About the Blog
I’m writing this blog because the economy can only work if people have data and understand how it works. Sadly that isn’t the case for the bulk of Americans across the entire economic spectrum. I fear that our leaders are as poorly informed as the average consumer. I hope this will help.
About Me
I am a graduate of the Massachusetts Institute of Technology and the Stanford Graduate School of Business. I work in Silicon Valley in product management.
Feel free to contact me by email at watchingmarcitz@yahoo.com
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Unfortunately, our leaders ARE average consumers.
Marc,
Thank you so much for your work in setting up this site and, most importantly, for being the only site I have seen that is trying to organize e-mails to Treasury. I think this DOES have a chance of influencing their ultimate decision. Pres. Bush (based on what his White House Press Spokesperson said in her daily briefing on Thursday, I think; it was on C-SPAN), considers this an “important factor”. Paulson, and, even Barney Frank have made references to this fairness, “free ride”, problem, and that they would like to avoid it. Sheila Bair, at FDIC, who also needs to receive the same e-mails, started the push for a massive, “systematic”, one size fits all mortgage bailout. This is based on the false assumption that housing prices should not be falling, i.e., they don’t admit to an irrational bubble when it is obvious, and that every foreclosure should be stopped, with whatever modification it takes to get the homeowner down to only paying 38% of current income. Robert Shiller is a good cite (his very prescient “Sub-Prime Meltdown Book” (2008) because he liberally advocates foreclosure bailouts for the good of society, etc., but ONLY for lower-income people. He also states that no (coming) bailout should be based on a public policy of propping up irrationally prices home prices. He has a great description about why these looses are only “paper losses” and not losses to the “real economy”, and that society is actually WEALTHIER with housing prices returning to rational values, because young people can afford a home again on their expected savings and income, and, thereby, it brings BACK the “American Dream of homeownership.” While he doesn’t go on to say renting is not so bad, his statements are very persuasive for “ownership society” types like all those involved in this bailout decision. People should send the same e-mail to Barney Frank (anyone can e-mail him from his COMMITTEE’s web site (House “Banking and Financial Services Committee” or something like that. Same for Schumer I would bet. And, people should e-mail their own elected representatives.
Thanks again.
I would like to be able to agree with that all this bailout money that went to the banks is propping up homebuyers whose homevalues are underwater. The HAMP (making homes affordable) is not being used to assist the in trouble homeowners as Mr. Geithner, etal, and you are saying. The lenders with all our money and attorneys have figured out a formula that allows them to keep demanding document after document from the homebuyers to support their loan modification application until they no longer have the means or the will to qualify for the program. Furthermore, since the lenders know the complete financial situation of the applicant, they can determine the date at which they will fail the means test to qualify for a Chapter 13 Bankruptcy petition. Though you defame the homebuyers, many of us have invested tens of thousands of dollars into our homes in good faith, not missed payments until some unforseen and out of our control circumstance, such as an illness or layoff, hit us during the past two years.
The Nasty Truth is the Lenders do not have to modify any loan temporarily or permanently. They have a legal contract with the buyer which cannot be interfered by the Government. This is just like a great magic show: smoke, mirrors, sleight of hand and distractions. Just look for how many real loan mods have really been successful. The number is a dot on the head of a pin compared to those Mr. Geithner, etal, have calculated to be eligible and those who have applied.