Comments on: The stealth bailout, illustrated, in close to real time http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/ Sat, 21 Nov 2009 16:40:10 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: solve Reverse Mortgage Problems http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-134439 solve Reverse Mortgage Problems Sun, 06 Sep 2009 22:11:50 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-134439 <strong>solve Reverse Mortgage Problems...</strong> The Housing Bubble Blog " Bits Bucket For August 22, 2009 is an excellent post on solve Reverse Mortgage Problems.... solve Reverse Mortgage Problems…

The Housing Bubble Blog ” Bits Bucket For August 22, 2009 is an excellent post on solve Reverse Mortgage Problems….

]]> By: RebelEconomist http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112476 RebelEconomist Thu, 11 Sep 2008 17:36:57 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112476 Martino, Good question. I think the answer is about 55%. The New York Times reported (eg http://www.nytimes.com/2008/09/07/business/07fannie.html) that Fannie and Freddie have $5.3tn of outstanding debt that they have either issued themselves or guaranteed, while the US national debt (see http://www.brillig.com/debt_clock/) is about $9.7tn (including social security liabilities). There is some question, however, about whether what the government has done actually amounts to guaranteeing the agencies' debt, since they have not committed to putting in more than $100bn of capital into each agency. Martino,

Good question. I think the answer is about 55%. The New York Times reported (eg http://www.nytimes.com/2008/09/07/business/07fannie.html) that Fannie and Freddie have $5.3tn of outstanding debt that they have either issued themselves or guaranteed, while the US national debt (see http://www.brillig.com/debt_clock/) is about $9.7tn (including social security liabilities). There is some question, however, about whether what the government has done actually amounts to guaranteeing the agencies’ debt, since they have not committed to putting in more than $100bn of capital into each agency.

]]> By: Sam http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112448 Sam Wed, 10 Sep 2008 18:08:09 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112448 Can we all just admit that Dave Chiang and China are infallible and always right and then we can focus what is germane to BS topic at hand. I feel that comment sections should pose serious questions and dialogue instead of just inflammatory, ignorant rubbish and borrowed ideas and URL's. From a markets standpoint, the movement in the dollar is nothing short of amazing since the announcement. There seems to be a massive squeeze on USD shorts going on, and I'm not sure whether this is structural or short-term. How many foreign companies borrowed/issued in USD? How many Chinese exporters played the over/underinvoicing game? How many multinationals underhedged dollar liabilities/risk? The market reaction is often more important than the news itself, and it's very telling this week. Can we all just admit that Dave Chiang and China are infallible and always right and then we can focus what is germane to BS topic at hand. I feel that comment sections should pose serious questions and dialogue instead of just inflammatory, ignorant rubbish and borrowed ideas and URL’s.

From a markets standpoint, the movement in the dollar is nothing short of amazing since the announcement. There seems to be a massive squeeze on USD shorts going on, and I’m not sure whether this is structural or short-term. How many foreign companies borrowed/issued in USD? How many Chinese exporters played the over/underinvoicing game? How many multinationals underhedged dollar liabilities/risk? The market reaction is often more important than the news itself, and it’s very telling this week.

]]> By: martino http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112439 martino Wed, 10 Sep 2008 08:26:32 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112439 A question that I don't see asked around, but crucial: How much will tjhe national debt grow, thankls to GSE bailout? A question that I don’t see asked around, but crucial:
How much will tjhe national debt grow, thankls to GSE bailout?

]]> By: FG http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112435 FG Wed, 10 Sep 2008 01:57:37 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112435 2Fish: if Joe Sixpack is able to borrow large amounts of money, buy an overpriced house and then have that loan inflate away, he ends up ahead. I'm a first time buyer. I'll just rent until the Chinese had enough. They helped the bubble inflate, maybe they can help it deflate. Like the above comment from KnotRP, I don't believe there is actually inflation, not in wages. I don't want to go in debt for 30 years and renounce to retirement just to buy a crappy condo. And Comrade Paulson can dance a Polka if he wants, I don't care. 2Fish: if Joe Sixpack is able to borrow large amounts of money, buy an overpriced house and then have that loan inflate away, he ends up ahead.

I’m a first time buyer. I’ll just rent until the Chinese had enough. They helped the bubble inflate, maybe they can help it deflate.

