Washington scrambles for subprime answers

[flashl]

Source: Reuters

WASHINGTON (Reuters) - With the subprime mortgage crisis fanning recession fears, Washington is scrambling to jump-start the U.S. economy and ease the blow of falling home prices and rising foreclosures.

The Federal Reserve is slashing interest rates and Congress is moving fast to complete a fiscal stimulus package likely to include steps to prop up the mortgage market and help save many Americans from being thrown out of their homes.

Emergency policy options, as well as the outlook for long-term reforms to the banking system, will feature in discussions with 20 top lawmakers and regulators scheduled to appear at the Reuters Regulation Summit that runs February 5-8

...

The subprime crisis, more than any other recent troubles in the business world, such as the Enron collapse or the stock analyst scandal, is revealing the street-level dangers posed by long-festering problems at the core of the financial system.

Reuters

Read more: http://www.reuters.com/article/ousiv/idUSN0146432320080204

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What the prob? The fundamentals are sound. Isn't that what we are being told?

[redqueen]

1. Who's bettin on 'taxpayer-funded bailout'?

[flashl]

2. DU virtual $1. nt

[KansDem]

21. I'll bet you 10 Euros...

[Quantess]

3. Greenspan said "no one could have foreseen this happening".

What a liar.

[Skittles]

4. it's amazing, the things that cannot be forseen

terrorists flying into buildings, the debacle in Iraq, the breaching of the levees, etc. WTF!!!!!!!!

[Quantess]

5. Others foresaw a mortgage crisis, but Greenspan couldn't?

So we're to believe Greenspan isn't all that smart at economics, after all.

[Joe Chi Minh]

6. What person in their right mind would ever have said he was?!

[Quantess]

7. I think he knew exactly what was going on.

He's not an idiot.

[Binka]

11. Holy Shit Shitspan Manufactured And Enabled This Crisis

The old federal reserve whore created this mess. By design.

[ursi]

12. and the rich asshat should be prosecuted ...

[Binka]

13. To the full extent of the law n/t

[SoCalDem]

16. That's why he quit abruptly.. the handwriting was on the wall

and he wanted it to collapse on someone else's watch..:grr:

[Joe Chi Minh]

20. Sorry. I misinterpreted your gist.

[krkaufman]

8. The subprime crisis is just the tip of the iceberg ...

... if a real recession hits and we have a lot of job losses. We have our highest personal debt load ever, and so we're extremely vulnerable to any significant downturn.

[pokercat999]

17. It won't even take that much! As the value of homes drop

why would anyone continue to pay their mortgage? For instance let's say you are buying a $500,000 home with a 0% down mortgage. The value of that house falls to $400,000 and you can replace it by walking across the street and buying a second for $400,000, stop paying for the first home and realize a "profit" of $100,000 would you do it? CEOs collect multi-million dollar payouts when leaving companies they almost destroy without shame, hedge fund managers pay a lower % of their income to taxes than regular workers without flinching, so why is it wrong for the little guy to stick the bank with the falling market?

You are correct in that this is just the tip of the iceberg. My advise, if you can, borrow enough on your equity (if you still have any) to buy outright a smaller but adequate housing (like a town home or condo) if the day comes that you have to walk away from your McMansion you will still have a place to live that is free from mortgage. This is what I have done and I'm renting out the second property for the fair market value and a small profit. I hope our economy recovers and I never have to take this option but without apology or hesitation, I have to protect my family before the bank.

[krkaufman]

22. another looming iceberg

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3170294

p.s. I'm going to have to print and study your post. It is the text equivalent of the Peanuts schoolteacher, to me.

[Trajan]

9. The answer ?

HIGHER WAGES ! ! ! !

As if they don't already know .... HIGHER wages can pay the bills ....

They have been fighting decent wage gains for decades .... and NOW their little bird has come home to roost .... This is EXACTLY what was bound to happen, given that payments were increasing as expenses were increasing, but pay was stagnating .....

The math isnt that hard .....

[TalkingDog]

18. Are you CRAZY???!!!!

And take one thin dime away from the top 10%ers? How can that possibly be considered fair by any rational person?

They earned that money off the blood and sweat and back breaking labor of YOUR brow! How DARE you ask them to give it back to the people who worked for it.

What are you? Some kinda COMMIE?

As for the economy ignore the workers in that upper floor and notice how strong the FOUNDATION is, because it's the property that's valuable.



My Favorite Master Artist: Karen Parker GhostWoman Studios

[DCKit]

10. It may not solve the problem....

But renegotiation of the current sub-primes and ARMs would go a long way to ensuring that many, many families could stay in their current homes and continue to pay.

If there is a corporate bailout for the people who should have known better - many of whom should currently be in jail awaiting a court date - then this renegotiation of existing mortgages should be part of it.

[SoCalDem]

15. Just make them all 6.5 30 yr mortgages and let the chips fall where they lay

If mortgage companies/banks lose money.. they just should give back some of the windfalls they have been raking in for ages..or maybe they are not savvy enough to even BE in business.. isn;t that the way the "market" corrects itself:)

[truthisfreedom]

14. Wait a second... Washington scrambles for subprime answers? I thought they were the experts at

subprime EVERYTHING! America for sale, everyone! At 1.5 cents on the dollar!

[damntexdem]

19. That headline sums up everything about the Bushistas.

And indeed all of their answers have been subprime.