Rick Santelli: "How many of you people want to pay for your neighbor's mortgage, that has an extra bathroom, and can't pay their bills? Raise your hand!"
Update: CNBC is conducting an online poll based on this video. You can vote here.
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Reminds me of Kramer's rant 18 months ago about how the fed was clueless and needs to step in. We all know what happened next.
ReplyDeleteInteresting to plot things like this as benchmarks/ possible counter indicators. Kramer says "govt step in", everything craps out 8 months later. Santelli says "govt get out"...
I agree with him completely. What our government is doing is insane. I never thought we'd see it, but we clearly have the lunatics running asylum.
ReplyDeleteThe lunatics are running the asylum, huh? It was 8 years of republican rule with greenspan denying the existence of a housing bubble as cut interest rates and congress and executive agencies removing regulatory restriction across the financial sector that, along with other factors, brought about this bubble and crash.
ReplyDeleteNow that the adults are in charge, aka obama and his economic team, there's tough medicine to take. Sure its unfair to those of us who didn't buy houses we couldn't afford. Yeah, it pisses me off. But its also what I think needs to be done. The forecloser rate has to be brought down to help stabilize the economy. Now, banks and homeowners should be forced to eat a large part of the losses but we need to keep people in their houses. The alternative is countless wasted empty houses and bankrupt and/or homeless families. Now, maybe the Obama plan isn't the best way to accomplish this. That's debatable by people with more experience in the nuts and bolts of the mortgage/housing industry. But any special help for people who made bad financial decisions is unfair to the rest of us. But suck it up, cause grownups have to deal with unfairness. This isn't kindergarten its the real world and we have to clean up the mess that the supply-side, Ayn Rand loving, anti-regulatory republican idiots left behind. Too bad we don't have the budget surplus Clinton left behind when he finished his last term.
But everything is going to go back to normal. Really.
ReplyDeleteAnonymous said...
ReplyDelete"Now, banks and homeowners should be forced to eat a large part of the losses but we need to keep people in their houses."
I was kicked out of my home during the upside of the bubble so my apartment building could be converted to condos, so I have no sympathy for people getting kicked out of their home because they bought more house than they could afford. Why should we have a double standard? And quite frankly, they won't become homeless. They will rent, just like most of this blog's readers.
this sh*ts blowing up like tnt. aint nothing stopping the correction. the "adults" are finally going to have that uncomfortable conversation with bondholders about getting a haircut. boy i wish i could be a fly on the wall when Bill Gross asks why he can't profit off moral hazard anymore.
ReplyDeleteLance should put up his own rant where he begs Obama to find some way to prop up his house's value.
ReplyDelete"It was 8 years of republican rule with greenspan denying the existence of a housing bubble as cut interest rates and congress and executive agencies removing regulatory restriction across the financial sector that, along with other factors, brought about this bubble and crash."
ReplyDeleteWhy don't you try to leave politics out of this. What's important is what we do going forward. Socialization is not what created the American Dream. What ever happened to personal responsibility. My 401K is down 40%...who is going to bail me out? I didn't even make a bad decision like the home owners did since EVERYTHING is down. "Adults" now running the country....?? They have no clue what they are doing. Heaven help us.
""Adults" now running the country....?? They have no clue what they are doing. Heaven help us."
ReplyDeleteYou think the republicans would know what to do? Perhaps prevention would have suited it best....but thats thinking like an "adult".
"Socialization is not what created the American Dream. What ever happened to personal responsibility."
Nobody has "personal responsibility" without rules in check. You need laws to keep people following them. When the speed limit for home loans go away, there are going to be lots of accidents....now we need a sh*tload of ambulances to clean up the mess.
Anyway, Im all for the housing market to crash. Im a renter. However, neither republicans nor democrats "know what to do". Dont fool yourself.
"My 401K is down 40%...who is going to bail me out? I didn't even make a bad decision like the home owners did "
ReplyDeleteThank you for your honesty.
My 401(k) total is down about 5% from the peak but that's because I shifted to "guaranteed interest" accounts about a year ago when I saw valuations falling.
My house is down about 2% from the 2006 peak but my place, like Lance's, is close in.
The recession, housing bubble, stock market collapse, has not affected me.
