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Bush suspends capitalism, stocks soar - Markets Live at 11am

This entry was posted by Paul Murphy on Friday, December 7th, 2007 at 10:07 and is filed under Uncategorised. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

1. Dec 08   7:43 Posted by Graham Cox [report]

   All the critics seem to be ignoring the fact that the fall in US house prices is being driven by the volume of repossession stock being forced onto the market. That in turn is destroying the value of mortgage based securities. Remember that the latest case-Schiler price index announced end November covers pirce agreements reached at the end of June…so it it doesn’t even cover the credit crunch period yet!

   Even if the plan just slow the rate of house price fall, it will be doing a major macro service; with the non-monetary benefits as an extra..

2. Dec 07   18:51 Posted by Those nettlesome Nixon parallels « a neoconservative, mugged by Hobbes [report]

   […] December 7, 2007 by E. Cartman “Bush suspends capitalism; stocks soar.” […]

3. Dec 07   12:55 Posted by from simple dictatorship to socialist totalitarianism at hagerty.net [report]

   […] I don’t make this stuff up. The only reason that the country’s otherwise astute fighters of individual freedom aren’t screaming bloody murder right now is because they don’t mind a bit of command and control socialism when they think it will wipe their own ass. I’m figuring that America died with the dot com implosion sort of like the UK died with Victoria. That would mean we are almost a decade PAST then end of empire… […]

4. Dec 07   10:47 Posted by Paul Murphy [report]

   V helpful — ta C

5. Dec 07   10:23 Posted by Carlomagno [report]

   Paul, I think you are overstating the plan’s consequences: it’s voluntary and it seems to remain within the bounds of existing rules. See Tanta’s post on Calculated Risk:

   
   From what I have seen about the plan to date, it is clear to me that it is in fact structured with the overarching goal of making sure that it stays on the allowable side of the existing contracts. I proceed from the assumption that nobody could write such a convoluted and counter-intuitive plan if that wasn’t the goal. So everyone who is thinking, “Gee, we’re violating contracts and we still don’t get much out of it!” is thinking the wrong thing, in my view. It’s more like “Gee, we don’t get much out of it when we don’t violate contracts.”

   […]

   There isn’t, as far as I can see, any “safe harbor” provision in all of this. That tells me, at this point, that the authors of this plan believe it is liability-proof (that it basically meets the requirements of the existing PSAs, with the caveat that it isn’t a legally binding mandate on all servicers and securities, so a deal with a very restrictive PSA that this isn’t compatible with can just opt out).

   Is it all kind of anemic after all the build-up? Yep. Does it mean contracts are now invalidated in the U.S.? Not as far as I can see; in fact, I’d say the contracts were the part of this that got the most thorough protection. In my reading of this, giving a deal to a borrower almost seems incidental.
   

   http://tinyurl.com/38dyq2

   (Tanta’s post is being widely referenced as the best publicly-available analysis of the Plan so far.)