Press Zero for Reset: Are we out of the Subprime Mess?

Before the subprime issues, there were many articles and research papers highlighting the impending challenge the mortgage market would face once rates started their inevitable reset descent. Two camps emerged; one believed that the subprime market would be contained while the other camp saw it as the tip of something much larger. There is no point in rehashing which side won this debate since it is already clear. The next step is to focus on a market analysis and assess the current situation. Recently, we haven’t seen much analysis in this area because it is a foregone conclusion that many subprime loans are resetting and this is causing a profound market impact beyond the subprime sector. But what does the future potentially hold? There is a great article that was published in the O.C. Register talking to a BofA analyst, Robert Lacoursiere discussing the future of the mortgage correction. The chart provided on the site provides a disturbing picture:

*Soucre: O.C. Register

From past articles and projections, we already knew that September through December of 2007 would see the largest number of subprime resets. We've seen a couple of reports putting monthly rate resets in the range of $50 billion to over $100 billion. This is important because it will be a litmus test on the resiliency of the housing market. It is clear that many lenders and financial institutions are buckling even with the current environment. A few other things will place additional strain on the market including third quarter results that unfortunately, will reflect a slow and underwhelming summer housing market. This coupled with growing inventory, stalling appreciation, and the massive wave of resets will make it very difficult for housing prices not to depreciate.

Option One – Refinance

According to DataQuick, during the first half of the year over 43.4 percent of loans in Southern California were jumbo loans. Jumbo loans are home mortgages that go above $417,000. The typical monthly payment buyers committed to was $2,421. Sellers facing reset issues have the option of refinancing into a fixed rate mortgage. Thanks to a low interest rate environment, rates are still hovering at all time lows. Unfortunately, many home owners are unable to refinance even into reasonable conventional loans because they stretched into their current home. If we take a look at notice of defaults (NODs) in Southern California, we are seeing an exponential jump:

The illuminating thing of this data is that many of these NODs are turning into foreclosures. This is a phenomenon absent in the previous decade of the housing boom. Sellers facing trouble were bailed out by a rising market and rapid appreciation. There was no need to refinance aside from taking out money or lowering a higher previous rate. Those sellers that desperately wanted to stay in their home, used creative methods such as tapping into a home equity line of credit and bought extra time for paying off their current mortgage. The burden has now shifted since the mortgage markets are tightening their belts and appreciation is stagnant. In fact, this is the first year of serious market issues in Southern California in over 10 years. The refinance option may not be a viable choice for many home owners that have a subprime loan and are facing a reset in the next few months. That is why many housing bears cautioned that these loans had a biased toward continued appreciation and no insurance in case the housing market started losing any steam.

Option Two – Sell

Last month sales volume fell over 50 percent in Los Angeles on a year-over-year basis. The last option of hope for many home owners in trouble was selling. In fact, many sellers were able to unload their homes before their rate reset and profited nicely. This went on for multiple years. In a bubble, rational behavior and fundamentals seem to take a backseat. Even staunch opponents of housing started singing a different tune. It is almost a historical prerequisite that once a bubble forms and is in full stride, rhetoric regarding a “new era” creep into the mainstream lexicon. Selling is becoming a challenge in the current market because of market depreciation, increased inventory, and buyer psychology. Another characteristic of any bubble is irrational logic guiding fundamental economic decisions. There was really no reason for housing prices to run up the way they did with no income support, population growth numbers that didn’t instigate amazing jumps, and renovations that didn’t reflect hundreds of thousands of dollars in price premiums. In addition, buyers are no longer fighting for the one home on the block. Any person living in Southern California need only get in their car for a weekend drive and cruise the local streets. Without fail you will find one or two homes for sale within your field of vision. The growing number of foreclosures doesn't help:

Sellers are also competing with short-sales and foreclosures. The worst time to negotiate is when you are hostage to spiraling debt. Many of these sellers have no choice but to sell. Life goes on and things such as divorce, employment disruptions, or crushing debt payments are enough reason to move out. At a recent presentation by Countrywide, they announced that the number one reason for people facing foreclosure was “curtailment of income” at 58.3 percent of all causes. The second leading cause? Medical or illness coming in at 13.2 percent. This paints a contrasting view to the current reports that employment and income is strong and healthy. We need to start examining leading indicators such as building permits, insurance claims, and the money supply because this will tell us where we are heading. Looking at lagging indicators such as the unemployment rate only tell us where we have been. They are both important but clearly we are at a tipping point of market data not reflecting market reality.