"This isn't kindergarten its the real world and we have to clean up the mess that the supply-side, Ayn Rand loving, anti-regulatory republican idiots left behind. Too bad we don't have the budget surplus Clinton left behind when he finished his last term."
ReplyDeleteHaha, riiiiight. So you must think that FHS loans, Fannie and Freddie, the FED, and now the bailout of failing companies constitutes a "free and open" market. The government had a part in getting us into the mess, and now it is bailing out everyone else who had a hand (unwise buyers, and the idiot banks that lent them money). Keep using the cliche -- "see that's what lack of big government intervention does". It's quite comical to hear it over and over again.
It's ok though. I can tell by your comment that you are a crazy liberal. You're using the standard "we'll at least Clinton was better than Bush" defense. Guess what? -- NO ONE CARES that a giant douche is better than a turd sandwich. Oh, and you better rethink what really got us into this financial mess.
"Oh, and you better rethink what really got us into this financial mess."
ReplyDeleteOH Please tell us Rush Limbaugh!!!
"Anon said...
ReplyDeleteOH Please tell us Rush Limbaugh!!!"
Anon at 1:00 PM. If I am reading Anon at 10:30 correctly, he is comparing Bush to a turd sandwich. How does that make him Rush Limbaugh?
Everyone, including the most staunch rightwingers, compare Bush to a turd sandwich.
ReplyDeleteIm still waiting for Limbaugh's great advice on why we got in this mess.
"Everyone, including the most staunch rightwingers, compare Bush to a turd sandwich."
ReplyDeleteSorry umm no they dont. Ultra hard core right wingers still love dubya - they think in time - decades from now, prople will look back on what he did as correct - a modern day Abraham Lincoln if you will. None of these myopic types compare him to a turd sandwich.
I too look forward to hearing from anon @ 10:30 to get his take on who is responsible. However, I think he is more of a "a pox on both their houses" type than he is a "Rush Limbaugh".
I'm a crazy liberal, huh? No, I'm a sane realist. In fact, I have a BS in engineering and and MBA. I'm the ultimate pragmatist and actually have some real knowledge of finance, economics and mathematics.
ReplyDeleteMoving on, Fannie and Freddie were not the cause of our current problems, though they did play some part. The real problems lay in the private sector with lack of oversight, over leveraging, bad incentives for people working in the financial sector, and a complete failure of risk analysis by bond ratings agencies and banks. And your idiotic comment saying Bush and Clinton are equivalent on economic policy performance is so non-sensical I can hardly respond. We went from the longest, largest period of economic growth in decades under Clinton to the worst financial crash and recession under Bush. The difference couldn't be any more stark, but fools like you refuse to live in reality.
And as for "leaving politics out" of the discussion, that's completely ridiculous. Politics an political ideology define how we manage our economy. The 2 main political parties in the US have completely different, opposing economic philosophies. The republican philosophy and party has been an economic failure over the past 8 years. If you look at historical GDP growth during modern democratic and republican administrations, its vastly better under democrats. If you leave out politics, you miss the whole point.
Anon (this is anon at 2:36). I generally come down on your side of things. I will say however, I think you are overestimating the ability of either party to do anything about this.
ReplyDeleteIn all honesty, I blame London far more than Wall St. They were the true pioneers on the derivatives front - really they overtook Wall St. as the financial capital of the world in the mid decade.
The derivatives market is pretty much completely unregulated and seeing as much of it came from overseas, outside of the usual scope of the US ability to enforce, regulate, etc.
Imagine too, what if the dems or repubs tried to regulate it? Had we tried to do something to the CDS market before this had blown up, imagine the response - you are stifiling innovation! Big gubbamint solves nothing. No chance we would have gotten away with regulating it from day 1 even though in hindsight, we should have.
Still its only in hindsight we know this. We have taken a hands off approach to regulating the internet - turns out it works out well when left to its own devices. However, if there is some wordwide, systematic attack on world records, I can assure you there will again be calls of "why didnt we regulate this thing" This is the fault of Bush or Clinton admin, etc...
