Santelli misses mark with rant

CNBC reporter Rick Santelli had a small meltdown the other day on live television after the Obama administration released their plan to help struggling homeowners. I think he was way off base and looked a little foolish. The big picture blog talked about today about an article in playboy that said the entire rant and subsequent opening of the Chicago tea party website may have all been staged. I don't know if it was but it definitely seemed out of character for Santelli. He ususally has a lot of very insightful things to say.

I was very surprised by Santelli's remarks even though it never surprises me when someone says something that seems so purposefully antagonistic. The other thing that blows me away is how simple minded some of these “bright” people seem to be regarding the economy or the state of housing. The plan Obama put out was a complete PR Stunt and if saving a few dollars a month will be the deciding factor for a family to stay in a home that is 150,000 under water so be it. The reality is that we have people that are now in trouble with their mortgages because of job loss or other significant factors that may or may not include being a loser. This was never a subprime crisis regardless of how dizzy cnbc was from spinning so hard last year. It was an issue deeply rooted in the financial paper and credit default swap markets. There is no way a minute number of foreclosures could bring down the entire world financial system if these derivative products were not involved. I am sick and tired of hearing anyone try, including santelli, to blame this crisis on a few homeowners who tried to scam the system. It will happen again and people will try to flip homes and get short term mortgages etc etc in order to get ahead but it could never take down the world economy without the crafting of Wall Street. By blanketing the entire group of people who may be having trouble keeping their homes as losers santelli is being foolish to say the least. He would be more accurate to call the Wall Street bankers and financial “geniuses” losers. They are the ones that have been leeching and sucking off the government now for two years as if they have the right to claim tax payer money as their own. It is idiotic to think this PR stunt by the government will really help anyone without significant principal write downs. By the time someone jumps through all the guidelines and hoops required they could be another 20 or 30 k in the hole. I am all for free markets and personal responsibility and think there are people that have tried to game the system. However, the vast majority of homeowners are not losers. Mortgages are still being paid on time by well over 90% of the people in the country. The individual homeowner has been used as a whipping post in order to let the banks and brokers milk the system for 2 more years while try to keep people from realizing they have to make a very important financial decision with their real estate. When values were down 15% the case could be made that is it much more valuable to keep the home and your credit in tact rather than walk away. However, the story is not the same when people are 35-45% or more underwater. The home can become an albatross around someone’s neck and the financially prudent thing to do would be to walk away if something drastic isn’t done with the principal. I would imagine there are many bright, successful, hardworking winners out there that may have to make just such a decision if we continue to see falling prices. (Which is not out of the question if we keep letting the big banks yank the chain of government whenever they need capital)? Can any financial adviser actually look a homeowner straight in the eye and say although your home is 50% underwater, you will be paying mostly interest over the next 10 years with little principal reduction, your 20% down payment is wiped out, and the economy is crap, and the government seems set on bailing out big banks while housing prices tank, but all that being said, you should go right no paying your mortgage and hope your home goes up 150% in the next 10 years in order to get you back to even? I highly doubt anyone with integrity could tell their clients that this sounds like a good idea. Santelli says some great things on air but this wasn’t one of them.

Time for Ryanair to close it doors

Here is the new stress test for Airlines. We are having a special stress test for the financial institutions so I thought maybe we should have one for the airline industry as well. Ryanair evidently is having so much difficulty getting their bills paid on ticket sales that they have decide to give a new meaning to term a la carte. A la carte is the polite way to say your ticket includes nothing but a seat belt and a seat cushion. If you want to bring an extra bag you pay, if you want a soda, you pay. I know that doesn't seem so bad but this is where we have to draw the line: Ryanair announced today that it is considering charging people to use the bathroom on the plane. I know it is sad but true. I am sure they will find a way to have everyone have to board the planes even earlier now in order to increase revenue. (just kidding). All kidding aside if you can't get enough passenger by including the cost of using the bathroom on the plane it is time for you to just land the planes, send them to the hangers and shut the doors.

GE cuts Dividend

Evidently integrity is now on the chopping block for some of the largest firms in America. GE cut its dividend today and the stock sold off sharply. The dividend should have been cut a long time ago when GE was first stung by the credit crisis. Immelt the CEO of GE has been saying for several months that their dividend was fine and that he would not have make the cut. On many occasions he was given the opportunity to come clean and start to take back his previous statements but each time he held the line while refusing to even consider that in this difficult financial climate drastic measures may have to happen to weather the storm. I don't know if he was just trying to mislead the public or whether he just didn't understand the company financial situation. If we can't trust the CEO to give straight answers about their companies it is going to be very difficult to get people to put faith back into investing for the long term. It is as if the CEO's think they are too smart for the common man or too arrogant to think they have to come clean about their companies in order to bring back investors. It is a sad state of affairs and the government showed us all today that they are ready to do exactly nothing about the situation as they allow citi to vaporize more tax dollars.

