Bailout Fatigue

by Larry Levin

Another day, another bailout - or at least a new wrinkle. Today's new wrinkle to the latest bailout for homeowners was that you the taxpayer will not only be helping keep your neighbor current on his mortgage month to month, but you will simultaneously be paying down the note on his house! Somehow the government "knows" what the proper price of your house should be, which is preposterous alone, and then the government will force the bank to cram-down the principal to the government's magical housing formula's answer. This is where you come in again: YOU pay the difference.

The question we must ask now is how long Socialism will last, for it has officially begun today. Congratulations on the "change."

Today President Obama said the following: "The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in subprime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments."

First, there is a major contradiction in the statement above. Those who want to believe in fairly tale speeches and platitudes may have missed it, and I feel it is my duty to "keep it real." People who are "stuck in subprime mortgages they can't afford" cannot be one who "played by the rules and acted responsibly." The subprime loan was devised to avoid responsibility! The subprime loan was devised to avoid playing by the rules! If it weren't for the subprime loan Mr. President, these people wouldn't need help because they would still be renters. How would this program help the people who had very affordable mortgage yet are facing foreclosure due to job loss? It won't. If you had a mortgage that was in the 22-28% range of your gross income and are now facing foreclosure due to being laid off, this program does nothing for you. Despite the fact that these are the very people we should be helping if indeed we're going to put taxpayer money behind keeping people in their homes.

Second, as you can plainly see by the phrase "(we're) taking broader steps to keep mortgage rates low," the government also has a magical interest rate formula. Don't worry, it "knows" the proper interest rate. Meddling by the Federal Reserve to keep interest rates below market rates is a major reason why the WORLD is in this mess, but apparently the Greenspan Fed wasn't privy to President Obama's magic interest rate formula while he was still a Senator from my state of Illinois. What a shame.

Third, Barney Frank's Hope For Homeowners was a colossal FLOP. That boondoggle cost the taxpayer $300-billion. It did NOTHING to stop the foreclosures, but it sure did waste a $#!*load of money!

Fourth, this latest handout is "just" $75-billion. This is yet another case of Washington D.C. repeating what doesn't work. Change? Or business as usual?

Fifth, in the details of this latest taxpayer heist it reads that the plan is designed to save 9-million foreclosures, which comes out to just $8,333 per home. How is this going to fend off foreclosure of those who are upside down by $20k, $50k or $150,000? It won't! It is simply another massive transfer of wealth from those who actually DID act responsibly to those who did not.

Sixth, the President is doubling the Fannie Mae and Freddie Mac bailout to $400-billion. The bailouts just keep growing.

Seventh, for those who send emails complaining I'm too hard on The One - keep them coming. He is our President now, not bloviating at a campaign rally, and these are his programs so I can and will excoriate them if needed. However, if it makes you feel better, I did not vote for John McCain, and George Bush was a terrible President. There, we have some common ground after all. Furthermore, the Republicans in Congress who are currently feigning righteous indignation at these plans while voting for TARP should be ashamed of themselves. Where was their moral compass with regard to the wonton spending over the previous eight years? Disgraceful.

I don't know about you folks, but I am suffering from bailout fatigue. Hmm, maybe I can get a little government cheese to keep me happy while suffering?



THIS IS COMING: (tongue planted firmly in check)

Congress approved sweeping legislation, which provides new benefits for many Americans. The Americans With No Abilities Act (AWNAA), signed into law by President Obama shortly after its passage, is being hailed as a major victory by advocates of the millions of Americans who lack any real skills or ambition.

"Roughly 50 percent of Americans do not possess the competence and drive necessary to carve out a meaningful role for themselves in society," said Kerry, a longtime AWNAA supporter.

"This is why many of them voted for me. We can no longer stand by and allow People of Inability to be ridiculed and passed over. With this legislation, employers will no longer be able to grant special favors to a small group of workers, simply because they do a better job, or have some idea of what they are doing", said Obama.

President Obama pointed to the success of the US Postal Service, which has a long-standing policy of providing opportunity without regard to performance. Approximately 80 percent of postal employees lack job skills, making this agency the single largest US employer of Persons of Inability.

Private sector industries with good records of nondiscrimination against the Inept include retail sales (72%), the airline industry (68%), and home improvement "warehouse" stores (65%)

President Obama has also set an example, personally selecting hundreds of Nonabled people for top government positions, including many cabinet-level jobs.

Under the Americans With No Abilities Act, more than 25 million "middle man" positions will be created, with important-sounding titles but little real responsibility, thus providing an illusory sense of purpose and performance.

Mandatory non-performance-based raises and promotions will be given, to guarantee upward mobility for even the most unremarkable employees. The legislation provides substantial tax breaks to corporations which maintain a significant level of Persons of Inability in top positions, and gives a tax credit to small and medium businesses that agree to hire one clueless worker for every two talented hires.

Finally, the AWNAA contains tough new measures to make it more difficult to discriminate against the Nonabled, banning discriminatory interview questions such as "Do you have any goals for the future?" or "Do you have any skills or experience which relate to this job?" and "Are you awake?"

"As a Nonabled person, I can't be expected to keep up with people who have something going for them"" said Mary Lou Gertz, who lost her position as a lug-nut twister at the GM plant in Flint, MI due to her lack of notable job skills. "This new law should really help people like me." With the passage of this bill, Gertz and millions of other untalented citizens can finally see a light at the end of the tunnel.



Previous Day's Trading Room Results:

Trade Date: 2/18/09

E-Mini S&P Trades*
(before fees and commissions):


1) VA buy @ 8:40am at 789.00 = b/e (1 lot)

2) OTF sell @ 10:15am at 787.50 = -2.00 (1 lot)

3) 80% buy @ 10:30am at 789.25 = +3.00 (1 lot)

4) OTF buy @ 11:30am at 789.25 = -2.00 (1 lot)

5) OTF buy @ 2:30pm at 784.00 = b/e (1 lot)

6) Algorithm positions (3)...combined SofT and Algo total...-4.25


Electronic (YM) Mini-Dow:


1) No trades today



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