Hate to say it, but sometimes, bad shit just happens and its only in hindsight we can say coulda woulda shoulda
I agree that the derivative markets should have been more regulated, but disagree that it could only be seen in hindsight. There were many people saying it needed to be regulated, but it was not done. And the explosion of derivatives, CDO's, MBS's and leverage exploded in the last decade, during a period when deregulators (aka, republicans) controlled the federal government. Greenspan denied the existence of the bubble (and fed it)till the bitter end and then basically said in front of congress that he was blinded by his own ideology. But its not the existence of derivative that's the problem. They are useful financial instruments. Its the lack of oversight, transparency and realistic risk analysis.
ReplyDeleteWhat happened to 20% down payment?
ReplyDeleteWe wouldn't had the bubble because the unscrupulous realtors and mortgage lenders could not have gotten away with all these people in homes they had no way of paying for. The builders would not be hurt that bad; they would have been building apts. for them to live in instead of houses and we wouldn't have this mess.
Anon 3:54
ReplyDeleteI'm not questioning your intelligence, I'm questioning your objectivity. Your original post starting ranting about how republicans and ayn rand were wrong. Objective people DON'T do that. I always see this from people who are firm dems or reps. Their arguments immediately invoke the claim that, "we'll at least we're better than the other side". That's my point. They both SUCK.
If Bill Clinton's economic policies were so good, why did he have THE SAME PERSON running the US economy as GW Bush did?
The problem is The Fed. They do a bad job managing the economy. The market should run the economy. How did Clinton do with the Dot-com bubble? How about Bush and Congress with the current mess? It never ends.
"I agree that the derivative markets should have been more regulated, but disagree that it could only be seen in hindsight. There were many people saying it needed to be regulated, but it was not done."
ReplyDeleteIf the internet gets hit with some weird attack that wipes out all financial records, you are going to hear the same thing - we shouldnt have let this happen - we should have regulated the thing.
Yes there are those who called for regulation for derivatives early on, just like there are people for regulating everything. However, there were not enought of them to create a consensus when it came to derivatives.
Point is. Its inherently tough to get some to voluntarily agree to regulation before they have done something wrong - its just a shame that their being wrong in this case had to wreck the whole economy.
Questioning my objectivity because I agree with one side strongly is silly. Taking sides is part of debate. My position is based on the evidence. Saying "both sides suck" is a cop out. There are 2 clear economic ideologies in play. I believe one is wrong. I also believe intelligent design advocates are very wrong and suporters of evolution are very clearly correct. Its not because one argument is made by republicans and one by democrats. In fact its quite the opposite. I was a long time republican until they party became more and more divorced from science, logic and reality. They consistently take the wrong side of every important policy issue. Sure, both sides have problems and corruption etc. That applies to every group from churches to corporations to political parties and unions. But one is much worse. Pick a side, be honest about it or why even be a part of the debate. Its not about bipartisanship, its about what is actually correct.
ReplyDeleteAlso, I agree the Fed was a part of the problem. But the Fed under greenspan was part of the supply side, deregulatory ideology. But its not the Fed itself. Its the Fed poorly managed. Interest rates were too low to long.
ReplyDeleteAs for the dot com bubble, it was relatively short lived and the crash predicted pretty widely. But that was a basically a private stock.equity bubble which had very different causes. It was, as Keynes said, animal spirits. There wasn't fraud or overleverage or trillions in shadow banking risk. It was just people over bidding stock. It couldn't be regulated away in any reasonably acceptable way. To make it equivalent to the housing bubble would mean having millions of people take out trillions in unsecured loans to buy the stock on margin. This did not happen because that kind of leveraging is regulated.
Good Lord...if all of you think you're so damn smart, could you at least stop posting as "anonymous"?
ReplyDeleteI took Santelli's advice and created an online vote about Santelli and his comments about homeowners getting bailouts and financial advice from CNBC. You can take the poll at http://www.pollpub.com/is-rick-santelli-a-callous-jerk-for-his-comments-about-homeowners-getting-bailouts.aspx
ReplyDeleteHey Rick, are you listening?
Peter said...
ReplyDelete"I took Santelli's advice and created an online vote about Santelli and his comments about homeowners getting bailouts..."
Your poll is bogus. You're poisoning the well. As one of your poll options, how about adding "Santelli's right. I'm a renter and I shouldn't have to bail out homeowners."
Peter, you're the callous jerk for wanting renters to bail out homeowners. Why not just ask the poor to bail out the rich?