California Nightmare: Home Prices Drop 41% Year Over Year

Eleven straight months of price decline wipe outs



Economic followers are riveted to their TVs this week to see how the $700 Billion bailout plan is going to shake out. Meanwhile, the bad news in housing just keeps on a coming with Californian homeowners lynched on airhorn lanyards warning other bubble areas what is to come.

Here's yesterday's Bloomberg alert screaming some eye popping news about median prices in the Golden State. Because of the Bailout fixation, most economic followers didn't see this one fly below their radar:

Sept. 25 (Bloomberg) -- California home prices tumbled a record 41 percent in August from a year earlier as foreclosure sales pushed down values in the most populous U.S. state.

The median price of an existing, single-family detached home fell to $350,140, the lowest since March 2003, and will likely fall further, the Los Angeles-based California Association of Realtors said today in a report. Sales increased 56.7 percent from August 2007 and 1.8 percent from July.

``While sales appear to have turned the corner, the median will experience additional downward pressure as we move into the off-peak season in the coming months, and will continue to face pressure from distressed sales,'' Leslie Appleton-Young, vice president and chief economist of the association, said in a statement.

My note: Pity the new California homeowners of 2007 who bought the hype that the bottom was in a year ago. I've had stocks in my life go down 41% and didn't sell them because the company was still solid, dividends were still increasing, and other stocks in my portfolio were going up, giving me a gain for the whole port through diversification.

Unfortunately, if you bought a home in a fast depreciating market, you can't double down on your purchase, you can't sell your home a year later and expect to make any positive equity. In short, those who try to time the bottom in Real Estate are screwing themselves royally by not practicing the most important emotion a homebuyer can have: patience!

Nevertheless, there is a piece of gold in the info above: home sales increased year over year by 57% in California. The obvious reason sales are taking off is the majority of these sales are stressed properties such as foreclosures, short sales, bank REOs and homebuilders selling off inventory at fire sale prices.



Is it time to buy California Real Estate now?


What's the rush to try and snag a deal today? If you think $350,140 (the new median in California) is affordable housing with taxes, insurance, maintenance and other hidden costs added on, go ahead, knock yourself out. You'll wish you had waited longer.

It makes no sense to me to wade into the biggest purchase of my life in times like these where banks are failing, cash is king, and pressure increases to the downside on durable goods (autos, boats, homes, etc.) will continue to deflate perceived and real values of these assets.

And to top this, many people wanting to buy a home in California which is suddenly 41% cheaper than it was just one year ago have another problem which makes homeownership impossible: they no longer qualify for a loan because they don't have a healthy downpayment.

With banks failing left and right (JP Morgan bought out Washington Mutual this morning), what bank officers will hand out Ninja loans, no doc loans, interest only loans, etc., when the Feds are at their doors investigating loan fraud? The lending climate no longer blows favorably with tail winds for the first time homeowner trying to buy his first home.

Isn't that funny? A few years ago, anyone with a greed glands short circuiting their brain could buy a very overpriced home AND get a loan by just going to a mortgage chop shop and saying "I don't have a job, I don't have money in the bank, and I want to become a millionaire flipper like all those guys on the TV say I can be." No problem. You qualify for this $600,000 home built on a fault line or in a hurricane flood zone.

Jokes aside, with fewer qualified buyers, and more inventory coming on the market through credit seizures (think of the thousands of empty, unfinished condos and housing projects across America), foreclosures, and panicked sellers trying to escape their ball and chain, now is definitely not the time to buy a house in California.

To put it more succinctly: the Housing Bubble blew for almost 10 years in bubble areas across this country. California has only reported 11 months of falling median prices. It will take a much longer time to work out the excess. And what happens if a nation of negative savers are now forced to save for a downpayment? Think about it. Who is going to buy all these foreclosed properties if they cannot get a loan?

Lastly, please notice it's the California Realtors Association vice-president and chief economist who said above, "While sales appear to have turned the corner, the median will experience additional downward pressure as we move into the off-peak season in the coming months, and will continue to face pressure from distressed sales." (Note: my highlight)

As George Thurogood used to sing, "It wasn't me."



Speaking of foreclosures, check out California's


Are foreclosures slowing down in California as medians fall precipitously and sales begin to pick up?

According to the same Bloomberg story:

More than 101,000 California households received a default notice, were warned of a pending auction or foreclosed on last month, RealtyTrac Inc., a seller of default data, said on Sept. 12. That was a third of the nation's total and represented one in 130 homes in the state.

