Let Them Eat Subprime
So yesterday, the moronic Massachusetts congressman Barney Frank appeared on CNBC’s “On The Money” and dropped some bombshell information.
Folks, did you know that mortgage brokers actually held a gun to the heads of seven million people and FORCED them to take out negative amortization loans and adjustable rate mortgages? It appears so. Naturally, a federal bailout is necessary to help these poor “victims”.
Folks, if you don’t know what the word “adjustable” means, you may be better off renting for awhile. Moreover, a little logic would have come in handy: If interest rates were at 40 year lows, what’s the next direction you think they are going to go?
Yeah. I know. Everyone was taken in by shows like TLC’s “Flip This House” or whatever. I know programs like TLC’s are technically billed as “reality shows”, but there really is a big difference between what happens on TV and what happens in real life, as about 7 million people (to quote Jim Cramer) are about to learn. This isn’t going to be wrapped up neatly in 30 or 60 minutes.
Two positives that will be coming out of all this mess:
1) People are going to learn some very expensive lessons. The good news is, they won’t forget this lesson. They’ll be wiser and they’ll be warning others in the future.
2) Home prices will come back down to earth. First time homebuyers will have an easier time finding a house they can afford. Homeowner’s insurance will probably be cheaper too.
Trust the markets, not the federal government. That’s my motto.