Like the above comment from KnotRP, I don’t believe there is actually inflation, not in wages. I don’t want to go in debt for 30 years and renounce to retirement just to buy a crappy condo. And Comrade Paulson can dance a Polka if he wants, I don’t care.

]]> By: Curious http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112433 Curious Wed, 10 Sep 2008 00:55:56 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112433 Is this some guy impersonating Yves Smith? http://blownmortgage.com/2007/10/30/yves-smith-of-naked-capitalism-interview/?disqus_reply=2254129#comment-2254129 Is this some guy impersonating Yves Smith?

http://blownmortgage.com/2007/10/30/yves-smith-of-naked-capitalism-interview/?disqus_reply=2254129#comment-2254129

]]> By: KnotRP http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112427 KnotRP Wed, 10 Sep 2008 00:01:36 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112427 ...in other words, your income won't allow you to feed at the devaluation trough. If that's true of enough people, home prices will crater in nominal terms, instead of just real terms. Ultimately, the US economy is built on the consumer's earning power....which no one is paying any attention to …in other words, your income won’t allow you to feed at the devaluation trough.

If that’s true of enough people, home prices will crater in nominal terms, instead of just real terms.

Ultimately, the US economy is built on the consumer’s earning power….which no one
is paying any attention to

]]> By: KnotRP http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112426 KnotRP Tue, 09 Sep 2008 23:59:10 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112426 > And if Joe Sixpack is able to borrow large > amounts of money, buy an overpriced house > and then have that loan inflate away, he ends up > ahead. This is what happened in the 1970’s. 1970s had real wages rising to pay off the original debt, which is unlike now. With 2 billion new laborers, real wages won't climb fast enough.....so....if you can keep up with your house payments as currently structured, you might be able to hold on through a dollar devaluation....but if you cannot keep up with your house payments now (because you overpaid, and eventually your motgage resets to the real payment schedule), or you lose your job (outsourcing, recession, ...) then you will get to pay in cheaper dollars, but you still won't have enough income to afford the overpriced home. > And if Joe Sixpack is able to borrow large
> amounts of money, buy an overpriced house
> and then have that loan inflate away, he ends up
> ahead. This is what happened in the 1970’s.

1970s had real wages rising to pay off the original debt, which is unlike now.

With 2 billion new laborers, real wages won’t climb fast enough…..so….if you can keep up with your house payments as currently structured, you might be able to hold on through a dollar devaluation….but if you cannot keep up with your house payments now (because you overpaid, and eventually your motgage resets to the real payment schedule), or you lose your job (outsourcing, recession, …) then you will get to pay in cheaper dollars, but you still won’t have enough income to afford the overpriced home.

]]> By: Cedric Regula http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112423 Cedric Regula Tue, 09 Sep 2008 22:40:26 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112423 I still think you do it like corporate planning, and now, or 5 years ago, was a good time to start because it does take time. But we have the same problems here when things get complicated...like energy self sufficiency, and all those other good things managed by the health, education and welfare dept. I still think you do it like corporate planning, and now, or 5 years ago, was a good time to start because it does take time.

But we have the same problems here when things get complicated…like energy self sufficiency, and all those other good things managed by the health, education and welfare dept.

]]> By: Twofish http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112422 Twofish Tue, 09 Sep 2008 22:40:10 +0000 http://blogs.cfr.org/setser/2008/09/08/the-stealth-bailout-illustrated-in-close-to-real-time/#comment-112422 Another question for DC.... The Chinese government consists of different groups of people who want different things. Right now the government seems to think that it should appreciate the RMB, and you seem to agree. Question: Suppose a month from now, they change their mind, and decide to rapidly appreciate the RMB, are you at that point going to argue that they are wrong? Also, the RMB freeze is at the end of two to three years in which the RMB has risen 20%. Since you believe in a pegged currency, do you think that the Chinese government made a mistake in revaluing the RMB as much as it has? Another question for DC….

The Chinese government consists of different groups of people who want different things. Right now the government seems to think that it should appreciate the RMB, and you seem to agree.

Question: Suppose a month from now, they change their mind, and decide to rapidly appreciate the RMB, are you at that point going to argue that they are wrong?

Also, the RMB freeze is at the end of two to three years in which the RMB has risen 20%. Since you believe in a pegged currency, do you think that the Chinese government made a mistake in revaluing the RMB as much as it has?

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