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We know some folks have an issue with President Obama's new stimulus package, but damn, Rick. CNBC analyst Rick Santelli, reporting from the floor of the Chicago Board of Trade, went on an epic rant regarding the stimulus package saying, "The government is promoting bad behavior," before turning to the traders on the floor and whipping them up into a frenzy. He also calls for a Chicago Tea Party in July, saying - at the 2:10 mark - "All you capitalists that wanna show up to Lake Michigan, I'm gonna start organizing it...I'll be dumping in some derivative securities..."
Check out the rant in all its glory below.
Thanks for the tip, Matty!
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I love, love, love how traders and other financial professionals now are lecturing the rest of the USA on fiscal responsibility*.
I think we have passed the point of irony and gone into black hole of absurdity.
*yes, many consumers spent recklessly, no doubt, but the traders have no ground to stand on anymore.
I just love Rick Santelli. He's super smart and loves to go on rants like this.
Hilarious.
"How many of you people want to pay for your neighbor's mortgage? President Obama are you listening? How about we all stop paying our mortgage! It's a moral hazard"
That's Yacht logic. As in "I have a yacht, you all can go swim"
If millions of Americans lose their homes banks will be annihilated. Not to mention the affect on the country of millions of empty homes that banks can't pay to repair rotting while people fall into bankruptcy. America is not just the economy you jerk.
Was thinking more about your "great rate" than your monthly payment a bad decision? Yes. But finger-wagging from someone who helped bring those horrible practices to the people is laughable.
I'm sorry, I'm missing how Rick Santelli "helped bring those horrible practices to the people."
The entire financial sector has been based on irrational actors and "punditry" for far too long. Santelli was in the hedge fund racket at Sanwa Futures. The sheer audacity of unethical behavior in hedge funds leading up to this meltdown is staggering.
This man is telling you that money can make more money by simply being money and that saving people's homes, and quite possibly their lives, should cause us to rise up and rebel. That's nonsense.
That's not what he's saying. He's saying that those assets should be redistributed in the marketplace. If a repo'd home or car can be auctioned to someone who can afford it, so be it. That way the loan is effectively payed off (though at a fraction of the price) without using tax-payer dollars.
He's actually not being a corporate fat-cat here. He's being a laissez-faire capitalist. Why should tax payer dollars go back to the banks when it was the banks who lent the money to under-qualified people to begin with?
I don't necessarily agree with his argument but it's important to understand what he is saying before you argue against it.
I understand it, I simply disagree with it and find the argument, at this late hour, ridiculous.
The problem with the form of capitalism he's advocating is that it necessitates a larger 'bust' to correspond with the larger 'boom'. Letting the cycle play out, hands off, would destroy the country. This is the disconnect for those in the financial sector, who long ago stopped acting in the rational interest and instead began to create more and more nuanced schemes. The real impact in jobs lost, homes emptied, families destroyed and citizens impoverished is more important than simply hewing to Milton Friedman and Adam Smith.
All that said, I don't think any of the government measures are going to fix the problem. But, like FDR's New Deal, it will keep the citizens of the nation from falling apart. Look to the history of the 1930's, this country came very close to the knife's edge on more than one occasion.
"The unethical behavior of hedge funds" caused this? Really? Hedge funds have taken how much money from the government? What about the banks and insurance companies? What about government institutions that got into the subprime business and promoted lending to people with little financial stability? What about the behavior of individuals (i.e., a good portion of this country) that chose to live with zero savings? Let's remember if people didn't take out these loans the whole thing stops before it gets started. I think simply pointing the finger at one part of this whole chain is naive. It's like me saying the internet brings porn to the people and you posted on the internet therefore you promote pornography.
Solely responsible? Absolutely not. Played a huge role in the inflation of the market, creation of shaky financial 'products' and contributing to record market instability? I believe so.
It's the temerity of his tone. I had the same reaction to people who hated everything George Bush said, did or thought. They assumed the absolute worst (though they were sadly often correct) rather than seeing a sincere attempt to deal with a problem.
I believe Obama and his team are trying to right the ship, and someone screaming for revolution, after profiting hugely off the inflation, is just loathsome.
I think if you've followed Santelli you would find he's been fairly critical of the Fed and their free-money policies for some time, including before all this broke.
I tend to get my financial information from FT, on the whole I think CNBC does more of a disservice with it's commentators. Santelli is only known to me through some of his more exuberant appearances and his entertaining clashes with Jim Cramer, who is far, far worse than Santelli could ever be.
Come join the party!
www.chicagoteaparty.blogspot.com
Thanks, Rick.
Are you responsible for your neighbor’s bad decisions?
http://pacificgatepost.blogspot.com/2009/02/obama-mitigating-mortgage-foreclosures.html
Obama and Congress appear to think so. Is there any common sense in this program?
PERHAPS AMERICA SHOULD CHANGE ITS PERCEPTION OF HOUSING
http://pacificgatepost.blogspot.com/2008/06/housing-consumption-not-investment.html
It is time to view a house as an expense.
What I'm most sick of is that I live in a newer subdivision of moderately priced homes ($225K-$295K) and during the peak of the lending nonsense many families bought homes in my neighborhood that never should have been allowed to. We have had seven foreclosures three of which are still fighting them so they can stay. Two of three families have never taken care of their property since they moved in. One has a yard with more weeds than grass, a section of their driveway falling apart and not one but two Lexus parked in the driveway! If they can't afford $20 bucks for a bag of weed and feed what makes anyone think they'll pay their mortgage? Now our lovely government is going to step in to help them stay in their home!
