Friday, September 19, 2008

A Stupid Idea... From a Stupid Man
Anyone can make a mistake. It's a quite natural part of being human. But it stands to reason that once you make a mistake, you stop doing it. It takes a real idiot to keep doing whatever you were doing wrong.

Treasury Secretary Henry Paulson announced plans Friday to quickly set up a "bold" government program to take over troubled mortgage assets from financial institutions, along with other efforts to step up the purchase of mortgage-backed securities. "The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy," Mr. Paulson said in prepared remarks for a press conference.

More immediately, Fannie Mae and Freddie Mac -- which were taken over by the government earlier this month -- will increase their purchases of mortgage-backed debt, he said. To facilitate that effort, Treasury will also expand the MBS purchase program it announced earlier this month.

Fannie Mae and Freddie Mac are the ultimate source of the problem. By providing a ready market for mortgage loans that were made to people who could not afford them, and secured by houses that were overpriced in the housing bubble, Fan and Fred created this problem. Washington players like Franklin Raines and Jamie Gorelick made fortunes while overseeing this mismanagement.

So why the hell are you expanding the activities of Fan and Fred in the mortgage market? We need to get both of those companies out of there.

Mr. Paulson, why don't you try giving some consideration to those of us who did NOT purchase more house than we could afford? Those of us who did not take out mortgage loans that we had no hope of repaying.

And what about those of us who do NOT work for Goldman Sachs or Morgan Stanley?

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