Economic “Do Not Fly” List
The Treasury Dept today announced that they had begun compiling a list of the economically insane, and will be publishing this list on a regular basis, according to a Washington Post article.
The reason for this: Commentaries regarding mortgage refinancing and/or forgiveness — from both political and investment players — that the Treasury department said could only be described as “ridiculous.”
WaPo:
“Don’t get your hopes up. And that’s a good thing, since ushering in a refinancing boom would only be a short-term fix for the housing market and the economy that would have long-term consequences. A widespread refinancing of loans would mean reverting to looser lending standards, one of the things that got us into this mess. It could also boost mortgage rates for new borrowers and force U.S. taxpayers to shoulder more risk, since they technically own Fannie and Freddie . . .
“We have been reading an increasing amount of absurd commentary from people who should know better,” said fictional Treasury spokesperson Ivan Tobyrael. “Much of this has crossed the line from economically implausible to criminally insane. As much as it is a waste of time, we thought it was time to clarify facts for the reality challenged.“
An unnamed Treasury official said the department was thinking of creating an economic “Do Not Fly” list. “Some of these people are dangerous to themselves and others. We want to keep them away from sharp objects.”
Treasury noted a few specific examples of what they described as “frickin’ crazy”:
-A major Wire House (and TARP recipient) suggestion we abandon loan to value standards to allow more refinancings of homes likely to default as “Uncle Sam is on the hook anyway.”
-Reuters suggestion that the GSEs are about to embark on a massive loan forgiveness program.
Said another fictional spokes-avatar: “We don’t know what they are smoking over at Reuters, but it is obviously some powerful shit.”
Either that, or the heat is frying their brains . . .
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August 9th, 2010 at 11:04 am
Ivan Tobyrael
(I want to be real)
Get it?
August 9th, 2010 at 11:10 am
What -exactly – were you REALLY doing over the weekend?
August 9th, 2010 at 11:15 am
Sounds like an opportune time for some Major Kong…
http://www.youtube.com/watch?v=wcW_Ygs6hm0&feature=related
August 9th, 2010 at 11:46 am
“The Treasury Dept today announced that they had begun compiling a list of the economically insane, and will be publishing this list on a regular basis, according to a Washington Post article.”
_________________
Since we’re talking economic insanity, I would expect the list to include central banking, fractional reserve lending, and fiat currency.
August 9th, 2010 at 11:55 am
After TARP, etc., we know that the government will do anything to keep the economy from finding its natural level of contraction. I wouldn’t dismiss the rumors out of hand. I remember way back in early 2008 getting laughed off a financial weblog board for asserting that Fannie and Freddie would be nationalized before long. (It happened in September 08). There’s no limit to the shenanigans that might be played with those two, which is why they were left completely out of the financial “reform” bill–better for politicians to use them for dishing goodies to constituents.
Unless things take a serious dive before November, I wouldn’t expect to see anything like the rumor mills have generated until at least 2012. Then, if things still suck; if housing prices are still in the crapper, it will be, “Katie bar the door”. The trickle of money now being taken from all taxpayers and given to only those with homes, as the GSE subsidies now stand, will become a flood.
August 9th, 2010 at 12:14 pm
This is a joke?
August 9th, 2010 at 12:33 pm
Their intentions are pure – to sustain unsustainable prices with government subsidy – the problem is that the help would get spread to thin with this plan, it needs to be structured in a way that benefits the 19 TBTF banks, they need to be ring fenced from pain and suffering suitable for homeowers and community banks.
August 9th, 2010 at 1:07 pm
Now if we could only get the absurdity in the Fed to stop with the deliberation over QE2.0 and another trillion (or more) in easing. Because, uh, it worked so well last time.
One day, maybe Helicopter Ben will realize that all that money into the system doesn’t promote employment, it just floods asset prices.
August 9th, 2010 at 1:35 pm
Barry for chief treasury spokesleaker.
what you harvesting up there in the woods?
the essential role of FF in preserving fictitious MBS values is why i am long them now.
August 9th, 2010 at 1:57 pm
Denial precedes capitulation.
August 9th, 2010 at 2:07 pm
time to breakout one of my favorite movie quotes:
“a rumor is just a premature fact, henry” (george ?, henry kravis’ cousin, barbarians at the gate).
August 9th, 2010 at 3:02 pm
Here is another idiot in the make-stuff-up school of journalism: Kyle Smith
The end of responsibility
August 9th, 2010 at 7:37 pm
Yeah, sure –
And what about refinancing those homes whose owners are NOT about to default and for whom default is extremely unlikley — comprising 70% of the housing stock?
HUH?
This blog ran the equity charts in previous posts — within the last month or so.
Why not?
Because the banks absorb unrealized losses — on their silly 7 & 1/2 fixed 30 yrs securities. And all the rest — wrapped up in the assets on their balance sheets. If there was a mass refinancing at current levels on the 30 yr, the banks would be crushed.
The current issue is NOT only about home value and equity contained — there’s a large portion of the housing stock with enormous equity, and the ability to trade down.
And you KNOW that’s true. You KNOW it.
.
August 9th, 2010 at 8:25 pm
BR,
“Maybe?”, oh, hey, just “Maybe?”, We can ‘make a List’ of Politicians that need their ‘Licenses’ revoked, as well? to go w/ : “compiling a list of the economically insane”…
August 9th, 2010 at 9:20 pm
It’s sad that it’s not April 1st. Please tell me it’s April 1st…………………..