Just one more tax, honest, and everything will be fine.
Posted on 09/24/2008 2:08:33 AM PDT by Zakeet
"Clean and quick," whistled Henry Paulson past the mortgage crematoria. The Treasury secretary's hope for expedited passage of his bailout plan may be realized, but clean and quick won't describe its implementation. You wanted a bailout; you got a revolution.
This column has advocated injecting the money at the level of the collateral -- buying and demolishing the least-wanted, market-souring homes in the subprime hot zone of Florida and the Southwest. This solution really would be clean, quick, would minimize the subsidy to bad actors, could be turned off as soon as it had served its purpose, and would involve no sticky issue of whether to bail out foreign banks along with U.S. ones.
Instead, Treasury's plan is to enter the market at a higher level, buying the depressed mortgage securities supported by these houses.
[Snip]
Nor does the Paulson plan have the Occamite virtue of cutting to the heart of the problem, the housing market. So many mortgage cash flows have been sliced and diced and spread over different kinds of securities owned by holders all over the world -- a big stumbling block to the private sector trying to manage its way out of a hole. It's not clear the new agency offers a solution to this problem. It would probably have to buy the entire outstanding stock of questionable mortgage debt before it would have any hope at getting at the underlying collateral, i.e., houses. But then it would become the world's biggest, most troubled landlord and biggest forecloser on homes. Politics would intervene -- and any potential taxpayer gains would likely be frittered away to keep nonpayers in houses they can't afford.
(Excerpt) Read more at online.wsj.com ...
Chris Doddy and Barney Rubble will make sure my middle class bailout will go to those who pay no taxes or are minority of some sort....to be “fair”.......
no middle class.....its gone...or will be soon.....
Chris Doddy and Barney Rubble need to go to jail.
It is like I posted previously, no politician can make everyone rich, but they can make everyone poor...
“Every time we mention demolishing houses, somebody slaps us over the head with Bastiat — the French economist who’d say you don’t increase wealth, you reduce it, by destroying some houses to make the value of others go up.”
these were ‘junk’ houses and not real wealth. There was too much extra money floating around and it was spent on stupid things.
I’m way over my head in this particular problem but I’m wondering why, if the government is going to attempt this bail out it can’t be done differently?
Instead of writing a check and actually buying(owning) these mortgage packages, why can’t the government simply guarantee the performance of the mortgages to a certain level equal to the historical averages of their performance. In this way the only time the government actually turns lose of a dollar is to take a mortgage off the hands of an institution after the mortgage goes bad.
I believe it is inconceivable that anything approaching even 20% of the mortgages on the books will default and when the market turns up, as it will, the problems will lessen and the guarantees removed after much stricter regulations are put in place for lenders before they can issue a home loan.
In a worse case scenario, the one now being considered, these mortgages are not worth nothing so to claim the money is simply gone is incorrect. The AIG deal is an example of one that can make the government (us) a whole lot of money. Perhaps the mortgage bailout won’t make us anything but it doesn’t have to cost much either and if proper regulation is put back into the lending business it can be stopped from happening again.
24% of subprime loans were delinquent or in foreclosure in February 2008.
That was BEFORE people figured out you didn't have to pay, that the Congress would, in effect, cancel your loans.
What do you suppose the default rate will be in February 2009?
I posted this on another thread, but it probably bears reposting. Glenn Beck asked Mitt Romney to explain the bailout and I think Mitt did a good job of making things understandable.
http://www.glennbeck.com/content/articles/article/196/15555/
Just one more tax, honest, and everything will be fine.
Big difference between default and foreclosure. The 24% number needs to be clarified and my guess is the foreclosure rate is well under 10%.
I also believe given the opportunity people would rather keep the homes they bought rather then walk away and lose whatever they put in to the home.
Eternal society for the protection of Incumbency...
A Republic, if you can keep it...
Oh well, it was fun while it lasted.
Well said!
--Ludwig Von Mises
Just wait until Uncle Samuel is the nation’s landlord.
You think he tells us how to live now, wait until he owns our homes.
Laws hastily passed to deal with immediate emergencies tend to bring disaster. I pray that the congress critters continually load this thing up with so many earmarks and other goals that it becomes unpassable and/or must be vetoed. As it is, a “clean bill” for 700 billion must increase by 3 or 4 times in the course of its operation. That is all inflation and this process, this bill, is a recipe for a Weimar cake as a treat in the Depression.
I think the Administration and Congress have hired Mr. Robert Mugabe as their economic adviser.
This “bailout” in whatever final form will damage all classes except the bankers who already have their assets in gold and Cayman Islands.
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