As Always, the Oligarchy Writes the Rules

Wall Street engaged in a little premature celebration over some kind of “bailout” plan coming out of the offices of the moronic monkey.

I, of course, wasn’t doing any celebrating. Nobody should have. I knew what was going to happen, because I’ve seen it all before.

Who wrote the Medicare Prescription Drug law?

Who wrote the bankruptcy law?

Yes indeedy. Why did anyone think that any “bailout” of homeowners would be any different?

As you can see here, the “bailout” is nothing more than a last-ditch measure to protect the value of the securities these mortgages got folded into, and sold. It does almost nothing to address the fact that more and more people are going to find their housing unaffordable when the next hike in rates comes. And right now, if you can afford your mortgage but can’t afford your car insurance, or your medical bills, or your car payments? Tough.

That Wall Street euphoria will die out pretty soon, as the dollar continues to sink like a stone and more and more people find themselves unable to afford their homes. The craziest thing about this “crisis” is that the interest rates on these loans are unjustifiable economically. There is absolutely no rational reason to jack rates up to 15% on a 30 year loan. To do so (1.) ensures the insolvency of a lot of borrowers, and (2.) ensures a drop in the value of property as more and more foreclosed homes enter the market. The idiots that think up these formulas are guaranteeing massive losses and overall failure of the economy. They should have known it years ago-and yet they persisted. They surely should know it now-AND YET THEY PERSIST.

What in the hell do we teach in MBA class these days anyway? That the quarterly bottom line is all that matters, and to hell with the next quarter?

Chimpy had what amounts to one last chance to not fail at something, and he blew that too. Years from now, Hoover will look like a visionary in comparison to the greedy stupidity of the moronic monkey and his cronies.

At least one thing is clear about President Bush’s plan to help people trapped by the mortgage meltdown: it is an industry-led plan, not a government bailout.

Although Mr. Bush unveiled the plan at the White House on Thursday, its terms were set by the mortgage industry and Wall Street firms. The effort is voluntary and it leaves plenty of wiggle room for lenders. Moreover, it would affect only a small number of subprime borrowers.

The plan was the target of criticism from consumer advocates who said its scope was too narrow, and from investment firms, who said it went too far. Others warned that the plan, by letting some stretched homeowners off the hook, could encourage more reckless borrowing in the future.

“The approach announced today is not a silver bullet,” said Treasury Secretary Henry M. Paulson Jr., who hammered out the agreement. “We face a difficult problem for which there is no perfect solution.”

The heart of Mr. Bush’s plan is a cautious attempt to help troubled homeowners by persuading financiers to freeze mortgages at low introductory rates for five years, but without actually forcing the hands of lenders and investors who hold the mortgages.

One of the financial industry’s lead negotiators estimated that at most 20 percent of subprime borrowers whose payments will increase sharply over the next 18 months - 360,000 out of 1.8 million people - would qualify for rapid consideration of a special five-year freeze on interest rates.

The number of people who actually obtain help would be smaller, because each borrower would face tests aimed at weeding out those considered too hopelessly in debt and those who make too much money to justify relief.

In one curious twist, the plan could eliminate many who have good credit scores or managed to improve their credit scores, because the good ratings would be a sign they do not need help.

“Talk about moral hazard,” remarked Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee. “We’ve all told people, don’t go any more deeply into debt. Now we’re saying that people who go more deeply into debt will have an advantage over people who don’t go more deeply into debt.”