Mortgage Bailouts? Country Bailouts? Will They Work?

As we begin the third consecutive summer with financial turmoil in Greece as well as many European Nations it begs the question, how many bailouts are enough and will any of these actually arrive at a satisfactory conclusion? As one occupying a desk in the Mortgage Industry for many years and of course being on hand to witness innumerable “Bailouts” designed to protect homeowners I must admit that the people who have devised these programs know nothing of my industry and its intricacies. If they had, perhaps one of the many might have been viable but in the end all I smell is ineptitude squared.

As I have stated before they certainly could and should have called me for advice but then that would have made sense and we all know that would not blend well with politics as it is becoming apparent that politicians sole goal is not to cure a problem but to sustain them hence the need for their great wisdom. If you have detected my obvious sarcasm you no doubt can hear my laughter as well.

But in all seriousness and indeed these are to be treated as such and do require viable solutions as opposed to band aids which are prominently being used as we speak. After all I can use a bailout myself as most of us could. But is it really a solution? I can assure you it makes no economic sense. Yes it might help me today but at what cost tomorrow. And who pays the price? That is the key question. No leader seems to want to address that issue aside from vague notions of “the rich”. France is already finding out where that leads. Under the new Socialist Regime, the rich in cheese land are moving across the channel. Didn’t see that coming did you socialists. They never do witness New Jersey and California and the exodus occurring from this taxation. So no friends it is not a solution.

The only true and workable solution is to allow the market to clear the excess. But instead we have thrown some $12 trillion at the problem and we still have the problem. Fascinating no?

HARP 2 is designed to help the underwater property owner and it has merits however not based on market principles. Aside from the infighting taking place amongst the Government and Banks I see value there and we do have programs which will actually help people. The Banks are taking a big risk and demanding a modest premium in rate which is only fair but the regulators are fighting back as usual. At least we have a viable tool for the first time in 5 years and are able to offer up some form of relief.

We must distinguish however between the two types of bailouts. Europe is simply put an example of overspending and the U.S. is simply and example of a housing bubble inflated by easy money.

Both need healing and both require a different cure as do all cancer treatments require different cures. As a Socialist Union the Euros are heading in the wrong direction as one would expect. As a capitalist nation one would expect us to go in a different direction yet the forces of Socialism are sucking us in to their rats nest and I assure all that is not good.

As stated earlier it might be good today but the ramifications for your progeny are consistent with rampant child abuse. Not to mention highly immoral. Do we have the will to do what is right? I think we do and I pray our leaders grow the brass that is required as opposed to hiding under their respective desks and hurling cheap shots of blame towards each other.

After all that is not what a true leader or statesman would do. I suppose we need a few of those as well my friends. I will keep my eye on the white horse and someday a real leader may arrive. In the mean time we are clearing the excess and I envision a very prosperous finish to the year and next year will be just fine for you all. Or so I shall wish. So stop the bailouts and let us conduct business under our old fashioned rule of law which is how we have prospered since our birth.

This article first published on Technorati under the same title.


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