Sunday, December 2, 2007

Bush IS the worst....Hillary WILL BE the worst.

It's funny that on a day when Venezuela voted to become communist, the US took one giant leap towards it as well. At least Venezuela had a referendum on the matter. The US is becoming communist and nobody was even asked.

Hillary has proposed her own mortgage bailout legislation that is simply amazing in its anti-capitalist fervor. She wants to

a) freeze rates on ARMs just like Jorge Arbusto wants to do

b) stop foreclosures, yes stop the ability of a bank to foreclose, in another words provide deadbeats with free housing

c) ban investors from suing for the losses this will lead to

So my question to Jorge and Hillary are the following

1. Will this be retroactive? That is if someone's ARM adjusted last month, do they get to go back
to the 1% intro? How will you deal with the people who had their loans reset a month ago who are pissed off they just missed the cut? What about the anger from people who got fixed loans? Or are you assuming Americans are so stupid they won't catch on?

2. Have you thought of the unintended consequences? Of course not. You only think of how to buy the next vote. Here are a couple off the top of my head:

- mortgages will become almost impossible to obtain from now on
- the value of a contract in the USA has just been invalidated since it now is obvious that the
government can step in and modify a contract at will

3. Can you point to 1 government program over the past 50 years that worked as planned? What makes you think your schemes will be any different?

4. Will you be forgiving credit card debt next? After all your logic would dictate you should.

5. Do you really think this will do anything to help someone making $20K a year afford his
$720K house?

6. How will you administer this scheme? Do all loans get re-amortized? What about neg-option ARMs? Where does the new principle get tacked on two? What about I/O loans? Do they stay I/O forever?

7. Will this apply to all homes including vacation and investor homes? If no why not? If yes, do you really think it's fair to tax some people in order to subsidize ski condos and beach houses for other people?

8. Are you aware of the vast amount of fraud committed with regards to mortgages? Thousands upon thousands of documented cases out there where people outright lied about their income to get a mortgage. So even if you freeze the rates, these people can't afford their mortgage. See $20K worker owning $700K home. Doesn't matter is the interest rate is 0%, he's foreclosing.

Hillary and Arbusto have of course not thought of any of these issues. This is political and nothing else. It will do nothing to stop the crash. It may slow it down for a few weeks at best. It will squander billions of taxpayer dollars which is what Democrats and Republicans do best.
At the end of the day there is a recession coming. It's more or less already here. Freeze rates, adjust rates, hell lower rates. It won't make a bit of difference. When you lose your job and have $0 savings as most Americans do, it won't mean shit.

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