Option Three – Foreclosure

It goes without saying that most people do not want to lose their home through foreclosure. It is a financially and emotionally stressful life event. 100 percent of people do not want to lose money. Yet looking at the exploding number of foreclosures, it is becoming more apparent that the country debt load is becoming too much to handle. Keep in mind that we have never witnessed a time in history of such extraordinary national real estate appreciation. We had previous regional housing bubbles such as the Florida housing boom during the 1920s. In addition, our unemployment rate is relatively low and inflation according to government statistics is still under control. We examined this in a previous article and highlighted that in modern day society, avoiding debt is nearly impossible for most working class Americans. The cost of education, healthcare, housing, food, and energy have all gone up dramatically in the last decade. Let us take a look at the national mortgage debt load for the entire country:

As you can see from the above chart mortgage debt has tripled from 1992. It went from approximately $4 trillion to about $12 trillion in the current market. You can also see the inflexion point at roughly 1999. It is hard to imagine that such a booming economy with relatively low unemployment is facing the debt struggles that we are facing. One of the main reasons is that employment in the housing sector has boomed in the last decade. It goes without saying that a slower housing market will equal unemployment for those in the housing industry.

Solutions

Policy makers are providing their solutions to this mortgage crises. Initially what started as a subprime problem is now spilling over into multiple sectors. This has the potential of pushing the economy into recession and more and more economist are chiming in with future odds. What are some of the current solutions on the plate?

*Tax forgiveness for those in foreclosure

*Lowering the Fed Funds Rate trying to make credit products more attractive

*Increasing loan caps through government sponsored entities (GSEs)

*Funding for credit counseling

These solutions may help but they only put a bandaid on the overall broken housing market. In a politically charged environment with so much at stake next year, both sides of the political spectrum are treading water carefully. No one wants to be seen as the party that didn’t help suffering home owners. Bernanke is a student of the Great Depression and realizes that history doesn’t bode well for a Fed and government that doesn’t act swiftly. Even though they publicly echo fears of inflation, policy moves and data point toward a more permeating fear of deflation. I truly believe Americans do not want to see their fellow citizens fail and suffer. In fact, I believe most Americans have a strong work ethic and hold that people that sacrifice and work diligently should be rewarded. What frustrates most Americans is a game where the uber-wealthy are given corporate welfare when times are tough but poorer Americans by these same groups are seen as not being able to pull themselves up from their own bootstraps. The solution to this, even though people do not want to hear this, is a market correction. This means that local income levels and the new tighter credit standards will dictate future housing prices. In some areas this means 10 percent drops while in others this can reach 50 percent or higher. Will this happen? The data is already pointing toward this. Even if property drops 30 percent over 5 years, combined with inflation adjustments this is close to a 50 percent drop. Some areas in Los Angeles are already seeing 20 percent adjustments year-over-year.

By looking at the reset charts, we realize that the housing correction still has a long way to go. What will happen in the next year through policy and market sentiment will set the tone for the next decade of housing in America.

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The Real Cost of a Picket White Fence: 3 Housing Factors to Think About; Prices set at the margin, income discrepancies, and bubble euphoria.

After drinking water out of the bailout fire hydrant, I think most people are scrambling to get an idea of what is happening. An issue placed on the back burner by many politicians is suddenly garnering massive media playtime. Amazingly, Americans in a large percentage are against any bailout talks or consideration. The nationwide MSNBC and a local station KTLA ran unscientific polls asking the questions, “do you support a government bailout for the mortgage industry?” The answer was a resounding NO. In fact, from a brief review of these polls 95 percent of Americans are against any form of corporate welfare. They realize that deep down this is only a ploy for the government to subsidize maverick hedge funds, Wall Street circus acts, renegade brokers, and Vegas inspired buyer gambling. They want you to believe that they are doing it for the person on the street. How are they going to help out expensive counties such as Los Angeles where the median home price is $547,000? And what about those that have been foreclosed or are being foreclosed on? Don't they deserve a retroactive bailout? Come to think of it, why don't they give me money I invested in tech stocks back in 1999 that was wiped out since these companies had P/E ratios higher than Barry Bonds' batting average. Or the money I lost in Vegas two months ago on blackjack (I suspect that the dealer was a former hedge fund manager since he asked if I wanted margin and wanted to flip a home in Henderson). A decade of conspicuous housing consumption has left the nation hanging on a thread looking for more bubbles to fuel their credit addiction. What other highflying act will allow American consumers, a large part of the economy, to continue their spending marathon? We’ve already seen that mortgage equity withdrawals had a lot to do with bolstering the economy over the past years. Unfortunately you can’t tap into your home equity line of credit if you are swimming underwater Jacque Cousteau style. See, like any Ponzi Scheme, those that get in early do well on the backs of those that come in late. And like any good Ponzi Scheme those coming in at the end are left holding the manure filled bag of worthless mortgage backed securities; it turns out a 600 square foot Real Home of Genius isn’t really worth $500,000.

