the day the free markets died. what a sham. paulson should be ashamed of himself. free markets mean just that. he made all his money from it. what with northern rock and now this weeks debacle the central banks and treasury officials might as well have converted to communism. An Open Letter to the United States Congress: We, the undersigned economists, write to strongly advise against excessive new regulations or federal interventions as a response to current trends in the housing market. Market corrections have already begun, with financial institutions writing down bad debts and adopting new lending standards to avoid future foreclosures. Legislation to create new underwriting standards will reduce competition and restrict consumer access to credit. Additionally, efforts to bail out or shore up lending institutions create a moral hazard that would slow the adjustments required in the marketplace. Government solutions, as opposed to the current market correction, would create changes whose effects will linger long into the future. Legislative proposals have included expanding the role of government sponsored enterprises, mandating new underwriting standards, allowing bankruptcy courts to rewrite the terms and conditions of mortgage contracts, and expanding liability to those who securitize loans. These proposals would fundamentally alter the workings of the mortgage market, leaving consumers with fewer choices when seeking to buy a home and potentially increasing taxpayer exposure for bad loans. It is important to realize that the market for subprime mortgages has provided consumers with greater access to credit and new opportunities for home ownership. Current laws provide the necessary authority to address abuses that have occurred and, in light of recent market activity, lenders have already responded with tighter standards to avoid potential foreclosures. In fact, more than 80 percent of all sub-prime mortgages continue to be paid on time. Opposing excessive new regulations is important as the subprime mortgage market adjusts to existing market conditions. Access to such mortgages has provided more benefits than harm to consumers, and through market discipline, lending institutions are taking the necessary steps to address the problems that have emerged. Forcing taxpayers to bear the costs of this adjustment is unwarranted and reduces the incentives for financial institutions to correct past behavior. Additionally, new regulations or underwriting standards will restrict consumer access credit and hinder the marketâs correction. Sincerely, Michael Alexeev, Indiana University Charles W. Baird, California State University â East Bay L. Dwayne Barney, Boise State University John J. Bethune, Barton College Don Bellante, University of South Florida Samuel Bostaph, University of Dallas Bruce Caldwell, University of North Carolina - Greensboro Noel D. Campbell, University of Central Arkansas Bryan Caplan, George Mason University John Conant, Indiana State University Eleanor D. Craig, Delaware University Richard Ebeling, Foundation for Economic Education James R. Edwards, Montana State University â Northern Frank Egan, Trinity College Frank Falero, California State University Price Fishback, University of Arizona Arthur A. Fleisher, III, Metropolitan State College of Denver Fred Foldvary, Santa Clara University B. Delworth Gardner, Brigham Young University James F. Gatti, University of Vermont David E. R. Gay, University of Arkansas Erik Gartzke, University of California - San Diego Adam Gifford, Jr., California State University Micha Gisser, Rio Grande Foundation Charles J. Goetz, University of Virginia School of Law Peter Gordon, University of Southern California Gerald Gunderson, Trinity College - Hartford Frank Hefner, College of Charleston Robert Heidt, Indiana University School of Law â Bloomington David R. Henderson, Hoover Institution William D. Hermann, Golden Gate University Melvin J. Hinich, University of Texas â Austin Mark Hirschey, University of Kansas Steve Horwitz, St. Lawrence University James L. Huffman, Lewis & Clark Law School Thomas R. Ireland, University of Missouri â St. Louis Michael C. Jensen, Harvard Business School David L. Kaserman, Auburn University George G. Kaufman, Loyola University Chicago David N. Laband, Auburn University Deepak Lal, University of California - Los Angeles Philip LeBel, Montclair State University Dwight R. Lee, University of Georgia - Athens Bill Marcum, Wake Forest University Barry J. Seldon, University of Texas at Dallas Stephen Shmanske, California State University â East Bay William F. Shughart, II, University of Mississippi David E. Spencer, Brigham Young University Courtenay C. Stone, Ball State University Richard J. Sweeney, Georgetown University Thomas C. Taylor, Wake Forest University Clifford F. Thies, Shenandoah University Edward Tower, Duke University Leo Troy, Rutgers University â Newark T. Norman Van Cott, Ball State University Robert Whaples, Wake Forest University Gary Wolfram, Hillsdale College DeVon L.Yoho, Ball State University Stephen T. Ziliak, Roosevelt University Affiliations for identification purposes only. http://www.freedomworks.org/econletter/20071206.pdf
It'll be a long time before the TREND of more government intervention reverses. In the meantime, trade with the trend, and bet on the PPT to try everything possible.
We, the shortsellers, feel the intervention and subsequent hubris it has encouraged, is not good for our short YM positions, and feel it in the best interest of the US government, to let all homeowners suffer and die (so we can buy a new porsche) etc..
Intervention and bailouts will NEVER end until the US Gummint and financial system implodes. Unfortunately, we Americans don't have enough political courage nor sophistication to THROW THESE BUMS OUT.
And now he has to find a way to keep his wealth/power. Typical move resembling the axiom: capitalism for the poor--socialism for the rich.
Good lord these guys are against continued Government intervention, and for a free market solution. How is that being a Communist ? I had one of these guys in College, he is as free market as it gets.
What the fuck are you talking about? It's more than that. That has got to be one of the stupidest fucking posts I've seen today.