US Commando Strike in Waziristan

well, the treasury basically has the power to extend unlimited credit because of the housing bill that congress signed last month and it looks like they're planning to do whatever it takes... in excess of $200 billion, the number just keeps rising.

hamid writes "because his cleaning lady and her husband just managed to get a 450 thousand dollar mortgage ...... "

Hamid sahib, salam and greetings of peace. How goes this fine evening near Detroit? Motor City ok? gas prices falling?, baal bacha? Haal chaal? chai paani?

Your friend just like you have cleaning ladies and sprinkler guys that make over 6 figure salaries or deal in those amounts other than sending their kids to Harvard and what not. Instead of listening to them listen to Marx regarding the crisis that perioically visit capitalism beacuse of the system's internal contradictions. Read some, and learn....

Have a nice day, keep the water sprinkling, and the floors sparkling.....soon your kids will be a heading to Harvard and Yale...

TNI Masadi

Re: # 129

alpha mian,

.... it is going to take more than 50B to 'turn around' the housing market and i don't think it will be a big turn around even then .... hopefully we can stem the slide ... the asset base that you are talking about is probably 50% of what it was on paper a year ago .....

.... a few years ago, when the housing market was at its peak my friend tehsin, who is the biggest slum lord in connecticut and who rears his ugly head on this forum once in a while, told me that he was dumping his real estate because his cleaning lady and her husband just managed to get a 450 thousand dollar mortgage ...... i should have listened to him - sometimes the fool knows what he is talking about ...... many years ago, before the internet bust, i should have dumped all my technology stocks when a seven dollar an hour security guard offered to give me a a 'hot tip' while i was waiting in the lobby of an office building ........ this housing bust was bound to happen - we were all too greedy and foolish to see it coming ........

Re: # 129 Posted by CreateAlpha on September 7, 2008 3:22:42 pm

Alpha,

Agreed with your line of thinking. Looking at from the $14 Trillion dollar economy, this amount seems low. But the issue is not about the size of the bailout, but why should the US govt. be in the real estate business in the first place? In my opinion, they should not.

Fannie and Freddie packages most of the mortgages and sell them to private investors. These days there are not too many private investors buying these chunks of over-valued real estate mortgages. They are waiting in the wings till the day when the price tag on these packages are a lot lower than what is being asked for.

Fannie and Freddie, bought these mortgages from the Banks at high values, and now they have mortgages on their books. They should not be allowed to buy any more of these fuzzy instruments called mortgages, until the market of these over-valued houses (hence these loans) are more in-line to the real world.

More than 90% of the mortgages are being off on time, and the home owners are not going anywhere. They are not the flippers. It is only the crowd who are left out (the so-called future buyers of homes) that would benefit from this bail out.

American tax payers money is being used for the real estate gamblers. Totally and utterly ridiculous.

Rabia, if even $50 billion in guarantees and cash infusion to sure up a balance sheet is required, it is not the end of the world. This is a $14 trillion economy. That is the perspective I am talkng.

Cyclicality of liquidity and ebb anf flow of risk is not the gov't bailiwick. Share price is what it is because access to balance sheet capital for these two psuedo companies has dried up as the investors have bailed.

$25 b in guarantee and capital drops the 30 year mgtge rate, hopefully turns the housing market from the perspective of those on the sidelines and the cycle begins anew. Shareholders who took market risk aren't getting bailed out

There used to be a chowkie who went by the nick romair or something...he told us mushy was THE MAN and after 9/11, all mushy had to do was continue supporting the war on terrorism and it would give pakiland enough economic muscle to continue the jihad in kashmir...he even told us kashmir would be azaad in a decade...

wonder where he's at..


Pakistan could be next big IMF customer

* Citigroup calls weak rupee ‘a legacy of flawed economic policies’
* Sees risk of debt default next year

Daily Times Monitor

LAHORE: A recent report by Citigroup suggests Pakistan as the International Monetary Fund’s (IMF) next big customer, according to a Newsweek report.

According to the magazine, the IMF had seemed on track to permanent downsizing earlier this year, because emerging-market growth had left it without a client base of economically poor nations. However, that might soon change.

Default: The magazine quoted a recent report by Citigroup saying Pakistan could be the IMF’s next big customer. According to the magazine, “the bank sees a big risk of sovereign-debt default next year thanks to a weak rupee (a legacy of flawed economic policies) and higher energy prices�.

“The balance-of-payment situation in energy-dependent countries like Pakistan has deteriorated,� Newsweek quoted Citi economist Mushtaq Khan as saying. “Oil has softened, but even if prices stay where they are, Pakistan will run a large deficit,� Khan said.

According to the magazine, Khan noted that Pakistan needed IMF advice more than money. It said proposed loans from Saudi Arabia could stabilise the currency, but other investors “would not bite until they see a plan for structural reform�.

Earlier, an IMF staff assessment of Pakistan’s macroeconomic situation had called it fragile and vulnerable to a crisis.

According to the IMF experts responsible for the assessment, the external current account deficit for 2008-09 will be $14 billion or 7.7 percent of the gross domestic product (GDP). With capital inflows of about $7 billion, the IMF estimated the external financing gap to be around $7 billion.

