The Miami Herald published a great editorial on the proposed federal bailout of subprime loans (Just wait; calls for a bailout will grow in the coming months.):
“Line up the suckers. The mortgage meltdown has produced many victims. The most sympathetic are the low-income folk who are losing their homes to foreclosure. Some Democrats want to help many of these unfortunate souls by having government refinance their loans. Ohio has led several other states in starting such programs.”
“It's a big-hearted response but not a good idea. Saddling the public with troubled loans simply adds taxpayers to the sucker list -- and bails out the lenders who should be left to fry.”
“Democratic emotions would be better spent pointing fingers at Republicans who refused to regulate the fast-buck artists pushing nasty loans on an unsophisticated public. House Financial Services Committee Chairman Barney Frank is now threatening to emasculate the Federal Reserve if it doesn't set humane rules for mortgage lenders. That's the way to go.”
“But government must not get into the business of bailing out people who can't handle their debt, even if they're poor. Burdening the public with bad loans is unwise policy. The taxpayers should not become suckers-of-last-resort.”
The Palm Beach Post reports on the state’s failed efforts to control property insurance costs:
“Calling insurers ‘greedy,’ an angry Crist departed from his mild-mannered demeanor Tuesday, pounding his fist on the dais of the Florida Cabinet and threatening legal action against any insurers who are not lowering property premiums as much as state law requires.”
“Crist's comments followed a Cabinet meeting at which he had questioned Insurance Commissioner Kevin McCarty about property insurance rate filings.”
“Instead of an average 24 percent cut to premiums predicted after a special session on insurance in January - the first match between the state and the industry - McCarty said 36 of 47 insurers were seeking rate increases, averaging 37.3 percent.”
There is more evidence that the housing bubble is really starting to affect the economy. The Miami Herald reports on consumer spending:
“Shoppers took a break in June, boosting their spending at the slowest pace in nine months as high gasoline prices and fallout from the housing slump made people think twice about buying.”
“The Commerce Department reported Tuesday that consumer spending edged up by just 0.1 percent. That marked a pullback from May's brisk 0.6 percent rise and was the smallest increase since last September. Incomes, the fuel for future spending, rose 0.4 percent for a second month in a row.”
Meanwhile, surveys on consumer confidence show that the housing bubble is having a more profound effect on Florida than the rest of the nation. The Miami Herald reports that Florida’s consumer confidence fell while the national average hit an all time high:
“Florida's overall consumer confidence index dropped one point to 81 in July, weighed down by perceptions of personal finance and U.S. economic conditions, the UF Bureau of Economic and Business Research report said.”
“Nationally, consumer sentiment rose to 112, its highest reading since August 2001. Both surveys interview people each month about perceptions of current and future economic conditions.”
“‘We attribute a large part of the decline in consumer confidence in July to the very weak housing market in the first and second quarter of 2007,’' survey director Chris McCarty said.”
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2 comments:
I will be outraged if the feds make any move to bail out all the F@cked Buyers.
Really, any efforts to do so won't really help the FBs. If they give replace their high-interest ARMs with low fixed rates, most still won't be able to afford it. To make matters worse, they'll still be locked into their over-priced homes. Most will be better off going into foreclosure.
Ultimately, a bailout will be a bailout for the banks and no one else.
There are too many voters who didn't fall for the Ponzy scheme fostered by realtors and bankers to approve a bail out. If you listen to the sob stories by these folks its hard to stomach the fact that they always blame someone else for their situation. I am certain that some folks were too trusting, but stupidity is sad but no defense.
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