"Be careful what you wish for. They wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures.''Bloomberg has the rest of the story.
The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code
...
Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.
----
I smell toast burning. Maybe the charcoal parts will make the sh¡t sandwich taste better?
Update, my favorite quote:
Four million subprime borrowers with limited or tainted credit histories will see their mortgage bills increase by an average 40 percent in the next 18 months, according to the National Association of Consumer Advocates in Washington. About 1.45 million of those will end up in foreclosure by the end of 2008, said Mark Zandi, chief economist at Moody's Economy.com, a research firm and unit of Moody's Corp. in New York.
More like 4 million will end up in other hands. Analysts keep making the mistake of extending past trends into the future. These people cannot afford these houses now and they cannot afford them when they go down 40% in price. They need to get out of my houses and they need to work a lot harder for less money to pay for my investment returns that they promised to me.
20 comments:
Actually you smell a Murst! cooking.
First they came for the homeowners and I didn't complain.
Then they came for the credit card holders and I didn't complain.
When they came for me, there was nobody left to complain.
NR
Damn you Oggy! Why did you have to leave your cave so promptly today? I coulda been a contender for Murst.
NR
Ahhh, just like the old days. Fighting over firstliness.
Sometime real soon now the stocks of these companies are going reflect reality.
A month ago ABK was 70 today retesting the 24 lows.
See if this chart doesn't make you go hmmmmm:
ABK + WM.
Ha-Ha-Ha!
They're finding out that money is indeed a zero-sum game.
And BofA didn't know this? They have a marble monstrosity just up 15th St NW from Treasury,(I idled by it this norming.)
Classic.
We can expect a boom in the debt reduction services sector.
Heck, given enough debtors, I could strong-arm advantageous rates from any of those dildos, and wouldn't even need my waterfront negotiating tool to do it.
LoL! "Dildos." Just what part of New England do you hail from? It either that or Jersey. [shudder]
Ya got to admit it is kind of funny looking at these BANKING tools wallowing in the cesspool they created.
They preyed on pinheads with cartoon TV ads for 4 years.
It blows up in their face.
Even when they take back the house, they LOSE money.
The pinheads are countersuing them saying they were taken advantage of. The bankers need good lawyers and PR men as a risk management expense and no upside. They LOSE money.
They pushed for tough rules after having soft credit policies on credit cards. They LOSE money.
Like the pinheads, they believed the market can only go up, so they buy toxic waste for the high returns last year without doing due diligence. Now they LOSE money quarter after quarter.
They buy competitors thinking it is a good deal but later find out it is better to keep treading water than grabbing the anchor thrown to them.
So they LOSE money.
They come up with complex finanical instruments that now blow up in their face like Wild E Coyete. Nobody will touch the the stuff. They would love to unload it but cannot show the real value else they are sunk. So they are stuck with the waste of others and they LOSE money.
They are so busy shafting customers with ARMs by not resetting rates to one they can afford, that it starts to have solid homeowners give up and let the house be foreclosed on. So they LOSE money.
They look so stupid and greedy, that AGs investigate and then stock buyers short them which lowers their value. Yup, they lose money.
They are terrified big investors will pull out, so they make dividends even though they should conserve capital. People with their stock see reserves that are too low for the antiscipated havoc and refuse to lend them any more capital, so they cannot reinvest it at higher rates. Result? They lose money.
So, what are they going to do? Crank up the ATM charge on their customers who have cash to $10 and watch those folks take a hike for a credit union with their savings?
They have been meddling with govt for so long, EVERYONE is watching. Fannie Mae says take a hike and the bankers cannot twist arms this time.
Kramer is crying for them to no avail.
Maybe the police ought to tape off the area in front of their high rise headquarters in case the execs decides to start jumping.
But mark my words, somehow some ratio will be spun postive for which to base their big EOY bonus upon. There has been a total meltdown from their greed and they are talking about a reduction in bonuses of 10%. Amazing.
H,
I saw that too about the 10-15% cut in bonuses. Sheesh. 'damn I only get 9 mill this year instead of 10'. F*CKERS. what's sad guys/gals is rest assured the government will bail the banks out. Always have and I would be will again. Get ready to open your wallets! What probably won't happen is that the bailout will cover the folks suckered into these loans....which if we were going to have ANY bailout I would say that should be the one. I prefer no bailout whatsoever and let the free market take care of business. Lots of folks would get hurt but how the hell are they going to learn?
Rob:
"Just what part of New England do you hail from? It either that or Jersey. [shudder]"
Neither.
New Orleans, "DownthaParish" actually, (almost the same accent, ethnic makeup, and petrochemical smells as the North Joisey Showah, but FAR better cuisine...with gators, and hurricanes.)
