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I think not, but then aren't recessions, healthy positive reactions, anyway?
Are you speaking about the rate freeze alone or something more drastic down the pipe?
In either case, I would say no and a resounding no and explanations are forthcoming.
Recessions are actually good in the long run and should be more welcomed than they are perceived. Recessions clean out the "garbage" and "excess" in the economy. We need that more than ever in the credit markets. We need a strong dollar and a robust manufacturing base so we don't rely on communist countries supplying our toys, dog food, shrimp, etc.
A mortgage bailout is bad for several reasons: it sends a message that the US is just another country that toys with heavily socialist policies. It just feeds a heroin like addiction to credit. It also helps to devalue the dollar (and we don't have the manufacturing capacity for increased exports).
It's too big to be bailed out anyway. The S&L scandal is a cakewalk to this. The politicians just tell people what they want to hear, and few will actually benefit from anything. Too much congressional tape, and the country is heavily divided on it which puts legislators' jobs on the line.
Avoiding one now by cutting rates irresponsibly, in my opinions, prolongs the strong possibility of a deeper one in the future. It's sounds contrary, but RAISING rates might be just what we need to contract the money supply and increase the savings rate.
Of course, MANY would disagree, but those same people thought that massive consumption and borrowing was healthy for the economy, and look where we're at now.
Last edited by InflationNation; 12-11-2007 at 03:34 PM..
They become rentals and/or the foreclosure process is streamlined.
"Poor homeowner" is irrelevant in this. No one will be homeless as we'd have a lot of houses available for occupancy.
Money supply under contraction? I don't know about that.(To understand this, you must understand the foreclosure process) The Fed is running the printing press into overdrive.
Interesting.....how does streamlining the foreclosure process help or affect 3.5 million loans? What does that mean?
You want a recession. It is like childhood disease. Kill off all the weaker rug rats and improve the breed.
The problem is that the operators take advantage of license when offered. See the S&L debacle...and the present sub-prime/exotic mortgage problem. But it is crystal clear how you solve that. Just give the operators complete license. When that happens their good side will come out and all will be well.
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