So Stimulating

[rowyn]

I don’t particularly like any of the ideas aired in this article, but this excerpt just made me wince:

Bond markets have been buzzing lately about a Morgan Stanley proposal to loosen the mortgage-underwriting standards of government-owned Fannie Mae and Freddie Mac to encourage more refinancing and reduce monthly mortgage payments of homeowners. Morgan Stanley economist David Greenlaw says that could put $46 billion in the pockets of consumers.

He calls it "slam-dunk stimulus."

It is, in fact, such a slam-dunk stimulus that lax mortgage-underwriting standards stimulated us right into the current recession.  HINT: the cure for drug addiction is not TAKE MOAR. Also, the underlying problem with your pyramid scheme is NOT that people stopped investing enough money in it.

*headdesk*

Fortunately, the Treasury has already promised not to do it, although they didn’t give the real reason of HOW STUPID DO YOU THINK WE ARE?

Comments

[shockwave77598.livejournal.com]

I took a look at the refi now that the rates are down so low. My loathing for banks still hasn't been shoved aside (and probably never will after the attempted rape at the last refi in 2002). And I crunched some numbers and found I only have 7 years left on my note. So, heck with it - I'll stay the course.

[rowyn]

Yeah, mine'll be paid off in six years and it's not worth the hassle of refinancing to shave off maybe a point.

[tuftears.livejournal.com]

That seems like a bad idea, yes.

[rowyn]

I have no idea why that rumor persists. O_O

[minor-architect.livejournal.com]

You know, I'd find it rather refreshing if a government agency actually used those words to veto a really dumb idea. That might wake a few people up!

[rowyn]

*giggles* That would be pretty funny. :D

[alinsa.livejournal.com]

But remember! There's nothing wrong with the financial markets and nothing needs regulation!

... sigh.

[rowyn]

And even though the government bailed out Fannie, Freddie, and the entire rest of the financial industry (except Bear Sterns) -- they won't be there with another bailout! Nuh-uh not next time! 9.9