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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (76173)	4/18/2007 9:11:15 AM
From: ChanceIs	Read Replies (2) \| Respond to of 306849

>>>Why is the government promoting interference and rewriting of valid financial contracts? That is most certainly not a government function and never has been.<<< This has been a sore point with me ever since the Enron meltdown and subsequent merchant generator crash. California Gov Gray Davis signed $40 billion in contracts and then proclaimed to the world his brilliant business skill and the worth he brought to California through these contracts. A year when spot prices had sunk he claimed he was pistol whipped into signing them and went to court to get them undone. At the end of the day the FERC voted 2-1 to uphold them. It was appalling that FERC even heard the case much less that one of the commissioners voted to break them. The great irony is that those contracts are largely back in the money for California and that Davis made a good move. There was total time correlation between Davis moving to break the contracts and the merchant equities collapsing. Davis really hurt the stockholders. We also have the case of the royalty payments in the Gulf of Mexico. The government signed contracts w/o royalty payments. Now that oil has gone up, it wants a bigger cut of the action. There was clearly something wrong there on both sides of the table. Still a lot of those contracts have been sold, and the purchasing parties will be hurt if the government changes the terms. Now we have the government stepping in to these mortgage loans. I think that it is a good idea to have predatory lending laws. This is a matter for the Dept of Justice to handle, and to throw overzealous lenders in jail. It is fine for Congress to write tougher lending standards, or authorize more regulators for loan examination and compliance. Getting in there and giving my tax dollars to relieve mortgagees no matter how foolish or duped is not Congress' job. It will only serve to undermine business principles. Lenders will have to charge more just in case the Feds intervene capriciously in the future.