Hey Rick, are you listening?

On the other hand I live next to an abondoned house and have nightmares everyday what that does to my home’s value and everyone else on the block. Something has to be done to fix this problem and it’s not going to be pretty no matter what we do.

If you let all the houses forclose, don’t readjust the mortgage backed securities then banks stop lending and house prices continue to plumit.

For those in California struggling to make the payments on their $500,000 starter home, letting it go and renting for $1,500/month instead greatly increases their monthly free cash flow.

I work on Wall Street for a hedge fund and me and most people I know find it hilarious how trillions of dollars can come to the banks, just a small handful of them who took hundreds of billions can pay out $20 billion of it it bonuses, and yet people latch on to the outrage of Rick Santelli, a pit trader surrounded by pit traders who all benefit from the trillions handed down but now get pissed because $85 billion is going out to the rest of the country.

Personally I rent, I’m single and live in NYC and will buy a place when I’m married so I would love for home prices to continue to crater. I would love for them to fall to uber-depression levels. But if you own a home, regardless of whether you can easily afford it or not, why on earth would you not support a program that will help stabilize the part of the housing market that is dragging your home value down day by day? It’s absurd. And Santelli should read the program, it only goes to help people who are current on their mortgage and their mortgage values are 105% or less of their home’s value and the lender can bring down the payment to 31% of their monthly pay. The lender has the choice, if they rework the mortgage they will get up to a $1000 credit.

There’s a reason the middle class in this country is in such bad shape and it has to do with the fact that most of them can’t understand what’s good for them. They’d rather protect guys like me who have made more by my age of 30 than they’ll make in multiple lifetimes because they think of me as a “capitalist” while I view them as idiots who would be dumb enough to give me anything.

The stock market was at the top of the bubble valued at three times fair value. That means that the typical middle-class worker had little hope of receiving a good long-term return on his savings. We were all “free” to flush our retirement money down the toilet!

And the same basic problem applied in the housing market. The “free” market was telling people that they could afford homes that they could not afford in the real world (loose mortgage policies were a consequence of the bull-market mentality that leads us to believe that prices only travel in one direction). Again, how “free” is that sort of market really?

I believe that for a free market to function we must provide people with the information needed for them to make responsible decisions. That means providing widespread access to information about the long-term effect of valuations. Until we do that, I see no realistic alternatives to government bailouts (as damaging and unfair as they are). The blame for these bad decisions should be put on all who contributed to the problem (that’s all of us), not just on those who signed contracts under the mistaken impression that they were obtaining a reasonable value for their money.

We need to clean up the stock market and the housing market before we can begin holding people fully responsible for their financial decisions again. It’s just not right to hold people entirely responsible for decisions made at a time when it was all but impossible to obtain realistic assessments of the value of the things being purchased.

I can see why many are concerned about the bailouts. But I can also see why many see a need for them. I think we need to get more serious about adopting long-term solutions to the very real and very deep problems in our financial system that caused our economic crisis.

I don’t see this as a Democratic problem or a Republican problem, I see blame (and credit) on both sides of the political spectrum. It’s not an option to do nothing.

Rob

Rick Santelli

Does this make sense to anyone?

Didn’t guys like Rick take those losers mortgages and repackage them into crap pieces of paper that made them 10 times as bad with them ultimatly ending up as AAA rated investemt time bombs in everyones retirement portfolios?

Also, how is that our prescription to solving a problem brought on by individuals taking on too much debt, is for the government to start taking on massive amounts of debt? There’s your irony.