Then we have the fear mongering by the politicians and the media. The new line that I’m hearing dished out is “well you wouldn’t want your entire neighborhood full of foreclosures eh?” Instead of drop kicking my monitor Jackie Chan style at this completely stupid and moronic assertion, I will show you that at any given time, only a very small percentage of all housing units are up for sale. So why all the brouhaha? Because housing prices are set at the margin; meaning, homes are priced by the units that are currently sitting on the market. And the fact of the matter is we’ve been operating on a one-trick pony economy where housing has kept us out of any recession and has provided the fuel to keep this SUV of spending going forward. But now that housing is depreciating we are realizing that yes, this economy is based on housing. Otherwise, who really cares that housing prices are trending downward? If we are such a diverse economy this one tiny sector shouldn’t mean so much; but it does because of the massive credit bubble we are living in.

So today we will examine 3 new factors that you should keep in the back of your mind since I have a feeling this housing mess won’t go away anytime soon. First, home prices are set at the margin so we will examine the actual numbers. Since politicians and the media like churning information and creating a fear cycle we will carefully look at housing supply in relation to units being sold. And again, anyone following this housing bubble isn’t surprised. In fact, it was predicted here a very long time ago. You may be saying, “but I feel safe because daddy Bernanke is here to save the day, he saw this coming.” Let us take a trip down memory lane:

"At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained," Ben Bernanke Quote to Congress' Joint Economic Committee. March 2007

“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited,” Bernanke said in May 2007.

“In particular, the further tightening of credit conditions, if sustained, would increase the risk that the current weakness in housing could be deeper or more prolonged than previously expected, with possible adverse effects on consumer spending and the economy more generally.” –August 31 Ben Bernanke

Wrong, wrong, and now you get it. Even the last statement is misleading because how did we go from “fundamental factors” being okay in May to “weakness in housing” in August? So given that the Fed Chairman didn’t see this coming even as early as May of this year, do you have confidence that these other yahoo politicians have the right policy decision in mind? We can discuss other policy mistakes regarding the current administration but that would require much more than this housing blog.

The second factor we will look at is income discrepancies. Current home prices are not in line with current family incomes. Unless you think making $14,000 and buying a $720,000 home is perfectly fine and makes economic sense. Finally we will examine the current market panic. Bubbles burst in typical fashion (see Manias, Panics, and Crashes) and this credit bubble will pop in the same way. We can pull the Band-Aid off fast or continue the absurd policies and allow for more guerilla mortgage products to enter the market.

Prices set at the margins

At any given point in time there is only a small fraction of homes on the market for sale. Drive down any street of the 88 cities in Los Angeles and you will see homes for sale, but not many. Unless you are driving in some home builder subdivision in Arizona or a condo high-rise in Florida, the majority of this country isn’t selling each and every single home on the block. But the media now has this fear mongering idea that if the market corrects, every person is going to be bumming cigarettes under the San Gabriel River. So instead of their verbal attacks on the public let us take a look at the actual numbers for Southern California:

