspectors and deploy them as part of a strategy to meet the threat posed by imported toys.
• Establish a complete ban on lead in children's products.
• Increase and enforce both civil and criminal penalties for violators.
• Require selected companies to pay a bond pending completion of third party testing to protect consumers and taxpayers from fly-by-night foreign importers.
• Improve our system of toy recalls so that parents get swift notification and companies face swift sanctions if they don't remove recalled products from their shelves."

John Edwards: Populist ex-Senator John Edwards takes a little from both Obama and Clinton.

Ban Lead in Children's Products: The ingestion of any amount of lead is harmful. As president, Edwards will ask the CPSC to prohibit lead at any level above the most minute trace amounts in children's products including toys and jewelry. [CU, 2007; Best, 2007; Best, 2004]

Require Independent Testing: Edwards will require manufacturers and private-label resellers to certify that the children's products they sell have been tested to meet U.S. safety standards. Testing must be conducted by an independent third-party organization accredited by CPSC, and products that have not have been certified should be banned.

Stop Risky Products at the Border: Until effective independent testing of all toys is in place, Edwards will give the Customs Service and the CPSC the authority to detain shipments of toys containing paint or magnets without independent safety certification - just like the Food and Drug Administration temporarily detained Chinese seafood - and hold them until testing of a random sample demonstrates that they are safe.

Provide the CPSC with the Power and Resources it Needs: To deter even large companies from marketing dangerous products, Edwards will increase the maximum civil fine to $100 million. He will give CPSC authority to act far more quickly, rather than giving manufacturers 30 days notice while children's safety is at stake. Finally, he will double resources for the CPSC. All the Democrats agree: lead is bad and the CPSC is woefully underfunded. Are there any meaningful differences between the proposals?

No.

Republicans

Things became more difficult here. We don't want to say Republicans don't care about toy safety, but if their websites are any indication, the Republican Presidential candidates don't think the federal government has any responsibility for toy safety. Of the six potentially viable Republicans candidates, we found only one passing mention addressing toy safety.

Mike Huckabee: During an in-depth three paragraph look at our relationship with China, Governor Huckabee acknowledged that our children's toys are "not safe."

Looking forward we've got to do a better job to balance our trade relationships, especially with China. We have not challenged them enough on intellectual property rights Nor have we challenged them enough on the regulatory front. That's why we see products coming into this country, particularly food, whether it's ours or our pets that is not safe. Even our children's toys have recently been recalled because they're not safe. The result is what I think ought to be considered an alarm sounding off that something isn't quite right in what now is becoming a very unbalanced relationship, specifically with the Chinese.

That is all. Romney, Thompson, and Giuliani all focus on China's growing economic dominance without addressing the quality of products coming from the east.

We can infer Ron Paul's position because he is one of the few candidates with a clearly defined political ideology. A quick glance at Article 1 Section 8 doesn't seem to mention toys, lead, or the CPSC. Paul would likely scrap the Consumer Product Safety Commission and let the market fix the industry's defective toy addiction.

Senator John McCain's failure to mention toy safety is especially egregious. The Senator chaired the powerful Commerce, Science and Transportation Committee that handles most consumer issues for six years, but apparently doesn't think consumer protection should be part of his Presidential campaign.

The Bush Administration has trashed the CPSC. Congress put the ailing agency on life support with plans to infuse staffers and funds, but it will take a renewed commitment from the next Administration to empower the agency to keep Americans safe. Toy safety is just one of many consumer issues the next President will face. Candidates who are not willing to mention toy safety during the campaign are sending a clear signal that neither the CPSC nor consumer protections will matter much in their Administrations.

Well, that is what they deem as important...I think it pretty well sums it all up. WE DO NOT MATTER TO THEM....SAD AND THEY ARE CRYING FOR OUR VOTES, THEY ARE PRESENTING THEMSELVES TO REALLY CARE....For the record I am not a Hillary Hater, and do not get why she is so reviled. I have yet to hear from anyone a valid reason as to why they hate her so much, it is funny. I think it is a product of the media, and for the record I am not a Hillary Lover either, I am a Republican, and if the party weren't so damn corrupt at times...I would like to vote for them again. But the DNC, can't seem to get its freaking act together...they have two of the strongest candidates they have had since Clinton....and they are just letting them shred one another....HEY DNC....FREAKING MANAGE THIS SITUATION.....Ok, enough of that rant...

We's outta here!!!

Remember kiddies:

“We can’t solve problems by using the same kind of thinking we used when we created them.” - Albert Einstein