Friday, August 31, 2007

On the Way: Your Mortgage Security Blanket



Bah. People shouldn't have taken the loans, and banks shouldn't have made the loans. Yet here comes (potentially) the "helping hand" of government:

USA Today: Bush: Let's Help Out Subprimers

Which is neat, because earlier this month we read that:

Forbes: Bush: No Bailout for Homeowners

Welcome to the United States, where responsibility is punished and ignorance and greed are continually rewarded.

Rule #1: Privatize the profits.
Rule #2: Socialize the risks.

Ah yes ... works every time.

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— Posted by Michael @ 10:33 AM








4 Comments:
 

can't wait to hear the details, but if someone "profits" off of this deal I'm gonna be quite upset. I got a 2 year ARM (I was a sub primer at the time) and have not missed a payment once. I've even got it budgeted to where we can afford the rate increase that's specified in our mortgage if we can't refinance. People need to be held responsible for their mistakes.

 

I'm actually quite sick of all the subprime stuff in the news. I don't agree with a bail out. People need to live with their decisions. Plain and simple.

 

Well, it's not like our dear leader is a model of fiscal responsibility himself; he can probably relate to people who borrow more money than they (or their grandchildren) can afford to pay back.

I don't think the government should go around bailing out subprime loan defaulters until everyone who's still living in a FEMA trailer—two YEARS after Katrina—has a real home to live in. Bah indeed.

 

You nailed it.

The business/investment environment of "winner takes all" is not new : recall the robber barons. What is new is this socialization of risk. I have never heard anyone quite put it that way before, it is brilliant, Michael. This is rampant everywhere. In the days of the robber baron, they accumulated millions but if they messed up, they lost. Today, hundreds of millions, even billions, are still being made by the top .5% of people, but if they mess up, WE pay. There is no risk for the greedy. We think that it is ok, because we see it as motivation and inspiration to to take risk and make big bucks.

This is really a travesty. I am just shaking my head.

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