All I can say is if that guy committed suicide, he must have REALLY hated his job.

(PB, you're going to need to be on your pirate game if you want to go a dueling on the SS TPM Cafe. And I don't think you've even met most of the A-team yet.)

Just sayin'.

I guess you could all ask for separate checks.

My overall point is that homeownership as an institution is more valuable to the nation than the "housing market" is. People need to be able to stay in one place and feel good about being there. On the other hand, when they need to move they need to be able to do so. (Some "market" aspects have helped accomplish this in the past, but housing is more than a market.)

We now find ourselves in the opposite situation. No one can feel good about owning a home because they don't know how far prices will drop, and they can't move because they can't afford to make payments on their house and a rental in their new location. That's not even taking into account the effect of job loss, which is going to be the next big wrinkle.

You are correct that the size of the mortgage is the problem, which is exactly my point, and why I'm saying we need to force the banks to write them down, practical or not. It's worth noting that banks ought to be doing this on their own. Back in the old days, before credit default swaps, gigantic bailouts and personal destruction via credit reporting, banks that offered risky products might have found themselves in a position where they'd have to sit down with their customers and say "well, what CAN you pay?" And they'd have to work it out with their customer and chalk it up to experience. But no more.

It should be in the banks' "best interest" to act on behalf of everybody. The fact that it isn't, and the fact that banks can force people to pay according to the terms of what we now know were contracts that shouldn't have been written, or render huge swathes of people homeless with hardly a second thought, is the big clue that the social contract is messed up.

To sum up, housing is an institution, not really a market. Treating it as a mere market has been a miserable failure. It's time to stop this.

What is really irritating about this is that these guys seem to think they're teaching us all a useful lesson about the value of money. Pretty soon they'll be charging us just to watch them at work. (How about that--you're not paying "Interest" anymore, it's been re-labeled "Tuition!" Maybe GS could get nonprofit status and a .edu for their web site.)

Right now we're rewarding ethical and unethical bigwigs, and leaving both ethical and unethical little people out in the cold.

Fnma just asked Treasury for $15bn more.

How about a holiday plan where your entire credit card payment goes toward your principal and there's no additional interest as long as you pay more than the minimum? I don't know, something like that.

http://activerain.com/blogsview/1243528/is-the-fdic-killing-short-sales

It's worth clicking on the links.

(It would be better to administer lie detector tests to the people who set up the mortgage programs, but we all know that won't happen.)

In any case, the taxpayers are already on the hook for all the mortgages. The bank bailout is structured so that banks profit from holding onto properties as long as they can and then letting them eventually drop into foreclosure. So hey, they're making money, but meanwhile the foreclosure machine grinds on, courtesy of the US taxpayer.

I'm just saying that if we want the crisis to end, we have to fix the foreclosure math. I agree it's frustrating for people who were "responsible" to help out those who were not, but it was frustrating for "responsible" people to pony up money for AIDS research, too.

So--time to hold our noses and sell all those bubble houses to their owners at the current value. Otherwise, it's going to be more churn and drang, more population instability, and more money funnelled to banks as they do everything but solve the problem.

I hope you can sign on to this one, Ellen. In terms of justifying your love (a la Madonna) I don't have much, except that it's time to choose up sides, and if I have to help out the bubble buyers in order to turn off the hose that's currently showering the bubble creators with money at the expense of the rest of us, well, I can get behind that. I hope you can too.

I will concede that the tax credit is silly. But you all are missing the point. This is not a crisis in the housing market, but a crisis in the idea of housing.

The reason home ownership exists is so that ordinary people can believe they've got a measure of stability and prosperity in a high-risk world. Let's admit this up front: the housing=stability meme is what Ibsen would have called a life-lie, but it's a pretty decent one as these things go, and in general we all support the housing=stability life-lie with things like the mortgage interest tax credit, neighborhood events, gardening competitions and the like. It's nice. It's good. It makes families feel more stable.

(To people who are big rental fans I say go out and get your own delusions of stability and leave the rest of us to ours.)

When the Financerati decided to play fast and loose with the housing-is-stability delusion, they opened a can of worms. Never mind whose "fault" it was, the buyers or the banks, the real estate crisis has pointed out to every homeowner in America that THERE IS NO FLOOR TO THE HOUSING MARKET. And there's nothing like looking down to get people nervous about being on the high wire. (To those who maintain that housing prices need to "come down" is zero, with almost nobody qualified to buy anyway, what you had in mind?) A social contract is being busted up here, and it needs to be repaired.

Sure, people who are buying houses are happy to take the tax credit, which is intended to shore up the social contract and make people believe that housing is "safe" again. (In desperate times, of course people will take money.) But people aren't dumb. Everybody knows that as long as the foreclosure machine is running, there's a real possibility that the only direction for ordinary people is down.

I have been saying this since 2006: the only way to end the housing crisis, and the economic crisis that sprang from it, is through principal reduction. Anybody with a yearly income of less than, say, $300k per year who purchased a home (or perhaps even an income property) during the bubble years should be handed a no-questions-asked, no-credit-hit, refinance of their home at its CURRENT VALUE, at a low, fixed rate. End of crisis.

(It's too bad we didn't do this a couple of years ago when all the cheap neighborhoods tanked. It would have been a lot less expensive.)

The fact that banks have not requested this fix and the government has not offered it, tells you everything you need to know about who is running the country and how concerned they are about the middle class. When the banks own enough housing, they will just figure out a way to "rent" it to people, hold a lot of it off the market in the guise of careful underwriting, and drive prices back up that way.

For those of you about to throw a fit about principal reduction and the "greedy" homeowners who bought homes they couldn't afford, please read any book about how human beings will gang up and persecute each other about stupid, meaningless things (Lord of the Flies, The Scarlet Letter, The Human Stain, etc.) and get over it. This is not about the guy who bought the investment property, or the guy who got the house with three bathrooms. It's about where the nation's money ends up--and I'd like to see a little more of it in the hands of people like you and me, thanks very much.

So Dean, please, less about the tax credit, and more about restoring public confidence in housing, even if you are one of the "smart guys" who knows that housing isn't the safety net we like to believe it is.

Sorry about the rant, but this is as plain as the noses on our faces. The subprime foreclosures are almost over, and the veil will be lifted as the extravaganza gets really ramped up in "ordinary" neighborhoods all over the country. I just hope the realization won't come too late.

www.healthcarebillindex.com

Senate bill will be available online as soon as it becomes available in the correct format.

Tonight's message is that the Republican base is still somewhat bamboozleable if there's no Republican moderate in the mix and the Democratic candidate has a flaw that can be attacked.

The Passionate Democrats, though--the ideologicaly driven Green-leaners--not so much. They're really peeved about the Captains of Industry snuffling at the trough a year into this thing. And when you take a bunch of passionate, do the right thing types and underwhelm them, the silence is deafening.

So yeah, this is a beer moment for Obama and Axelrod.

Talk about tea partying while Rome burns.