mallarde

A Better Bailout

I do not like this proposal at all. rather than addressing The liquidity issue directly, it attempts to address it indirectly by helping the speculative home buyers. By propping up individual homebuyers, Mr. Arguello believes he would shore up the securities that their mortgages underlie.

this is questionable. Also, it would take time for this to play itself out. In the mean time the securities would still be illiquid -- there would be no market for them.

With regard to assisting speculative homebuyers, I have a moral issue with my money -- I should say more of my money since my tax money already subsidized their speculative investments -- assisting these irresponsible, shortsighted people.

And where does Mr. Arguello come up with the 50% figure? That is not a very high hurdle for a mortgage borrower. Is the taxpayer to pay for 50% of the speculative investors house?

What is too seldom stated publicly, the vast majority of people that are in trouble with their mortgages are not in trouble because they were laid off. This is why the present situation is different from the Great Depression. Today, people are in trouble because they never were capable of paying off the loans they entered into. They were irresponsible and entering into them, and I do not want to help them now. As a life long renter due to spiraling prices, bailing out speculators now would be very ironic on a personal level.