For some reason the administration thinks that it is OK to prop up these companies and pummel share holders whenever they decide to dilute share holders at any time. The massive loss of wealth is staggering and the current administration seems to think it is fine as the "change" is becoming business as usual. We allow the ceo's to lie to shareholders without recourse. At this rate their will be no investment income left to tax which will lead to more taxes on everything else. The massive amounts of money wasted on the financial institutions while allowing the CEO to all stay in place is having a drastic effect on investor confidence.

We will be the second coming of Japan if the administration does not clean up the financial system.

Citi gets bigger bailout as administration shows their hand

Sounds like a great plan to save the financial system. Lets just give more money to these banks and let them turn it to vapor and then give them more, and let them turn it to vapor, and then do it all over again. And of course never make any of the banks write down the principal of any mortgages event though they are worthless on the open market right now. Lets just give them more and more money until the market comes around so by the criminals that got into this mess will be able to collect a few more billion in interest on the assets that at present time worth pennies on the dollar. Nice plan. I am so sick of hearing all the bs from the bank "brilliant minds" and the "best and the brightest" in Washington try to convince the public that they had nothing to do with the current meltdown. Citi is milking us for every penny and it is still making vapor out of our money.....what about the rest of the economy and the people that have had their home values vaporized not from 2007 but people who bought in 2003 are now have equity turn to vapor. They are not speculators or flippers but some how the "change" that came to Washington is in favor of letting the banks survive another day so they can eventually collect full value on all their assets....even if it takes a few more billion. I have had it with money give aways to the banks.....it is a complete redistribution of wealth or vaporizing of it from our tax dollars to walls street. It is absurd

ok we have heard your excuses

you can only blame the previous administration for so long and still sound credible.....The markets and the economy have had Obama since nov 2008 and he has had since november to get plans together to do something other than pass a stimulus bill and say it will be worse before it gets better....Nothing has improved since november and we have had a virtual meltdown of the economy and banking system. I am all for being on the same side and working to make things better but I haven't seen anything yet that has given me confidence or made any sense economically.

LIES ON HOUSING AND BANKING FROM THE GOVERNMENT AND BANKERS

It is complete fabrication by the banks and the governments that we can’t live with out citi bank or bank of America. The “brilliant” minds are to afraid to reveal the truth that these banks have run themselves into the ground and now are just trying to keep bad loans long enough to force the taxpayer to bail them out. It is complete scam. You meant to tell me they can all fly private jets, have huge corporate parties and not be able to set aside a few dollars for their own bad loans????? Why would they when the government will force the tax payer to make up for any of their terrible banking practices. ?

Now the banks are failing but they are still set on collecting all the interest they can milk out of every homeowner while fleecing the American taxpayer. I am so sick and tired of hearing these geniuses say that we have to save the banks. NO WE DON’T!!! There are plenty of banks that will survive and be glad to handle the business. How can you save the banks and leave homeowners underwater with no recourse but to keep paying interest. ????? It is bad enough that money is being funneled into all the banks but to then leave the homeowner to suffer under a 30 or 40 % decline due to the failures in the banking and insurance industry. This is the core issue. The banks didn’t plan for falling collateral prices and the insurance companies didn’t plan for defaults and could not afford to cover the losses even though they had collected a fee for the insurance. Why is the homeowner left with a face value mortgage when the collateral is well underwater? The bank willing took that property as collateral and believed as much as anyone that it would hold its value. Well they were wrong so why now are they getting propped up by the government and the homeowner left with the balance of an underwater mortgage?

I don’t want to hear another word from some talking head about contract law. The obligations of contract law are out the window when your company fails and the government steps in to save you. The crux of this issue is that banks are now willing to do their proper accounting and write down the loans because they feel some sense of entitlement to collect full principal and interest payments even though they collateral they willing accepted and endorsed is now well below the mortgage value. The banks are staring down the government and the tax payer and out sissies in Washington caved without doing what was right for the American people. Before one penny was issue to save these worthless banks the children in the congress should have stood up and said fine here is the cash but now you have to write down all the paper on these mortgages to less than current appraised value. But no they had to let the banks act like 2 year old demanding their way and they let them have their sucker.

IF WE WOULD MAKE THE BANKS TAKE A HIT ON THE MORTGAGES AND TAKE SOME RESPONSIBILITY FOR BEING AS WRONG AS EVERYONE ELSE ABOUT THE DIRECTION OF REAL ESTATE VALUES THEN MAYBE THEY WOULD BE A LITTLE MORE PRUDENT WHEN THEY DID THEIR LOANS IN THE FUTURE. REGARDS OF WHATEVER MO MONEY OBAMA SAYS, HE IS LETTING THE BANKS WALK ALL OVER THE USA. HE HAS NOT OFFERED ANY REASONABLE RELIEF TO THE HOUSING PROBLEMS. MAYBE BECAUSE HE IS ANOTHER “BRILLIANT” MIND FROM HARVARD LAW SCHOOL THAT IS STUCK ON THE IDEA THAT CONTRACT LAW IS WRITTEN IN STONE.