Meanwhile I pay my mortgage and keep my yard and house in tip top shape and drive a lousy PT Cruiser and I don't get a darn thing! I chose to live within my means and only have one child because that's what I can afford. I should be the one getting "incentive" for making on time payments not these idiots. I don't care if the foreclosures hurt the value of my house. Maybe once they get these people out the next owners will actually take some pride in the place! This government needs to start making individuals and corporations pay for their mistakes.
I just wish I could have enjoyed this rant as much as Rick!!!! Cramer's "You Know Nothing" rant is still tops in my book... The Harry Met Sally scene even better... Okay I really want to learn something now what does Bill Gross or even Billy Crystal have to say about the latest housing plan...???
Where did this assumption come from that the vast majority of forclosures at the result of bad decisions and extravagance on the part of the homeowers? That's like the whole "welfare queen" driving a Caddy to cash her government check. It probaby has some basis in fact but I seriously doubt it's the norm. Tons of people have actually lost their jobs through no fault of their own. That's not the "extravagance" of putting in an extra bathroom, that's reality. This guy and the rest of the guys in the video are dicks. But then I knew that when I was drinking downtown in bars and a slew of them would come in after work...
Responsible people that lose their jobs have savings accounts that they use to pay their mortgages when they're looking for a new job. If you can't afford a home, while also being able to put money into savings in case you lose your job, you couldn't afford the home in the first place.
It is Time to support a candidate that is actually for the people best interest. Get behind Matt Reichels historic run for congress in the upcomming special elections! Tell your freinds. Tell Your mom. Tell anyone.
http://mattreichel.us/
It is Time to support a candidate that actually discusses issues rather than posting vapid comments on message boards. Get behind anyone but Matt Reichels in the upcomming special elections! Tell your freinds. Tell Your mom. Tell anyone. Matt Reichels a tool if he thinks this type of insipid spaming works.
http://anyonebutmattreichel.us/
Rick Santelli spoke for me when he expressed his interpretation of the unconstitutional stimulus package, pork, no pork, or little pork!
The word "fair" isn't in the constitution. The word "fair" is a word for children who are upset because they didn't win.
American adults work hard and expect to keep what we earn except for the allocation to U.S. Constitution authorized programs - military, highways, NOT FEDERALIZED BANKING, NOT NATIONAL CAR COMPANIES, NOT WELFARE, AND NOT EVERY CONGRESSPERSON'S PET PROJECT!
I will meet Rick Santelli anywhere anytime to have that "tea party".
Fortunately, there are enough of us now calling, faxing, and meeting our congressmen and congresswomen daily to bring their focus back to the U.S. Constitution. Anyone remember that document written by our founding fathers who were sick and tired of being oppressed by Kings and Royalty? Anyone remember why our country became a world magnet? Because socialism and subsequently communism don't work! If any one believes in those government systems, I'll buy his or her airline ticket to Canada or China! Then call me in a year and let me know what you think!
The government is mostly helping out people who live in cookie cutter, residential only, winding streets with three names - type neighborhoods where bank owned properties next door DO compare to the value of the responsible owners home. In an urban neighborhood, I don't think foreclosures on the block have that effect for three reasons
1) these homes were built before the extreme mechanization and compartmentalization of home const. This causes a lot of variety between contemperaneous homes of yesteryear. Not something you see in modern sub and exurbs
2. Homes on the same block can differ widely in age, square footage, and zoning. This also leads to a diminishing of using "comparable" transactions to determine the value of your own home. According to Zillow 1.5 yrs. ago, a 110 yr old ghetto ass wood frame house on W. Wabansia and N. Rockwell Streets was valued at $630,000. New const. in the vicinity distorts the reality. But people here realize that distortion
3. This plays off reason two in that the mix of retail and business use zoning in the vicinity adds variety to the experience of the neighborhood and the value of the property. The proximity of things like a train stop, a park, or a retail strip can also affect real estate valuations in a relatively small area of a big city, regardless of reason #1
This bailout is more of a lifestyle, of people thinking that living in monotony in shittily constructed boxes in car-centered sprawls could somehow be of VALUE to someone else. Especially when aquifers tap out and gas prices skyrocket again. The beneficiaries of this bailout will likely be people in these zones: CA, NV, FL, or some other suburb where the only factor for or against your investment is someone else's IDENTICAL investment. Why not diversify? Is it really that bad to live next to some Section 8 and some stores? Is it really that bad to live in a place where you can leave your house and go somewhere on bike or foot? Where you can leave in two directions and not hokey-foke out like a creek going to a river? Isn't there a RUSH song about this?
This is the comment that I agree with the most and is the closest to the Reality of the situation. I guarantee when Rick Santelli does see President Obama and Geithner he will be told the severity of the situation which CANNOT be expressed to the public because it WILL bring about the catastophe of the Depression instantaneously. Capitalism, the pursuit of individual self-interest that unintentionally produces a collective good for society, has been turned on its head by the previous administration and your comment is Right On that it is too late at this point to for Capitalism to do its thing. The circumstances are too Dire. If you have a small plot of land I recommend you start growing and canning your own vegetables, get some chickens and probably a gun. When the realization of how bad things are kicks in, it'll only help you to be prepared.
I'd rather help my neighbors keep their homes than help this bozo keep his job.