Gov/Forbes: Bush's Bad Mortgage Rx

I found it strange Bush's proposal left the financial industry holding the bag. Articles on the proposal focused on homeowners and the effect the proposal would have on markets. I thought it strange the financial industry would willingly stand there holding the bag and basically pay for their own unwarranted enthusiasm. At some point cries of "Well what about the poor, widdle banks" would show up.

Late Friday another article showed up answering the question. Seems Paulson had a hip pocket proposal set for release late Friday which would encourage state and local governments to float bonds designed to alleviate the pain banks, etc feel of the mortgage fiasco

http://www.nypost.com/seven/1207200...umnists/ws_disastrous_mortgage_fix_767611.htm
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So Treasury Secretary Hank Paulson will propose to Congress to let cities and states issue tax-exempt debt to bail out even more borrowers.

Cities and states would borrow billions and lend the money to "homeowners" (in fact, these borrowers don't actually "own" their homes; they only own the mortgage). The "homeowners," in turn, would use the money to pay off the mortgages they can't afford - and take out new, more affordable mortgages with their city or state government. (Not all tax-exempt debt is guaranteed by the city or state that issues it, but this debt would have to be - no private investor will touch this risk right now for an interest rate that would be "affordable" to these borrowers.)
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I just love free market capitalism.:mad:
 
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It IS the lenders problems. The lenders encouraged borrowers to borrow excessively to the point of helping them falsify, or turning a blind eye to falsification, of financial data to qualify. The investors share the blame too. The know what they were getting into, but their own unmitigated greed made them willing to ignore the abuses obvious to anyone willing to look. The banks and the investors deserve to take it on the chin. Banks have made trillions borrowing money from the Fed at cheap rates, then lending it out on credit cards at exorbinate rates, with borrowers using rising home equity to pay their cards. That gravy train is coming to an end, deservedly so. When Peter can no longer be robbed to pay Paul, the whole credit market is going to have a shakeout a lot bigger than has been seen so far. I have no pity for banks, they're big boys and they engineered this, no bailouts for anybody!
 
It IS the lenders problems.
...
The investors share the blame too.
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And unqualified borrowers who took a bet on housing price appreciation using somebody else's money.
And the construction industry busting a gut to ensure no unqualified borrower was without an overpriced house to purchase.
And realtors, appraisers, etc. who ensured no unqualified borrower was not matched up with a loan they could not repay.
And cities, towns, and villages (and their residents) who encouraged wanton housing growth to add to their tax base.
And politicians who pushed relentlessly for "affordable housing" to curry favor with constituents and buy a few more votes.
And ...
 
Greed and stupidity in the past several years have already caused a loss in inherent housing values. The only question now is how that inherent loss is translated to realized loss.

The government plan will not "fix" the mortgage problem; it only shifts the immediate problem from a small visible group to other less visible players.

We will all end up paying to solve this problem, it is only a matter of how.
 
The public is going to pay whether or not the government does anything.
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Hallelujah!

Capitalism is great and has been the greatest wealth creation system yet devised, but it isn’t perfect. Laissez faire isn’t the utopia some believe, as this country’s history clearly demonstrates. Government regulation can be maddening but it is a necessary evil. American economic history lays bare the accomplishments and shortcomings of pure capitalism.

Like it or not, we are all interconnected and dependent on each other. There are no new frontiers. And even if there were, as soon as the frontier is settled and people have something at stake to lose, they will want to become part of the union for the protection it affords.
 
This just in.....Bush is not a conservative! His fiscal leadership sucks...............but then again, that would imply HE HAD FISCAL LEADERSHIP!!!
 
No suprise

Bush has never been a conservative.

Do things like Prescription Drugs for Seniors or No Child Left behind ring a bell.

It is hilarious when a big government statist like Fremmer criticizes RP for earmarks and yet the Prescription Drug Bill will cost an estimated 1.2 Trillion dollars.

Bush baling out irresponsible people(with the monies of the responsible) who acquired mortgages for homes they could not afford is no suprise to me.
 
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