It seems that a rant against the Obama mortgage plan has boosted CNBCs Rick Santelli right into internet star status overnight.
Still doubt that Rick touched a deep nerve with his rant against the homeowner bailout package? Check this out: Overnight on Facebook, his fans have come out in hordes. There's a "Tribute Group" to Rick Santelli (609 members); and a "Join the Chicago Tea Party" group (435 members); and "Rick Santelli for Man of the Year" (173 members).
He even got a strange, direct rebuke from the White House Press Secretary Gibbs:
“I would encourage him to read the president’s plan and understand that it will help millions of people, many of whom he knows,” Gibbs said. “I’d be more than happy to have him come here and read it. I’d be happy to buy him a cup of coffee - decaf.”
Later, Gibbs went further: “I also think it’s tremendously important…for people who rant on cable television to be responsible and understand what it is they’re talking about. I’m…feel assured that Mr. Santelli doesn’t know what he’s talking about.”
I'm not sure why Santelli needs to go to the White House in order to read this plan but I would like to read the nuts & bolts of the thing and not just this Q&A FAQ thing. Here is an "executive summary" but it is pretty broad and not really full of details on how they will get to certain things and how much they will pay for each item.
Also it is all seems voluntary so the banks or the mortgage servicing companies aren't compelled to sign off on the thing if they don't want to. Instead of an executive pay and bonus clawback this could have been a string attached to the TARP money. They could have forced (or incentivized banks through lower then market rate loans) into restructuring the loans so that more homeowners don't fall into foreclosure.
The anger that Santelli tapped into is the fact that good money will be used to bail out the bad money. People who saved a 20% downpayment and got the lowest fixed rates that they could are being asked to pay $270 billion for all those people that took out a jumbo, no-interest, no-document, variable ARMs with 2 home equity lines of credit.
To take an Aesop's Fable: The ants are being fleeced so that they can pay for the grasshopper that didn't prepare for winter. The "Chicago Tea Party" is already reflected in the stock market falling to multi-year lows. Wait until this "Santelli-mania" hits main street.
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