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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I just love free market capitalism.
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
<snip>
<snip>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.)
I just love free market capitalism.
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