Prices fell in all 20 of the state's regions surveyed by the Realtors. Eight of the 10 metropolitan areas with the highest foreclosure rates are in California, led by Stockton in first place, according to RealtyTrac. Merced, Modesto, Vallejo-Fairfield and Riverside-San Bernardino ranked second through fifth. Bakersfield, Salinas-Monterey and Sacramento ranked eighth through tenth.

Homes priced under $500,000 made up 72 percent of August sales compared with 40 percent a year earlier, due to the increase in distressed sales, which include homes in foreclosure and so- called short sales where the purchase price is less than what's owed on the house, the Realtors said.

Save your money. Scrape together a 20% downpayment for a home or duplex. You'll have plenty of shots in the future to confidently wade in at much better prices.

Yeah, as prices drop, sales will pick up. So what? If you played follow the leader back in the Bubble Days, when everybody from your Taxi Driver to your Beautician was buying an overpriced home, you and they had your heads handed to you.

Don't be a panic buyer again.

Homes in California are still not affordable for the masses. Loans are harder than ever to get. And with the giant bailout looming across the land, we will probably experience what Japan has seen over the past 18 years . . . a slow prolonged recovery which will mean you'll have plenty of time to wisely consider all the giant fat pitches in Real Estate which will eventually come our way.

Patience.

Practice it.


Caveat Emptor,
Rock Trueblood

Florida Housing Prices Will Not Double in the Next 5 Years

News Team 6 Interviews Delusional Miami Realtor

This past weekend, I saw a report on the Miami NBC affiliate in which a business reporter was asking people what would happen after the $700 Billion bailout which Henry Paulson is pushing onto the US taxpayers.

During this report, the reporter talked over video of entire condos in Miami where vacancies are running 80-100%. Construction at some of these condos had stopped dead in their tracks as the developer had run out of money before completion. Some completed condos sat empty as buyers had run away, leaving their deposits. Other condos, with few occupants, were described as desolate and dark places for the few owners whose equity in their units has already evaporated.

I don't watch much TV news, especially since Mainstream Media folded their tents and went to Iraq with no questions asked. And what really solidified my leaving TV news in the waste bin of memories was how no one at CNBC, Fox, CBS, NBC, or ABC was following epic Credit and Housing Bubble and the insane deficit imbalances which was sure to blow up in our faces. (I thank my lucky stars I found many of the "Links to make you think" and the most interesting message board on the Internet, Motley Fool's "METAR" board.)

So there I was, curling some dumbbells before I got on the motorcycle to head into work. And I flipped on some "local" news (we can't afford big News desks in Key West, hallelujah) whence I saw this reporter doing his thing about the $700 Billion Bailout.

While I watched and looked at all the pretty condos with dozens and dozens of empty floors overlooking Miami Beach and downtown Miami, our reporter at large began the cheerlead for the Real Estate turnaround which he felt this Bailout might bring us. He said something along the line that the bailout would give hope to all these people stuck in upside down mortgages and with few neighbors. He said the Bailout should get the credit markets moving again. And then, mixed in with his twaddle, he introduced some bigwig Realtor from Miami.

This Realtor said (and I'm paraphrasing as I can't find the video on youtube) "This bailout will do wonders for the stalled condo market. All these condos you see behind me should have no problem selling out AND prices should double in five years from where they are today."

I snorted at the screen and asked out loud "Are you eating Oxycontin's like button candy, Brother?"



Affordability: the bailout won't help this issue

Look at the Census Bureau chart above. Look at the first line with those incredible statistics concerning South Florida homeowners.

Almost 60% of all South Florida homeowners are paying more than 30% of their paychecks to mortgage payments.

Almost 30% of all South Florida homeowners are paying more than 50% of their paychecks to mortgage payments.

Obvious questions: How many more tens of thousands of foreclosures will South Florida face over the next five years?

If a bailout includes provisions for a mortgage borrower to refinance his loan, who still wants to hold onto an asset which continues to lose value as more inventory comes on the market at ever cheaper prices?

As the government pushes new regulations in lending to prevent fraud, how in hell will Ninja loans, Interest only loans, Reverse Amortizations loans, and all the other dangerous ways of borrowing still be acceptable? This means a much smaller pool of potential buyers as the USA has negative savings as nation, meaning fewer people will have 20% to put down for these cheaper condos this Realtor is claiming are at bargain levels now.