*Data Source: Census.gov

There are approximately 6,000,000 housing units in Southern California. Keep in mind this includes apartments, rentals, and owner occupied homes. Now how many homes are for sale as of today in SoCal? How about 139,689 or to make it more tangible, only 2.33 percent of all available housing units in the area. Doesn’t seem like the entire neighborhood is going to hell in a hand basket as the media would like us to believe. And keep in mind that we are seeing record foreclosures and inventory here in Southern California and as of today, we are still only seeing 2.33 percent of all available units on the market for sale. See, not everyone bought into this housing bubble. Some people decided to rent. As I’ve pointed out the majority of households in Los Angeles County rent. Some people decided that they would rather save their money and wait the market out. Some are simply going to rent because they unfortunately cannot afford a home. This idea that everyone should own their home is dangerous and has also led us into this mortgage market debacle. If you are unable to buy a home without a shady zero down mortgage maybe you should wait until you can buy a home with more conventional financing. Others, bought before this entire bubble game started. So they are still sitting pretty on equity and have no plans of selling. There are also approximately 20 percent of people in Los Angeles that own their homes outright; many of these people are retired or nearing retirement and have no vision of flipping their homes. So the battle comes down to those that want to buy and those that want to sell right now. It looks like more and more people are wanting to sell and less and less people want to buy (or at least buy at current market prices). And why would you buy right now with prices decreasing each and every day? In addition, the prospect of you flipping and turning a profit now is as likely as finding Michael Vick at a PETA fundraiser as an honorary member.

Show me the Income!

Again the media likes to believe that everyone is earning $300,000 so a $547,000 median home price isn’t so far fetched. I’ve discussed this affluent façade in a previous article but let us take a quick look at income statistics for this country:

Household income (overall percent of US households over):

Income Percent of Households over:

$65,000 34.72%

$80,000 25.6%

$91,705 20.0%

$100,000 17.8%

$118,200 10%

$166,200 5%

$200,000 2.67%

$250,000 1.5%

$1,600,000 0.12%

So what does this tell us? In order for a family to comfortably afford a median priced home in Los Angeles County they would need to make $200,000. As you can see from the above data, only 2.67% of all households make this much. And I doubt any family making $200,000 will want to buy a Real Home of Genius as they would probably prefer to rent in a better neighborhood and invest the massive difference they are saving from buying a home. Are there tax benefits to owning? Of course. Many housing pundits want to use some voodoo economics to make you think spending $1 so you can get two quarters back is smart math. If you really need a tax break buy a rental property in a non-bubble city; you’ll get cash-flow, the benefit of owning real estate, and the feeling of owning a home if that is something that you desperately need. With all this talk, isn’t it fascinating that the media doesn’t state the obvious? That homes are massively overpriced! Incomes cannot support current prices without using mythical fantasy world exotic mortgages that seem to be a thing of yesteryear. 2/28 mortgages, option ARMS, negative amortization, stated (liar) income loans, and all variations of these dubious mortgages will come under the congressional microscope in months to come, just watch.

Smoking the Housing Bubble Peace Pipe

We’ve been living in a housing obsessed society. In fact, I’ll be happy in a few years where you will be able to go to a party and not have to listen to some wannabe Trump talk about his recent flip in the Valley and how he pocketed $50,000. The hardest part listening to this hogwash is knowing that they are part of this speculation bust that we are now seeing; deep down anyone that has a basic idea of finance and economics knew that this couldn’t go on forever. And here it stops in Q3 of 2007. In fact, I haven’t heard much of this talk in the last year. Yet in this housing bubble decade we have seen the media eat up the housing game and carry the party line. Take a look at some of the shows that have made the air in recent years:

Property Ladder

Discovery Home's "Flip That House"

A&E's "Flip This House,"

HGTV's "Bought and Sold,"

Bravo's "Flipping Out"

TLC's "Real Estate Pros."

The Apprentice

And the list goes on. Everyone suddenly had housing religion. But the good thing about bubbles is after the pop, slowly the talk dissipates. Remember the technology bubble? For years this was all the talk and anything with a dot com was worth putting your entire retirement funds into. How much talk have we had about these once high flying companies after 2001? Not much. I think by 2009 we’ll be more concerned about cleaning up the mess of 2 back-to-back bubbles, that is if we don’t see another bubble after this one. And yes, housing is very different from stocks. But what do you think funded this game? Mortgage backed securities. Where did these MBS trade? Hopefully you realize that not everything is linear but following the interconnectedness of this credit bubble you can understand why we are truly in an epic once in a lifetime housing bubble.

Do you think politicians and the media are handling this housing bubble burst correctly?

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Pride and Prejudice: Examining the Psychology of Those in the Housing Industry.

