May 30 2007
Subprime Quick-fix Will Make Crisis Worse
Hardly a day goes by without someone’s proposing how to make the bad situation in subprime mortgage lending even worse. Legislators at all levels of government are contending for ownership of the most destructive idea. (One example of a thousand)Finalists in this legislative race to the bottom include punitively stiff lending standards, foreclosure holidays and taxpayer-financed bailouts. I would like to propose a far simpler, fairer and effective course of action: let free people sort it out for themselves.
Sound a bit harsh? Actually, when considered in the context of the Great Global Credit Bubble, the choice really is between letting it sort it self out or compounding the problem so that the clean up is much worse down the road. You can get the full scoop from Stever Berger whose piece is quoted above.
Consider also:
- WSJ: “Subprime’ Aftermath:Losing the Family Home“.
- Bloomberg: Fed Sees Housing Damping Growth Longer Than Expected
- CBS Marketwatch: Mortgage volume decreases as rates rise
- Bloomberg: U.S. Home Construction Bust May Last Until 2011
- CBS Marketwatch: U.S. home prices fall for first time since 1991
- Bloomberg: U.S. Existing Home Sales Drop to Lowest in Four Years
