White House could unveil mortgage plan next week
By Margaret Chadbourn
WASHINGTON | Wed Aug 31, 2011 6:40am EDT
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While mortgage rates have been hovering around record low levels, banks remain stingy with lending although they are sitting on more than $1 trillion in excess reserves. Homeowners without a job or good credit histories have been essentially shut out of the refinancing process.
Some investors say the economic benefit of a government-encouraged refinancing wave would be minimal.
“It’s a political hail Mary. It’s unclear why they want to throw a monkey wrench into a $5 trillion market,” said John Kerschner, head of securitized products at Janus Capital Group in Denver. He said the net benefits for the economy are negligible, perhaps adding $20 billion to $30 billion “at best” to the U.S. economy.
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Old King Canute, aka BHO44, is trying to pick winners and losers again.
The Gooferment has nothing. All it can do is move “stuff” around. The “poor homeowners” are going to be the “winners” and the “rich bondholders” will be the losers.
In actuality, the winners are the politicians and bureaucrats. They will be rewarded by the lobbyists and the voters.
Aren’t these the same “bad assets” that we bought, or were supposed to buy, under one of the many TARPs?
Sorry, but wishing doesn’t make it so.
Any wonder why I’m a Gold Bug? Told you not to get caught in the bear trap (i.e., move to the “safety” of bonds from “risky” stocks”).
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