WHO KNOWS WHAT WE WILL GET IN THE FUTURE? WE HAVE WAY TOO MANY “BRILLIANT’ MIND LAWYERS IN WASHINGTON AND WAY TOO MANY BRILLIANT MIND CEO S ON WALL STREET. IF I RECALL THESE ARE THE SAME ‘BRILLIANT’ MINDS THAT WERE ALL WORKING IN OFFICE WHEN THIS CRISIS BEGAN. OBAMA CAN SAY HE INHERITED THESE PROBLEMS BUT HE WAS A SENATOR AND HOLDING OFFICE. I DON’T RECALL HIM SOUNDING THE WARNING BELL OR TAKING A STAND AGAINST CORPORATE EXCESSES.

IT DOESN’T MATTER WHAT PARTY WE ARE TALKING ABOUT BUT WE HAVE A HORRIBLE BUNCH OF LEADERS IN THE CONGRESS. THEY BEHAVE LIKE CHILDREN AND PRETEND THEY ARE DOING WHAT IS RIGHT WHEN ALL OF THEIR POSTURING IS FOR ONE THING AND ONE THING ONLY: TO BE RE ELECTED TO THE CUSHY OVER PAID, OVER COMPENSATED SEAT IN THE HOUSE OR SENATE.

obligated to pay forever regardless of the value of the collateral...This is just a phony way for the banks to make sure they get to collect as much interest as possible even when they took the home as collateral and it is now down 50 %. If we sold the home to someone we would be out 50 % and the government wouldn't save us like they are saving the banks....It is a lie that we can't live without all of these banks....it is a lie by the head of state and heads of banks

Bringing up BAD BANK AGAIN

completely ridiculous

Sounds like the fed may still not have a real plan as to what to do about our financial system. Regardless of what they decide to do or come up with several different plans the tax payer is on the hook now and will continue to be put on the hook for more and more until the banks are forced to priced their bad assets to the market and either survive or go under. Citi already is back for more funds and the government is actually listening. How absurd is this picture. The bank can't sustain itself and we are continuing to prop it up expecting these toxic assets to suddenly become saleable.

Gold play and dollar days

I think the dollar has had a run simply because it is the best of the worst right now and gold is working as more of safe haven against deflation rather than safety against inflation....unusual events for unusual times.....I would assume some where down the road inflation may kick in, treasuries go down, and gold then works as hedge against inflation.....Makes me wonder if this run in gold may have legs or might have support as inflation kicks in.....maybe year , 2 or three...but there could be early players just willing to wait it out in gold now betting on inflation later.

What a load of .............. It isn't hard to modify mortgages or change them. The government has changed the rules by bailing out the banks and giving the "biggest and brightest" billions of dollars so they wouldn't have to pay for their terrible forecasting. The banks are underwater much more than any homeowner and government basically owns the banks. All they have to do is get new appraisals with a few of the billions they are wasting and tell the banks to reduce the loans. The longer they drag this out the more difficult it will be as prices continue to fall and banks fail more rapidly. Cut the crap about this being delicate and complicated and quit pandering to the people who have run the system into the ground and move on. It is clear the banks are still in it for themselves and can't get themselves out of this mess or they would be pillaging anyone they could for more profit. I am all for free market and taking pain as an investors but when government bails out banks there is no such thing as free market. It is a completely joke when the treasury secretary says they don't want to nationalize the banks. We give them billions and then let them squander it just like they did with their billions of profits from the previous years and expect things to change. It is a complete joke and I hope the American people are realizing that it is not as complicated as Wall street and the government pretends it to be in order to keep us all from realizing we all just go "pants" by the banking and financial system.

Mark to Market chatter

Congress is talking about changing Mark to Market rules for the banking system. (mark to market means that assets are given the same value as other similar assets.) In today's market their are billions of dollars of bank assets that no one wants to buy at any price. There is no way to price these assets any anything much over zero. The alternative to Mark to Market is mark to model. The bank would be allowed to speculate as to the current and future value of a mortgage or an asset based on their opinion or estimation of the quality of the borrower or the asset.

The mark to model allows banks and bankers to get away with pushing potential losses out to future years and in turn can make current earnings look far better then they appear to be using Mark-to-market. For years banks were able to cloud their true earnings or true value of assets by using mark to model. The congress is only talking about mark to model again because they see no way out of the financial crisis if they accurately price the current bank assets. Imagine you wanted to sell your house and decided that it would be worth 100,000 more in 10 years and then expected to be paid that price today. Mark to model is similar to this and is nosensical. It will be the biggest scam of the American tax payer if the government guarantees or buy these toxic assets held by banks at any other price than current value.

Wall Street Bonuses

Yes of course wall street couldn’t survive without the biggest and brightest minds who have done so well the past few years. Who cares if these “geniuses” leave? Obviously they massive bonus pay has not deterred executives from running their companies into the ground or from helping drive the economy off a cliff. How could we live with out them?