Meanwhile, more Americans are seeing more jobs in the FIRE (Finance, Insurance and Real Estate) economy evaporate. Southeast Asia continues to grow and siphon American factory jobs and white collar service jobs. And little things like gasoline, heating oil, cereal, eggs, milk, etc., will continue to inflate dramatically as $700 Billion new dollars entering the economy means the dollar will continue to slide ever downward.



Waiting on the .49 cents burger special at McDonald's

I read an AP news release this morning in the Orlando Sentinel titled "Millions spend half of income on housing"

The Census Bureau reported Tuesday that more than 7.5 million people -- almost 15 percent of American homeowners with a mortgage -- are spending at least half of their income on housing costs. That's up from nearly 7.1 million the year before.

Historically, the government and most lenders consider homeowners to be financially burdened if they are spending 30 percent or more of their income on housing costs. But that definition now covers almost 38 percent of American homeowners with a mortgage -- 19 million of them.

My note: Once again, Affordability is not being addressed by these Sunny Day Real Estate types who claim housing has bottomed and will double in price in the next five years.

How bad is it for some of these homeowners in over their head? From the same article . . .

The most cost-burdened homeowners in the country live in the giant Miami-Fort Lauderdale -West Palm Beach metro area in South Florida: 58 percent of them are spending 30 percent or more of their income on housing costs, and 29 percent are spending at least half their income on housing.

In Davie, Al Ray is so strapped for cash that he eats out only on Wednesdays or Sundays, when the local McDonald's sells hamburgers for 49 cents.

Ray lost his engineering job in November, and has been working as a high-school tutor, scratching out about $1,000 a month -- if he's lucky. He struggled to make his $1,400 monthly mortgage payment and $330 monthly homeowners-association fee until May, when he stopped paying. (Rock's highlight as this is a subject I will be bringing up in future blog.)

Ray, 44, is looking for work and renting out a room in his two-bedroom condo for $500 a month, but his income doesn't match his expenses and he is facing foreclosure."I barely have money to survive," he said.

Finally, from the same source, we get something which I hit upon time and again when I caution people who want to buy South Florida Real Estate without doing some back of the envelope math.Though home Real Estate prices have been falling for 2 years in South Florida, many working families still cannot afford to buy a home because . . .

Although prices in Florida are dropping, the high cost of land, construction, insurance and property taxes makes living in Metro Miami, in particular, too expensive for some. (Again, my highlight)

Don't be fooled again

I hope South Florida and Florida Keys residents will let that Census Bureau chart sink in and not give any credence to some Bubble loving Realtor who claims Miami condos will double in five years after the bailout is made.

Housing is still not affordable in most of Florida . . . especially in the Florida Keys.

I don't care how Realtors want to shade the truth, but when you figure in mortgage payments, condo fees, taxes, maintenance and insurance, housing must and will come down in price. Working class people are still priced out of the market. And as I said in a post from a week ago, we are just one good hurricane away from Real Estate cutting the elevator cables which has enabled a slow descent so far.


Let all the hot air out of the Housing Bubble

More from the AP article:

"We had a bubble," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. "This is a case where we absolutely want the market to adjust."

The data underscore the serious affordability problems in this country and highlight how the slightest financial problem — from a lost job to higher gas prices or insurance premiums — can put a family behind on their mortgages and into the realm of foreclosure. (Note: My highlight)

When home prices fell in the early 1990s, borrowers had more equity in their homes, and were able to escape foreclosure. But now, an estimated 10 million homeowners owe more on their mortgages than their homes are worth, according to Moody's economy.com.

More than 4 million homeowners were at least one month behind on their loans at the end of June, and almost 500,000 had started the foreclosure process, according to the Mortgage Bankers Association.

The bailout will save most lenders and some borrowers

The $700 Billion bailout is not going to save everybody. Of course the FIRE sector is foremost in the minds of Republicans. Democrats want to give concessions to small homeowners who jumped into loans which they can't pay. Each party wants to save its base constituency.

But what the $700 Billion bailout cannot save is Housing.

Cascading foreclosures over the past two years created a domino effect in the lending industry, undermining investor confidence. When people starting raiding their Money Market Funds last week, the Bush administration, fearing a run on all types of banking, announced the greatest rescue package and market intervention since the Great Depression.

