And you can take that to the bank
By DEBORAH SOLOMON (WSJ)Do you really think Bush would be doing any of this if the bankers and Wall Street highflyers who engineered this "crisis" didn't have their proverbials in the wringer?
"President Bush, looking for ways to respond to the subprime-mortgage crisis, will outline a series of policy changes and recommendations today to help borrowers avoid default ... to allow the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to guarantee loans for delinquent borrowers....
"And he will announce an initiative, to be led jointly by the Treasury and Housing and Urban Development departments, to identify people who are in danger of defaulting over the next two years and work with lenders, insurers and others to develop more favorable loan products for those borrowers.
""The president wants to see as many homeowners who can stay in their homes with a little help be able to stay in their homes," a senior administration official said. "We're not looking for an industry bailout or a Wall Street bailout.
"Mr. Bush also plans to announce that the FHA will begin charging "risk-based" premiums, a move that will enable the agency to help riskier borrowers since they can charge those individuals higher insurance rates. Right now, FHA premiums are a flat 1.5% of the loan, and the change would give the FHA flexibility to charge some borrowers as much as 2.2%."
And what kind of pissant crisis is it, anyway, when the Dow Jones Index is not even down a typical 10% correction?
(And the Market will Take Off when it opens later today - because THEY know who this bailout is really aimed at.)
Bush's Mainly Cosmetic Homeowner Rescue Proposals
Not to be cycnical, but this appears to be much more politics than policy, and a lifeline to the big investment banks on the last day the month and (some of their) fiscal years. I suspect hank Paulson had a major hand in the timing.
But a fix for what ails the system? Not even remotely close.