Countrywide acquisition still haunting Bank of America

You mean losses of $33 BILLION, not $33 million. Idiot.

I have been writing about this on the Google BAC boards since Wednesday. Thank you Jim Cramer for jumping on the right story today - CSK, your buddy around the corner from the studio.

2/4/09 - US passes Isakson (R-GA) amendment -

Isakson’s amendment would provide a direct tax credit to any homebuyer
who buys any home. The amount of the tax credit would be $15,000 or 10
percent of the purchase price, whichever is less. Purchases must be
made within one year of the legislation’s enactment, and the tax
credit would not have to be repaid.


2/6/09 - "The Ken Lewis Amendment" - Get it in by Monday. It has to go
on the 2008 tax 1040....no time for
2009.


$50,000 tax credit or 10% of the purchase price, whichever is less, on
any home purchased directly from the banks that are sitting on
foreclosures. The tax credit would not have to be repaid.


Buyers would buy directly from Banks - no commissions, no realtors.
Unload these houses off the balance sheets of the banks as quickly as
possible.


Get the buy side rolling again, TARP then comes in behind mid-next-
week with $350 billion to spend on providing loans to the banks to
hand out
money to buyers of these foreclosures, fully transparent, as Obama has
insisted upon.


Put every American citizen buyer on the list, every Bank that lends a
penny on the list. And
both the buyer and the seller should be very happy and proud to be on
the list.


1st Round - Set a timeline for Americans to buy-in. 2nd Round - open
it up to the Euro and the Far East.
Just like the old days, when the Japanese bought Rockefeller Center.


The United States has to leverage the fact that their foreclosed
homes, are better than foreclosed homes anywhere else on the planet.


Let people have a withdrawal from their 401K without the early
distribution penalty to free-up more
capital to make these home purchases, and do capital improvements to
these homes that stimulate the economy.


The US Treasury, will be working in harmony with "Joe Six-Pack" and
Ken Lewis (Countrywide). Everyone is on the same team. WIN - WIN - WIN


"Joe Six-Pack" gets the American Dream - the $50,000 credit to buy a
foreclosure off of some bank that is diseased.


President Obama will go down in history with this one.


Truman, "If you don't care who gets the credit, you can actually get
something accomplished"


Ken Lewis gets to go get back into his core business (banking), and
dump his garbage (homes he doesn't want) that are on his books.


Greenspan can e-mail one day and thank me for cleaning up his mess.


There is no one in the world that can come up with a better plan by
Monday, I assure you. If you think you can add to this plan, follow
the message path, and send this to your United States Congressman
tomorrow first thing.


If you see an accounting error in this calculation, show it to me.


But as I see it, Joe Six-Pack gets to rob the bank without a mask on,
and the Branch
Manager tells him the combination to the vault, and the police let
him
walk-away free.


You have 3 entities:
1) United States Treasury
2) Banks with homes they don't want
3) The American people


All three entities are of equal importance.


Give the American people the deal of the century. They don't have 20%
down, but with the rebate
they can pull it off, and buy defaulted/foreclosed property.


The Econ Stim built into the plan: Well these dumps that get bought up
(the foreclosures), they
need the grass cut, the floors tiled, plumbers, electricians, etc.
That's Trickle-Down Econ 101.
JOBS JOBS JOBS. It's not the Reagan Method where he stimulates the
Penthouse, and hopes it falls to the Basement. This plan stimulates
the Middle Class, and it flows to the poor.


Blue-Collar is sitting around twiddling their thumbs right now without
any work. Get these hard-hats back on their feet. Home Depot can't
sell a hammer, get them back on their feet.


Obama says WPA FDR method is the right way to go. Ok, possibly. But it
will take to long, as widely accepted among Wall Street and
Economists, and Republicans.


Give the American people the keys to their destiny, and forget about
10 guys in a room handing in a best guess to Obama on Sunday with a
plan for Monday.


This is my best take.


Numbers:


$200,000 home listed in foreclosure
You need 20% down today - so that's $40,000


Obama is going to give you $40,000 (in this example) in a tax credit/
rebate. It's a similar model used in Battery Park to give people money
quickly to keep those apartments packed after 9/11 when the air and
trauma made the area unlivable.


He's is going to pay your down payment.


Renters would be buying up the foreclosures. Young people especially.
Retirees. Young people with parents that can get them over the hump,
etc.


So what is so complicated about this scenario?


The 30 year fixed would go up.....back to "normal" levels" - and the
banks would be offering better interest rates on all of their products
as a result of it.


I see Fischer checkmating Spassky. You tell me otherwise.

The tax credit is a joke. A $15,000 tax credit is not the same as having $15,000 cash for a down payment. If you want to do some math, do so on the number of Americans, as a percent of population, that have liquid $15,000 to put down on a (still) over-priced home.

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