The majority of the money from this bailout could be blown by banks simply bringing their books back into balance. There are scads of banks, large and small, which do not have enough reserves to cover current and future losses. That's why short sales are taking so long to approve. Once a bank books a short sale, they have to show their loss on paper.

The pressure to lend will not be foremost in the minds of bailed out bankers, especially if the Bailout Plan contains language which cuts out bonuses and high pay for CEOs who pad their books with shaky loans.

Just because the Treasury might let a FIRE sector company borrow money, doesn't mean the banks and insurers will have the cojones to take on risk like they did in the manic years of the Housing Bubble. If and when a bank is moved to lend to a homeowner, do you think it will be in the form of Liar's Loans, Ninja Loans, Zero Interest Loans, and all the other junk hybrid loans which undermined this matchstick pyramid of crappy Mortgage Backed Securities?

I sure don't.

I believe most of the money will sit in reserve, maybe invested back into something safe like short term Treasuries (yielding way less than inflation, by the way) so that banks can pay off losses from credit default swaps and other toxic derivatives.



Housing will not have another Bubble as we've just seen in the next 50 years.

I don't see Real Estate even keeping up with inflation for another four generations, the fourth of which will have outlived the young people of today who will remember this once in a lifetime economic meltdown.

I feel we are going to do a repeat of Japan. I feel Real Estate here in the US will not double in five years, ten years or fifteen years now that I see what is happening to our financial banking core.

As a nation, we are standing in the eye of Category 5 Economic shitstorm which reaches from coast to coast.



Sic Semper Realtorus

The hypehyperventilatingRealtor from Miami who made this ridiculous claim that empty or foreclosed condos today will sell for twice their price by 2013 has not thought through what is happening to credit markets: derivatives trades in the trillions of dollars are finally unwinding. It's going to take months and years for some of these trades to be tracked and marked to reality.

Banks are simply not going to lend money to anyone with less than stellar credit and 20% downpayments. >

The days of the Chop Shop Mortgage Company setting up on every block are gone.

Mortgage brokers and Realtors will be thought of as old time stockbrokers who used to overcharge people in the past to buy 100 shares of AT&T: everything in Real Estate is moving online and people in the future will wonder how in hell we agreed to pay 6% commissions to Realtors when most of the work can now be done by anyone with a computer.

I suspect more buyers will look to save points by D.I.Y. methods employed on the web, and I see Realtors giving up their fancy offices to work from home so they can cut their commissions and still make a living.

As more Realtors and Mortgage brokers realize the Gravy Train has left the station and it ain't coming back, more newly unemployed white collare workers will put pressure on the jobs markets.

SIn a world where incomes are not able to buy homes, we will see home prices continue to fall for many years to come.

The Great Unwind has begun.

American Empire is now officially in decline.

Foreigners hold trillions of our debt and now that debt is going to be backed by the full faith of the Federal Government, that is, you, I, and all the other Middle Class taxpayers.

Derivatives are beginning to unwind like a rubber band inside a 1950s golf ball which a young boy with a pocket knife has just set free. We are talking tens of Trillions of dollars of bets made in unregulated markets which companies are trying to stop from taking them under as the pace of unwinding picks up.

Meanwhile, housing will decline, grinding inexorably down in price, year over year, as more Americans lose their jobs due to losses in FIRE economy.

More strapped homeowners and speuclators will realize that walking away from their unwise decision to buy a home during a Housing Bubble makes economic, if not ethical, sense.

Multiply Al Ray in the story above by another two million Americans in 2009 and 2010 . . . when the bulk of Option ARMs kick in with higher rates (short term Libor rates have doubled in the last week portending bad mojo for long term rates) . . . and there's no way housing will bottom any time soon.

Remember, gang, fewer people will qualify for any kind of loans going forward.

This is the new reality America faces: our currency will be debased further, durable goods will deflate, precious metals will still be a huge store of real value, and oil will continue to march ever higher as China and emerging markets eclipse the USA in making real things which can still be sold elsewhere in an emerging market world.

Meanwhile, the USA will slowly sell more of our assets to foreigners with real savings.

Lastly, if we don't find us a real leader who understands History in this election, America will become an also ran country bankrupted by greed and Consumerism.

As always,Caveat Emptor,

Rock Trueblood

Paulson Will Not Bully Congress into a $700 Billion Carte Blanche Bailout

("This is Captain Paulson to the Me First Golden Parachuters. Bad news, Boys and Girls, the rabble on the ground are mad with shooting fever. You had better duck and cover your ass!")

