The Observation Deck

The solution to the housing bubble is obvious to the Obama administration: Another housing bubble:

http://money.cnn.com/news/newsfeeds/art ... H41001.htm

This is nothing in comparison to the huge Government Bubble they're creating.

I myself, have put in to become his new Czar - Czar. I want to be appointed as the head czar of all the other smaller czars. What the heck, it looks to be a real growth industry. I wonder if Baldwin Wallace offers an MCA - Masters of Czar Administration.

This is great news if you are one of those stuck in an ARM at 11% interest and can’t refinance for some reason (and the bank hasn’t taken your home yet). However, if you’re a homeowner looking to “cash out equity in your home” (as one radio commercial describes it) then you should be turned away.

Thinking about this for a moment, these people who are in ARMS or interest only loans or are upside down or have had their house foreclosed are the very same legacy (formerly toxic) assets that nobody wanted to buy. Under the Tim Geithner plan, these legacy assets were sold for bargain prices and you had to put up only 7.5% of the purchase price with the remaining guaranteed by the government. Now these legacy assets will, most likely, be refinanced by Fannie (also guaranteed by the government). Under refinancing, the guy who bought the legacy asset will see 100% of the principal paid, even though he might have paid 50 cents on the dollar only three months ago. (500-600% profit...not a bad payout for a few months of “work”)

Where was Fannie three months ago? Banks would not need to have taken such a huge hit if Fannie was there.

economic "growth" will be severely hindered when so many consumers are formally bankrupted. they can't just keep borrowing money like Michael Jackson or Donald Trump.

This is obviously an option weighing the cost of the program against the reduction of "growth" were this program not enacted.