Comments on: Ezra Klein on The Five Worst Problems With The Bailout Bill http://www.amptoons.com/blog/archives/2008/09/22/ezra-klein-on-the-five-worst-problems-with-the-bailout-bill/ Feminist, anti-racist, pro-fat, plus whatever else we feel like talking about. Sun, 21 Mar 2010 11:46:59 +0000 http://wordpress.org/?v=2.6.2 By: RonF http://www.amptoons.com/blog/archives/2008/09/22/ezra-klein-on-the-five-worst-problems-with-the-bailout-bill/#comment-340547 RonF Tue, 23 Sep 2008 18:24:42 +0000 http://www.amptoons.com/blog/archives/2008/09/22/ezra-klein-on-the-five-worst-problems-with-the-bailout-bill/#comment-340547 I find much to agree with in this post. I do have a question, however: <i>while ordinary homeowners who entered into bad mortgages on the strength of bad advice merit nothing</i> How many of these mortgages are fairly described as above and how many of them were entered into with at least some complicity by the homeowner? I have a mortgage. I remember the conversations that my wife and I had about whether or not we could afford it, and the examination we did of our finances. I find it hard to believe that all these people were innocent victims. I have a hard enough time paying my own mortgage. I'm having a real tough time seeing why I should take on someone else's as well. I find much to agree with in this post. I do have a question, however:

while ordinary homeowners who entered into bad mortgages on the strength of bad advice merit nothing

How many of these mortgages are fairly described as above and how many of them were entered into with at least some complicity by the homeowner? I have a mortgage. I remember the conversations that my wife and I had about whether or not we could afford it, and the examination we did of our finances. I find it hard to believe that all these people were innocent victims.

I have a hard enough time paying my own mortgage. I’m having a real tough time seeing why I should take on someone else’s as well.

]]> By: Manju http://www.amptoons.com/blog/archives/2008/09/22/ezra-klein-on-the-five-worst-problems-with-the-bailout-bill/#comment-340520 Manju Tue, 23 Sep 2008 03:33:18 +0000 http://www.amptoons.com/blog/archives/2008/09/22/ezra-klein-on-the-five-worst-problems-with-the-bailout-bill/#comment-340520 My guess is we'll be fine. When LTCM was bailed out, its portfolio was valued at one point at 0. But the truth was their financial models were correct, in the long run, but they were over leveraged and didn't have time to hold onto the bet. warren buffet famously wanted to acquire it but a previous engagement to party with bill gates in Alaska (i think) prevented him from negotiating in person. The wall street banks, whom the fed muscled into buying the portfolio, made out like bandits, although they protested at first. The govt appears to be buying these loans at 65cents on the dollar. The loans are secured by property. I find it ahrd to believe they(we) can lose money on this unless we bail out the homeowners of course. Like LTCM, I doubt the financial models are that wrong. the banks are likely just over-leveraged and cannot survive the black swan. In a couple of year the govt will have huge profits from which they shore up social security. whoever is in office, will look like a hero. it a pretty good bet. a lot of smart hedge funds are already raising funds to purchase foreclosed property and defaulting mortgages. My guess is we’ll be fine. When LTCM was bailed out, its portfolio was valued at one point at 0. But the truth was their financial models were correct, in the long run, but they were over leveraged and didn’t have time to hold onto the bet.

warren buffet famously wanted to acquire it but a previous engagement to party with bill gates in Alaska (i think) prevented him from negotiating in person. The wall street banks, whom the fed muscled into buying the portfolio, made out like bandits, although they protested at first.

The govt appears to be buying these loans at 65cents on the dollar. The loans are secured by property. I find it ahrd to believe they(we) can lose money on this unless we bail out the homeowners of course.

Like LTCM, I doubt the financial models are that wrong. the banks are likely just over-leveraged and cannot survive the black swan. In a couple of year the govt will have huge profits from which they shore up social security. whoever is in office, will look like a hero.

it a pretty good bet. a lot of smart hedge funds are already raising funds to purchase foreclosed property and defaulting mortgages.

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