Congress Will Not Give Paulson's Pals a $700 Billion Carte Blanche Bailout

With many Congress Persons seeking re-election, and with elections looming in 6 weeks, this bailout plan will NOT pass without major quid pro quos from the FIRE sector.

No Congress Person wants to go home, try to get re-elected in this climate, without having something to point to:

"I asked for clawback provisions for CEO pay and bonuses."

"I asked that all mortgages be reduced by 300 basis points"

"I asked that all companies seeking loans must give up some its hard core assets to taxpayers."

"I asked for stricter regulations to be advanced so that this will never happen again."

"I asked that . . ." and you've got the picture.

Paulson really misfired by trying to panic our leaders into making a swift crisis based decision which would have been detrimental for US middle class taxpayers and beneficial to his white collar friends on Wall Street.

This country is in no mood for continuing on with politics as usual. By using fear as his emotional button of choice, Paulson basically gave a "put" to share sellers in the FIRE sector this past Friday. And now Congress is taking away the Paulson Put.

Paulson's credibility gap

A few weeks ago, Paulson was saying this thing was contained. Then last Thursday, he tells a closed door hearing of Congressmen that we were moments away from an entire collapse of our banking system.

Quoting from the NY Times link in red above:

“When you listened to him describe it you gulped," said Senator Charles
E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”

“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”

Paulson's use of crisis based tactics backfires

Paulson has little credibility remaining. He's really boxed the banking system into a corner by giving Congress all the ammunition it needs to bully a bailout deal where taxpayers might come out ahead.

Congress, with the support of Citizens who are making their voices heard, is not going to let Paulson have the keys to the Treasury without oversight and taxpayers receiving some kind of equity from these companies wanting free money.

In an excellent article this morning in the NY Times "Stopping a Financial Crisis, the Swedish Way" we learned how those Socialist Swedes have benefitted and actually may have profited (or will profit) from a similar financial crisis in the early 90s.

The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.

“If I go into a bank,” said Bo Lundgren, who was Sweden’s finance minister at the time, “I’d rather get equity so that there is some upside for the taxpayer.”

Sweden spent 4 percent of its gross domestic product, or 65 billion kronor, the equivalent of $11.7 billion at the time, or $18.3 billion in today’s dollars, to rescue ailing banks. That is slightly less, proportionate to the national economy, than the $700 billion, or roughly 5 percent of gross domestic product, that the Bush administration estimates its own move will cost in the United States.

But the final cost to Sweden ended up being less than 2 percent of its G.D.P. Some officials say they believe it was closer to zero, depending on how certain rates of return are calculated.

We have a chance, both Republicans and Democrats, to stop the abuse on Wall Street and better this country.

I'd love to see a "clawback" provision enacted in which any company taking taxpayer bailout money will then have to submit detailed looks at their cooked books. If forensic accountants in the government's employ (at the new lending arm funded by taxpayers) see past crimes where CEOs, CFOs, and other officers took home millions in bonuses or backdated options, then the government can go to the sociopathic miscreants and demand the money be returned to shareholders.

Indeed, I am not alone in this wish. Everywhere I read on Internet message boards how middle class Americans are writing their Congressmen they do not want Henry Paulson to have a blank check to do as he pleases when rescuing his wealthy buddies in Wall Street executive suites.

And you can tell Congress is not ignoring the anger of "We the People" either.

People are clamoring for Executive compensation limits in return for bailouts.

As a recent Politico.com story notes:

As markets reopen Monday, the issue is a surprising flash point between Treasury Secretary Henry Paulson and House Democrats, who have drafted a bill giving Paulson much of what he wants but requiring that Treasury also demand “appropriate standards for executive compensation.”

Treasury argues that such requirements would make it harder to persuade companies to sell their troubled assets to the government. But Democrats, who otherwise admire Paulson, say that the former Goldman Sachs chairman is blind to the politics of the situation and the huge divide between the average taxpayer and the financial world now seeking relief from bad debts that have clogged the credit system — and that threaten the entire economy.

A senior aide to John McCain, the Republican presidential nominee, told Politico on Sunday that the Arizona senator also favored compensation limits as part of the package, as does the Democratic nominee, Barack Obama, according to a campaign spokesman for the Illinois senator.