“It is difficult to get a man to understand something when his job depends on not understanding it.”

-Upton Sinclair

It is hard to be objective when your job depends on seeing things a certain way. Many people have a hard time accepting mistakes and would rather lament and lash out at others that contradict their view of the world. I remember posting in a housing forum 2 years ago the same analysis I’ve presented many times here on the blog. Those in the housing industry would dismiss the bubble argument as holding no merit and would simply pull out a nice upward trending chart, and point to the current median price. They were right. All the numbers pointed to incredible appreciation, quick sales, and no signs of stopping. My view was income in many areas simply did not support the current growth of the market. The only way the market was being supported was via exotic financing and bubble psychology. In a bubble market, psychology and perception is just as important as economic fundamentals. So people in the housing industry didn’t have to say much. Here are a few quotes from the former head of the National Association of Realtors during this time:

March 2005: " I believe that in years to come historians will see the beginning of the twenty-first century as the "golden age" of real estate. And I want to persuade you to take advantage of this historic opportunity. "

Source: Are You Missing the Real Estate Boom? Why Home Values and Other Real Estate Investments will Climb Through the End of the Decade-And How To Profit From Them" March 2005, p4. Author David Lereah

September 2006: "With a general background of growing population and favorable affordability conditions, home sales are staying at very healthy levels," said Lereah. "As a result, we'll continue to see above-normal home price appreciation for the foreseeable future."

Source: Chicken Little's revenge, Salon

I talked about the psychology of a housing bull in a previous article. The above quotes demonstrate a common view of many in the industry. One of these beliefs is housing will always go up. This is not true as we are seeing year over year drops in many locations. In some cases, these drops are large bringing down the price of a home by tens of thousands of dollars [see Real Homes of Genius]. In addition, as I pointed out in the Los Angeles County demographics article, population hasn’t exploded to the extent to justify 20+ percent gains for three consecutive years. Again, the chart is still used by many in the industry and they are right since last month Los Angeles hit another record median price in housing prices here in Los Angeles. But they are driving forward looking in their rearview mirror.

Now that the market is demanding economic fundamentals, the man behind the curtain isn’t so strong as we once thought. The unstoppable real estate juggernaut turns out to have an Achilles heel. Those subprime loans were actually a lot more shaky and weak than many had predicted. And this bubble bursting isn’t contained to only the lower nether realm of mortgages, it is also impacting the untouchable prime loans. Since late 2006 over 142 mortgage operations have closed shop. The year over year price appreciation predictions by housing bulls in late 2006 is no longer used as an argument. And this time when they hold up the chart you can see uncertainty in their eyes. After all, what does a mortgage broker care if the median is high if he is no longer in business? Or why would an agent be happy with a $700,000 home if he doesn’t have any clients to drive around?

The argument has psychologically shifted. There is no need to talk in obscure forums regarding the housing bubble. The mainstream media is now carrying the baton. Now the argument of many in the industry is one in which they are blaming all the negative press for popping the bubble. “Income is rising, population growth is occurring, and housing is still strong.” Or so they would like you to believe. Tell that to the tens of thousands of former mortgage workers. And this argument seems more of a self pacifying defense mechanism of convincing themselves that somehow the market will be back to its old tricks again. Deep down they pine for yesteryear when you could get Funky your mangy dog a $450,000 mortgage and move him into a 500 square foot home with no co-signer.

Common sense isn’t so common as the adage goes. Why is this? We all know exercising and eating healthy is paramount in your long-term well-being but why do so few Americans do it? In fact, according to the American Obesity Association 127 million adults in the US are overweight with 60 million categorized as obese. Maybe it isn’t so easy. After all, exercising and eating healthy requires commitment, a desire to better your body, and a belief that keeping yourself in peak shape will benefit you throughout your life. Yet we live in an instant gratification world. Depending on your current condition, it may take you six months to get into good shape but only after working out multiple times a week and eating a healthy diet. When we see infomercials we always here “lose weight NOW!” or “lose 30 pounds in 3 weeks!” The psychology here is that people want solutions quick and fast for something that needs to be looked at as a long-term lifestyle commitment.

