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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (26049)	12/5/2007 6:02:09 PM
From: KyrosL	Read Replies (3) \| Respond to of 218306

Your friend got it all wrong. The main beneficiaries of this freeze, if it succeeds, will be the lenders, not the homeowners. First of all, the so called teaser rates are not 1% but typically one or two percentage points higher than standard fixed rate mortgages. More like 7 or 8%. Second, the best course of action for most of the subprime borrowers is to immediately return their houses to their lenders (the vast majority are upside down), get a rental for half the net cost of their present house and use the savings for a down payment on a fixed mortgage house five years from now, when house prices will most probably be lower than today. If Mr. Paulson and the politicians wanted to help those subprime borrowers, they would put in place a program to do exactly this. Of course, this best course of action for the borrowers will be very bad for housing, the economy, and the lenders.

To: TobagoJack who wrote (26049)	12/5/2007 7:11:49 PM
From: carranza2	Read Replies (2) \| Respond to of 218306

From a purely selfish standpoint, I love the Paulson proposal to death. It has no relief for lenders and holders of CDOs and other assorted garbage. None, pure socialism. Pure electoral politics. Yeeehaw! My SKF will get hit hard tomorrow as the weak panic but not later as the slow realization sets in that the lenders, CDO holders, and the rest of the 'poor folk' to which the Wall St. scamsters sold garbage to are screwed, screwed, screwed by this program. Perhaps their relief is in the fine print. Or sneaked in later, when no one is watching and euphoria is high. From a public policy standpoint, it sucks. It rewards imprudence, punishes the thrifty, sets a banquet for grasshoppers but kicks ants in the teeth. From a purely personal standpoint, I was scared to death that lenders and holders of the CDOs and other investment vehicles would be let off the hook. That would have led to a rational tanking of our financials short. I suppose everything is just fine now, huh?