Spread the pain, don't allow just the wealthy to gain

I'd love to be the process server who knocks on some sociopathic CEO's door (such as Angelo Mozilo )and say, "Yo, you remember those hundreds of millions of backdated options you cashed out while you ran your company into the ground and wiped out your shareholders? Well, today, our forensic accountants of the Taxpayers Union (or whatever the entity will be called) finally finished the tabulations of the real mark to reality losses which you hid with smoke and mirrors accounting. You owe us everything you stole, Mr. Mozilo. We intend to give it to the Bank of America shareholders who took over your crap. And we expect you will be required to apologize on national TV for your slimy anti-American behavior. Here's your paperwork. See you in court."

I want to see Big Time white collar sociopaths and pyschopaths pay as much as I've seen Realtors, speculators, appraisers, mortgage brokers, and other smaller time crooks pay by going to jail. Why do Wall Street smoothies always get slaps on the wrists? Why aren't they serving time in real prisons with people who've knocked down grandmothers for pocket change, or people who've robbed you while you were not at home. Every damn day in America, thousands and tens of thousands of retirees have had their retirement funds siphoned off by scuzzbutts on Wall Street.

Wall Street criminals have not paid for their sins.

Today, Wall Street sharpies are hoping to screw us taxpayers harder and deeper.

There is a problem with what Wall Street designed to do. This time, over 90% of the country is not buying their bluff. Even McCain and Obama are against Wall Street on this one.

A $700 Billion carte blanche bailout to Wall Street ain't going to happen.

It's election time. And this crisis could not have come at a more inopportune time for the nation's biggest greedheads.

Congress persons running for re-election will not go back home next week to run on a "I gave Wall Street all they wanted - no strings attached." That would be political suicide.

Nope, Congress is hot to make some points with the middle class voters. From today's NY Times story "Bailout Plan Talks Advance in Congress" we read the following:

As heated debate began on Capitol Hill, Congress and the administration remained at odds over the demands of some lawmakers, including limits on the pay of top executives whose firms seek help, and new authority to allow bankruptcy judges to reduce mortgage payments for borrowers facing foreclosure.

Congressional leaders and Treasury officials also said they were close to an agreement over a proposal by some Democrats in which taxpayers could receive an ownership stake, in the form of warrants to buy stock, from firms seeking to sell distressed debt. Lawmakers want to require an equity stake, while the administration wants flexibility on that matter, a Treasury official said.

“I walked down LaSalle Street on Friday, a great street in Chicago lined with banks and big office buildings,” said Senator Richard J. Durbin of Illinois, the No. 2 Democrat. “A lot of people came up and said ‘hi.’ But a lot of them came up and said: ‘Are you really going to do this? $700 billion bailing out the banks? And I said: ‘I don’t know. At the end of the day, I just don’t know.’ ”

Mr. Durbin, in a speech on the Senate floor, angrily recalled that the administration had similarly requested swift approval of its plan to attack Iraq. “Just as we should have asked more questions about weapons of mass destruction six years ago before we found ourselves in this war,” Mr. Durbin said, “we need to ask questions today about where this is leading.” (Note: highlights are mine.)

Representative Henry A. Waxman, Democrat of California who leads the Oversight and Government Reform Committee, said: “The taxpayer is being asked to risk billions to protect the bonuses of investment bankers.”

The skepticism was equally palpable at the other end of the ideological spectrum.
“This is going way too fast,” said Representative Mike Pence, Republican of Indiana and a conservative leader who said constituents he met this weekend were flabbergasted at the plan. “The American people don’t want Congress to make haste with the financial recovery legislation; they want us to make sense.”

And Mr. Shelby, of the banking committee, said: “Congress must immediately undertake a comprehensive, public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion. We owe the American taxpayer no less.”

Mr. Gingrich, the former House speaker, said he expected Republican lawmakers to oppose the plan in increasing numbers. “I think this is going to be a much bigger fight than he expected,” Mr. Gingrich said, referring to President Bush.

Last thoughts

I hope American taxpayers receive equity in every loan we hand out to these sharks. And I hope clawback provisions are enacted so that CEOs will begin to understand that if they are not openly transparent and accountable to their shareholders, they will suffer as shareholders have done while entire brigades of Fat Cats jumped out of burning planes with gold parachutes.

Enough is enough, America. We the People will bailout these bastards, the die is already cast. But this time, we control the game. If Wall Street sharks want to shake the dice, if they want to get in on the action, let it be with our house rules we set up.

And remember, if your Congress people are not representing We the People in this upcoming election, fire them.

Rock Trueblood

Over and out.