Okay Dr. Housing Bubble, what does being overweight have to do with housing? Aside from believing that staying in physical shape should be a top priority for everyone, the psychology behind the numbers speaks to the get rich quick mentality of the last seven years in real estate. Real estate is a great long-term investment. In fact, owning rental properties is part of my balanced portfolio. But you buy it at prices that make sense. Otherwise, it is like the expensive treadmill that so many people buy and later becomes a towel hanger with cobwebs. If you are smart, you’d just pick up the weekly classifieds and buy one at a deep discount from someone who overpaid from the start. There are a few ways to get rich quick: Hit the Lottery, inherit some money from a rich family member, invent something unique and sell it, or steal it. Other forms of getting rich take time like slowly building your business, going into a profession that’ll pay off long-term, and investing wisely. Even though some of the data is old, I recommend people read the Millionaire Next Door. It’ll give you a good idea of the difference between being wealthy and making a lot of money. Unfortunately, I know some brokers who made money hand over fist during the good times and now, are struggling to pay their lease on their brand new Mercedes. I detailed how a high earning couple with no financial plan can go from rich to struggling in one year.

We have all faced circumstances in life where our pride is at hand. It is hard to let go of something you fully believe in, even if you may be wrong. You may be wondering where any economic analysis or data is in this article. There isn’t any. Bubbles don’t follow economical rules. They rely just as strongly on market perception and psychology. By the time people get out of the euphoria and start examining the market with a critical eye economic fundamentals are no where to be found. You may want to read the article on Manias, Panics, and Crashes. Bubbles expand because of greed and pop because of fear. Too much greed and fear is never good in a society. Even after the Crash in October 1929, people in early 1930 still thought the market would rebound. But the market slowly went downward hitting a bottom on July 8, 1932. A plunge of 90 percent from its peak high in September 1929. It took the market 25 years before the Dow Jones ever saw the peak of September 1929. I’m not sure we’ve even seen the major capitulation point yet. Was it the subprime collapse? The hedge fund issues? Liquidity problems? We won’t be able to have an exact apex until 2 or 3 years out as to the exact moment the market gave way. And bottoms take a few years to play out after a bubble collapses. If you don’t think we are in a bubble you can read the article over at TIME Magazine with the title, Your House is Worth Less? Good . They are finally acknowledging that what we’ve lived through is a bubble.

Many in the industry that still do not get it, are wanting the Fed or some other form of government intervention. During the boom times, they wanted the government to be hands off and not enforce even the smallest regulations. Yet now with times shifting they want the Fed to jump in with an orange rescue jacket. This is what we call cognitive dissonance. According to Wikipedia:

“Cognitive dissonance is a psychological term describing the uncomfortable tension that may result from having two conflicting thoughts at the same time, or from engaging in behavior that conflicts with one's beliefs, or from experiencing apparently conflicting phenomena.”

I know how most of you feel about a bailout and I’m glad we share the same sentiments. If there isn’t a bailout for those losing their home there shouldn’t be one for lenders who irresponsibly gave money to everyone and anyone. Senator Dodd’s proposal is absurd regarding lifting caps on mortgages. The last thing we need to do is prolong the bursting of the bubble and waste more taxpayers money. Politicians seem to be throwing out ideas and seeing what sticks. Some city politician wanted to give $10,000 to each family facing foreclosure here in California. Which would only help for a few months and then what? I haven’t heard any idea that I liked until this morning when presidential candidate Barack Obama unveiled his bailout plan:

“Unscrupulous lenders who deceptively sold subprime mortgages to millions of Americans should be fined and the proceeds used to help bail out borrowers facing a wave of foreclosures, according to Barack Obama, the Democratic senator running to be his party’s presidential candidate.

The proposal is among the most radical yet from a leading Democrat and comes as Washington tries to respond to a growing wave of foreclosures and a crisis in credit markets.”

I’ve thrown around this idea in the comment section of this blog and other forums. I was wondering when someone in the public eye would have the guts to put something on the table like this. Whatever you may think, this is the way to approach this issue. Why should you, a financially prudent person that didn’t participate in this credit orgy be forced to subsidize someone’s speculation? And don’t feel sorry for those in the industry because the housing complex has sufficient money to throw at lobbyist in Washington to keep the party going. Instead of lobbying, they can start the foundation called Bail Out America (BOA), not to be confused with BofA, and open up their check books. If they really care about the family on the street, they will not feel so bad about bailing out the folks that got them rich in the first place. It’ll be an interesting 2008.

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