AP: Five-Year Mortgage Rate Freeze Looms. Congressional aides say the Bush administration has hammered out an agreement with industry to freeze interest rates for certain subprime mortgages for five years in an effort to combat a soaring tide of foreclosures.

This sounds like the most dangerous bit of fiscal sleight of hand in years — putting off the actual problem and utterly rewarding the people who were the most reckless in the mortgage bubble.

Americans who didn’t join the sleaze will pay those who did. It’s reprehensible, and it’s going to put this nation further into the national bankruptcy that already exists for all practical purposes.

Meanwhile, the local paper endorses this idiocy — and more. Sheesh…

I’m looking for safer places to put my money at this point than my own country. We’ve lost all common sense here.

4 thoughts on “Rewarding the Reckless, Pushing America Toward Insolvency

  1. Dan, I’ve followed your comments on this subject for years and on the last site you used to blog on I commented that the government will bail these people out at the tax payers expense and at the expense of future borrowers who will pay a risk premium.

    This is always what happens. If enough people do something stupid and enough money is on the line at the big banks/investors etc….the government will bail you out. Always has happened, always will.

  2. Oh one other interesting note. I live in WA state and our legislature just passed a law to help subprime market by allowing the home owner to defer their property tax (not pay it) to reduce their payment sometimes by $100’s per month BUT the State will collect 7% interest on this while the home owner lives in the home and will collect the balance owed when the house is sold. Nothing like the State putting a lien on your home!! Crazy and expensive.

  3. The WA approach actually makes sense to me, though it’ll just postpone some pain in several ways.

    BTW I can’t remember if you were among the people loudly proclaiming how wrong I was to suggest that there was a bubble in the first place…

  4. We just came back from vacation in st. martin. In the 4 years since we were there last the exchange rate has gone from $1 = 1.5 EU to $1.5 = 1 EU.

    I’m thinking turning my paychecks into euros after bills are paid might be a sound investment strategy.

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