Interesting insight on the bankruptcy law change coming back to bite the lenders. I hadn't realized it earlier, but the bankruptcy laws probably are one of the major factors as to why foreclosures have been soaring. It's not that people don't want to declare bankruptcy to try and save the house, it's that they can't.
But I wouldn't expect $10 ATM charges anytime soon. The banks need depositers like Casey needs Supporterz™, and I can actually see a lot of incentives for checking and savings accounts. Why? Depositers don't know what a bank's credit rating is, and will happily take 5% for savings (2% or less for checking) when the markets are demanding 8% or more.
I'm expecting to see a "ppt to the rescue!" comment right about now.
PPT? Is that an abbreviation for short covering rally?
Actually, I'm a PPT believer of sorts, but I don't think it's the Fed that stages these "convenient" rallies, I think it's the Wall Street firms. A little manipulation of the futures, a sudden influx of buy orders at a critical juncture, and a down market can be turned around.
I should say that I don't think there's any collusion, but there doesn't have to be,. The trading desks for the big firms know that everyone else will jump in at the critical moment, so they prepare for it, wait for the right moment, then make it happen. The selling action yesterday was very strong, but today not as much, so the right opportunity for engineering a bounce. The big firms are going to do what they can to keep the Dow north of 14,000, and keep its drop short of the dreaded 10% (= correction) mark.
The Bigs are doing in the stock market what Enron did in the energy markets. "Fat Boy," "Death Star" and "Get Shorty."
Jim Cramer to the rescue ...
10 reasons to be bullish
4. Interest rates. The financials are so dire that the Fed will have to cut twice by year-end or give us another half-point cut, which will flush a huge amount of money from the sidelines and embolden banks to start lending again.
8. The government. The federal government or the Fed actually steps up and buys AAA and AA tranche CDOs to get things moving again. This is simply not that hard a task, but they haven't shown any inclination to do a thing so far. They could surprise us.
Yeah, let the taxpayers throw some of their funny money into this bad paper.
http://tinyurl.com/3bmdjl
BTW, tinyurl.com supports Ron Paul!
But, but - I thought cash back at closing was income.
That is what Casey said on his blog..
Wile E. Coyote - Super Genius.
Let's get it right.
Anecdotal rambling....
..so anyways I'm at the friendly tax lady's office this evening figuring out how fucked I am with my shorts paying off and sort of ignoring Uncle Caeser until now.
After we figure I'm not so fucked at all but to drop in quarterly from now on she starts telling me about GREAT property deals here in Vegas. She mentions a girlfriend buying a $450,000 house for $250,000 and that HUD is cutting lose properties for only $1 down.
I mention I'm waiting until prices drop more, I want a $250,000 house and I'll put $50,000 down.
She looks at me like I'm crazy for wanting to put anything down, but mentions with 50k down I could get an equity line of credit and do upgrades yada yada yada. Mentions that February and March will be THE TIME TO BUY because that is when foreclosures will peak.
She follows me out into the parking lot continuing the sales pitch and mentions she has a female Realtor™ friend who she will hook me up with when I come back in January.
Remember, this tax lady knows what I made last year, what I will make this year (salary, investments could still change with wild stock market fluctuations and everything else a tax lady should know).
Now that I've revealed to all you readers exactly what the Vegas market future is (after all tax lady couldn't be wrong) I have just ONE question...
....should I have asked for a picture of Realtor™ lady and her marital status right then or is waiting until January better?
If the Realtor™ lady picture involves a pole and fishnets I may have to expand the areas I'm considering to include looking at more houses.
Remember, better proofreading stops 'deleted by author posts'.
Has anyone here seen the Maxed Out movie? I highly recommend it. It was made in 2005-2006 and talk about this new bankruptcy law. Anyone who has been following the housing market, and consumer debt could likely see what could happen.
I would like to one little warning that I feel the film maker quietly paints one party better than the other and only has negative things to say about this bill. While this bill has created problems, I don't think it's as bad as the movie paints it to be.
My father had a small business and there are cases when people would skip out on bills on purpose by declaring bankruptcy, which can't easily be absorbed by small businesses and isn't fair to anyone. It can also be really hard and expensive to prove this person did this on purpose.
What this law did, from what I understand, is if you are above the median income for your area, you can't declare Chapter 7, but you can declare Chapter 13.
Anyways, I really did enjoy the movie and learn what is going on out there. It is really scary that in my building a debt collections company for dead people exists right below me. Basically, from what I understand, they harass the families of the deceased to pay their bills. We've had to security in front of the building for several weeks. I don't think people like them very much, and I wonder what those employees are like.
Post a Comment