[TheDude]

My take home lesson: the economics Doomers went to bat first, like roccman here or Stoneleigh/Ilargi at TOD and Automatic Earth. What seemed like more outrageous hyperbole is coming to pass. Whether the out there statements from the likes of Savinar or Jack come to visit us we can only wait and see...

$this->bbcode_second_pass_quote('Stoneleigh', 'R')elative values of currencies will depend on which currency is deflating most quickly. The only ones I would hazard a prediction on are the US dollar (a temporary rise, possibly quite sharp), the Canadian dollar (a fall as the Albertan energy economy falls flat on its face), the yen (a sharp and sustained rise as the carry trade unwinds), antipodean currencies (a fall as the yen carry trade that supported them unwinds) and the euro (a substantial fall as economic disparities in Europe wreak havoc with European unity).

Supporting currencies through the central banking system is a recipe for losing vast sums of money at times of great upheaval, when the power of the collective demonstrates how little power central bankers actually have to stand against forces of nature.I don't expect any attempted intervention to make any practical difference, except perhaps to make matters worse by wasting scarce resources by throwing good money after bad.

[Plantagenet]

For 700 billion the US could repair all the interstate highway bridges or build a high speed electric train line between LA and New York.

Instead, the Congress is going to spend the money on bad paper.

[Tyler_JC]

To be fair, we are purchasing assets with the 700 billion and these assets have at least some value.

We are probably going to spend $700 billion to buy assets worth $350 billion.

That's still a huge loss and several times larger than the RTC mess.

But the bailout isn't going to work. It doesn't fix the fundamental problem, namely, falling house prices.

If house prices do not stabilize, and they can't if people can't get mortgages, then the hole will keep getting worse and worse.

[mos6507]

$this->bbcode_second_pass_quote('smallpoxgirl', '
')Then they started two pointless wars.

[virgincrude]

Tyler_JC: $this->bbcode_second_pass_quote('', 'T')o be fair, we are purchasing assets with the 700 billion and these assets have at least some value.

[Tyler_JC]

$this->bbcode_second_pass_quote('virgincrude', 'T')yler_JC: $this->bbcode_second_pass_quote('', 'T')o be fair, we are purchasing assets with the 700 billion and these assets have at least some value.

[BigTex]

It's amazing how quickly the conventional wisdom has changed from

"house prices always go up"

to

"house prices are going to keep falling and eventually every house will be worthless and have to be bulldozed at great expense"

I actually can't think of a more intrinsically valuable piece of property than a house, since it's one of the big three that we all need--you know: food, water, shelter.

The fact that housing prices are falling RIGHT NOW just means that they were overpriced, not that they're worthless.

People are talking about housing right now like it was an internet stock from the 1990s. The reality is that a home may lose 50% of its value, but it is very unlikely to lose 90% of its value.

[virgincrude]

Tyler J_C: $this->bbcode_second_pass_quote('', 'T')he bank can take over the house and sell it.

[Turlox]

$this->bbcode_second_pass_quote('BigTex', '
')
People are talking about housing right now like it was an internet stock from the 1990s. The reality is that a home may lose 50% of its value, but it is very unlikely to lose 90% of its value.

[kam3Oen]

$this->bbcode_second_pass_quote('', 'T')he ones located near viable mass transit and a dense city core might maintain and even increase value but most of the housing that has been constructed since 1950 is pretty much worthless except for salvage value of components.

[BigTex]

$this->bbcode_second_pass_quote('Turlox', '')$this->bbcode_second_pass_quote('BigTex', '
')
People are talking about housing right now like it was an internet stock from the 1990s. The reality is that a home may lose 50% of its value, but it is very unlikely to lose 90% of its value.

[jboogy]

As Davep would say "we're living in interesting times". I'm a little surprised that paulson and bernanke asked to become supreme leaders of the free world so brazenly, not surprised shrub fully endorsed the idea. I think they laid the extreme doomsday scenario on the congress chiefs in that meeting.. and it worked.

I heard that Paulson and/or bernanke almost came to blows with Dodd behind closed doors with Dodd saying something like " who the f*ck do you guys think you are?" Am surprised that people have become so energized over this, who'da thunk it? I believe that this bill would have passed by a huge margin if people hadn't raised such a ruckus with their reps.

Wether this proves to be the smart move remains to be seen. If the banks get mad enough then the economy will come to a stop here. No paychecks, no nothing basically. 777 pts. is no joke.

I'll be surprised if the government gets into the real estate business, who is going to show the houses and schedule termite inspections. Will all the unemployed real estate agents do the legwork for an hourly wage or flat fee, you know they're used to 10,000 dollar commissions. I can't see middle aged women going out to show a house at 6:00 pm on a sunday for 10 bucks an hour. Would they get travel time?

[hope_full]

Back in the day, conventional wisdom was that banks (and bankers) did NOT want houses taken back thru foreclosure - if there was any way to avoid it. Foreclosed properties are nothing but a huge nuisance and a financial hole.

In addition to the expenses of sale, there's also maintenance costs (deferred and ongoing), winterizing expenses, taxes, yard maintenance, etc.

For this reason and many more, I really can't imagine the US government making money off all these foreclosed properties.

[GoghGoner]

$this->bbcode_second_pass_quote('TheDude', 'M')y take home lesson: the economics Doomers went to bat first, like roccman here or Stoneleigh/Ilargi at TOD and Automatic Earth. What seemed like more outrageous hyperbole is coming to pass. Whether the out there statements from the likes of Savinar or Jack come to visit us we can only wait and see...

$this->bbcode_second_pass_quote('Stoneleigh', 'R')elative values of currencies will depend on which currency is deflating most quickly. The only ones I would hazard a prediction on are the US dollar (a temporary rise, possibly quite sharp), the Canadian dollar (a fall as the Albertan energy economy falls flat on its face), the yen (a sharp and sustained rise as the carry trade unwinds), antipodean currencies (a fall as the yen carry trade that supported them unwinds) and the euro (a substantial fall as economic disparities in Europe wreak havoc with European unity).

Supporting currencies through the central banking system is a recipe for losing vast sums of money at times of great upheaval, when the power of the collective demonstrates how little power central bankers actually have to stand against forces of nature.I don't expect any attempted intervention to make any practical difference, except perhaps to make matters worse by wasting scarce resources by throwing good money after bad.