Real GDP growth is expected to slow further to about 4.5 to 5 percent in 2008-09, while average inflation is projected to increase to 16-17 percent owing in part to the expected pass-through of higher international food and energy prices.

The IMF also recommended that a stronger effort is necessary to broaden the tax base by eliminating some tax exemptions. Interest rates should be allowed to rise as needed in order to lower inflation and ensure that the domestic financing of the deficit is covered entirely by commercial banks and non-bank sources.

The IMF noted that Pakistan has requested an oil facility from Saudi Arabia to defer the payment of oil imports of 110,000 barrels per day, which at current oil prices would amount to $5 billion annually. The terms and conditions of the deferment were on hold till the presidential election.

"There is a greater sentiment from some pakis of platepissing which is more prominent now than ever. as if there are no cyclical downturns in a capitalist structure.."

ah, ok. I guess that explains what you meant by "some perspective please". I think it's actually disingenuous to call this a cyclical downturn in a capitalist structure since, as you must be aware, there are plenty of really bad government decisions behind this.

CreateAlpha: my point was that the $25 billion estimate that the Congressional Budget Office came up with is likely to be a lot lower than what the taxpayers actually pay. It's a similar situation to the savings and loan crisis of the 80s where the originally estimated taxpayer cost was way lower than what they actually paid.

Hamidm sahib:

Taxing where the money is done by both republicans and democrats. Ronald Regan gave some the biggest tax breaks to upper 1%, only to tax more heavily later. "Read my lips" president continued with taxes in his 4 year term. Cliton continued taxing and generating another $100 Billions from the top 1%. So what Regan gave as breaks in his first 4 years were taken back over the next 12 years (next three terms), two of those terms were republican. This is American way of tapping resources, and giving it back. I think you said somewhere that middle America has trillion dollars in savings through taxation, now Bush is suggesting bailing out Fannie and Freddie. Thus even Bush Jr. is taxing. I do feel taxing is a better alternative than borrowing from China and paying $750 Billion to countries, as your candidates McCain and Palin say, who are not supportive of America.

Givernment in America cannot dictate too much, it has very limited control, whether it is republican or democratic control. Even common American like you and I, knows this. I just happen to prefer democratic way, than republican way. There is no need to trash democratic way. There is a bigger issue of healthcare and housing crisis. The threatens health and well being, and the second threatens equity / savings of the middle America.

Rabia, how do you propose you gauge the asset base? Are you going to diligence each contract underwritten by FRE and FM? Do you propose only underwriting the segment?

Of course there is no upper limit...the american government is taking on the guarantee...not lituania. Some perspective please.

The worst thing about this plan to put it under conservatorship is that it's so open-ended. I think the government estimated that it would cost the taxpayers ~$25 billion but there is no actual upper limit.

Re: # 110

CreateAlpha

Federal Reserve and US Treasury did try a 'bailout' for BearStearns but when they saw deeper problems particularly with confidence then the 'fire sale' was used as a last resort. Technically, you are right, then again why are wrong to argue with a clueless person.

If initial reports are correct, then FRE & FNM are getting conservatorship ie US Govt will take over the ownership, this is not a bailout for the common stock holders who will see their equity go to zero. The company business will continue under new management and capital infusion. Companies are most likely to be broken and sold in parts.

Bubba, I am not a republican. I just don't undestand this sky is falling silliness.

I told tahmed years ago to get over his "democray" shyte. There is no room for democracy in pakistan, which requires some intestinal fortitude among the people. The people want messiahs...the messiahs have been coming from the army and the landed gentry. Now the fundos are also trying their hand.....pakistanis are fk'ed.
Getting a judge back or two is not the panacea to pakistan's predicament which is currently more about ensuring the reserves can make it beyond 2 mos of exports.

arjun#118( post # not the suffix:))

It's a long time since I read about this, so the US laws may have changed since then.

Re: # 113 Posted by CreateAlpha on September 7, 2008 7:25:16 am

Alpha,

I agree with your post, and the only paki that is in agreement with our republican thought is hamid mian. Unfortunately for our p.o.v. he is near retirement and is therefore unable to be authentic. He claims that since he is a paki, he is unable to side with the correct position. Personally, I think that the disease is beyond this. Since hamid is born of mixed parentage of a Punjabi (an emotional rhetorical, non-civilized culture) and a Pathaan (correct, emphatic, honest, culture), he inadvertently becomes self-centered. It is influx of all those Kashmiri (wanna-be Punjabis) that I more concerned with and their forays into understanding the complex international financial system.

I, for one, do not claim to have a complete grasp of the current game being played by democrats regarding our money.

You are correct that [ and ISNA is running soup kitchens at full capacity.] the ISNA fundamentalists are trying to show what that they understand these complex financial plays.

I am just an ordinary civilized person who wants to do good for the American tax payers. However, it is these Masjid-hopping paki who interject themselves, without any inkling of knowledge and total complete arrogance against intellect, which most of them do not have. These Masjid going pakis flood the ordinary common civilized conversation with an argument which is asserted loudly and vigorously, even though it may have no substance at all. They seldom realize that assertion is no proof.

#116 Posted by dost_mittar on September 7, 2008 8:18:10 am


that capital gains on principle residence in Canada is not taxable unlike in the US where it is.


that's incorrect.


When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes.