Wednesday, December 29, 2010

President Obama Keeps His Perfect Economic Track Record Intact: 40% of Loans Modified Under HAMP Are Defaulting

Is there a better predictor of economic failure than President Obama's support for a particular policy? I could make a solid case that there isn't a superior guarantee of an epic fail than support by Obama, ex-Speaker Nancy Pelosi and Harry Reid. They have an absolutely perfect track record of visiting catastrophe upon the American people with their policies.

The latest example?

US mortgage foreclosures jumped in the third quarter as fewer borrowers qualified for loan modifications that would have reduced their monthly payments, bank regulators have said... The number of homes entering foreclosure rose 31 per cent compared with the second quarter and 3.7 per cent compared with the year-earlier period...

...As these [newly foreclosed] properties come on the market, they are expected to depress home prices by between 5 per cent and 10 per cent over the next year, economists said... Hamp modifications totalled 504,648 as of November, well short of the government’s 3m target.

Even when borrowers receive loan modifications, they are redefaulting at high rates. According to a report by the Congressional Oversight Panel, 40 per cent of borrowers who receive a Hamp modification are expected to redefault over the next five years.

In other words, HAMP neither met expectations for volume of refinancing (by a factor of six) or in preventing foreclosures.

Let's tack this onto the administration's stellar economic track record:

 FAIL: The "Cash-for-Clunkers" program cost taxpayers between $20,000 and $45,000 per vehicle purchased.

 FAIL: The "Stimulus" program, which cost $787 billion and was rammed through Congress using the premise that, without it, unemployment would not pass 8%, has resulted in 10.2% unemployment and 17% "under-employment" (U-6). The tab will be paid for by your children and grandchildren.

 FAIL: The $60 billion bailout of GM and Chrysler -- abrogating bankruptcy law with payoffs to various union bosses -- is an utter and complete failure. The businesses are unsustainable without a massive restructuring, including dramatically retooling union contracts.

 FAIL: "Green jobs" in the form of weatherization programs that have been utter, cash-burning frauds and failures. A series of spot-check audits of the $5 billion program indicates that fraud is rampant -- easily 20% can be chalked up to phantom services, blatant overspending on simple items, and unverifiable expenses. But not to worry -- it's only a billion dollars of wasted money, a pittance for this administration.

 FAIL: The bailout of AIG, orchestrated by the then-head of the Federal Reserve Bank of New York (FRBNY) Timothy F. Geithner, "wasted billions" of taxpayer money according to the inspector generator of the TARP program. The initial $85 billion rescue failed, forcing the Fed to pay above-market for the swaps it acquired. The result? "There is no question that the effect of the FRBNY's decision - indeed, the very design of the federal assistance to AIG - was that tens of billions of dollars of government money was funneled inexorably and directly to AIG's counterparties," according to the inspector general. In fact, the terms of the plan were so flawed that the Treasury Department had to dole out an additional $40 billion to AIG just weeks later. For his part in the debacle, FRBNY chairman Geithner was rewarded with a Secretary of the Treasury role by President Obama.

These are the economic qualifications of President Obama and his Congressional sycophants -- the very same masterminds who are in the process of nationalizing the health care sector.

I'll give you one guess as to how that's going to turn out.


5 comments:

The_Bad said...

Not economics, but...

FAIL: Obama calls The Eagles to tell them how proud he is of them for giving Mike Vick a second chance. The Eagles then proceed to dump their next game to The Vikings - a team already out of the playoffs and starting their third-string QB.

directorblue said...

@The_Bad:

Actually, that fits perfectly.

I'm thinking of trying to find out the President's stock portfolio, so I can short everything he owns.

Georgfelis said...

Minor correction. 40% of loans modified under HAMP are expected to default SO FAR. Housing prices could easily fall another 20% to make it back to sanity range, and if so....

Monkey King said...

Can you say reverse Midas touch? The current CinC is supposedly the most intelligent and competent man ever to be in control of the Oval Office, but the lack of evidence to prove such is starting to be embarrassing to those who try to cover for him.

Sad, really.

Monkey King said...

Can you say reverse Midas touch? The current CinC is supposedly the most intelligent and competent man ever to be in control of the Oval Office, but the lack of evidence to prove such is starting to be embarrassing to those who try to cover for him.

Sad, really.