Hank Paulson, U.S. Treasury SecretaryThe housing bubble was created by greed, foolishness, and stupidity, yet here comes the government attempting to keep the bubble from deflating using more stupidity.
"Where will the money come from?"
2007-11-30: Hank to the rescue! (courtesy Motley Fool)
Hank Paulson's latest plan to protect homebuyers from their own mistakes is simple: Lenders extend those teaser rates for a few years. It's a win-win, right? What's the harm, especially when there's no bill to pay? You just reset those interest rates to low levels, and everything will be fine, right?
By rescuing greedy and naive borrowers from their mistakes, our government encourages others to take big, stupid, bankruptcy-inducing risks, secure in the knowledge that the government will bail them out when times get rough. That means trillions of dollars in capital will be ill-invested yet again, something that's much less likely to happen when speculators are made to suffer the consequences of their behavior.
4 comments:
I know it's been said before, but what stinks here is that Paulson and his ilk are bailing out the lenders who pushed these perfidious products, and the FB's are getting shorted one way or another. Of course, those who did things rationally and ethically feel they are getting punished for their decency and restraint.
At first I resisted Mr. Mortgage's idea of encouraging those who could pay back a fixed-rate loan but not an ARM or other exotic loan to seek mortgage modifications. Then I realized his point: make the banks take part in cleaning up their own mess! They pushed these products and if anyone besides the borrower needs to shoulder losses, it should be the lender. The borrower gets a better deal, too. Paulson's plan is better for the lenders, but worse for borrowers, future property-buyers, and the American taxpayer. Peace,
Tom
P.S. The Mortgage Lender Implode-O-Meter is full of related articles.
If this is too simple for posting, I understand. I just don't get how the S&L Scandal came, went, and left the public with the cost of the bailout. I feel as if something very similar is happening again, and the government is just fine with it.
Tyrone,
I've always heard that an organization's tone is set at the top. Enjoy!
Tom
http://tinyurl.com/5kzl73
Thanks, Tom. I linked to that article over at G-Dub. I clicked on the video I inserted and it's no longer available. DC damage control at work???
Ty,
I hate that you didn't get to see it. I suspect that there is damage control going on. I have found a lot of links that lead to expired pages lately, and I have wondered why.
Tom
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