I think your idea that originating banks hold mortgages for 5-6 years before resale, a good one. The solutions to this crisis are simple, imo. Impose responsible monetary policy at the FED. Save that, no moral hazard bailouts for anyone. Save that, pass simple legislative one-liners - like the 5-year hold on mortgage paper - as an effective backstop against reckless underwriting, and attendant RE bubbles. At the end of the day, it all comes down to Moral Hazard. Assuming we keep the FED, no bailouts for anyone, under any circumstance. Capitalism would take care of the rest. But this isn't Capitalism, as I've learned.
Well, of course. Probably wouldn't need 5-6 years... maybe 3 would be enough. The bank underwriter should have some "skin in the game"... not be allowed to simply clerk a loan app, collect fees and points, then dump the poorly qualified loans onto FNMA [aka, US Taxpayer]... NONE of this despicable practice was devised by the banks... BUT BY CONGRESS AND ALL ADMINISTRATIONS SINCE AND INCLUDING CLINTON'S.... banks and mortgage brokers simply took advantage of greedy government and bad policy.
No shit, Sherlock. Milton Friedman hit the nail on the head years ago when he said, "(1) The Fed should be abolished, and (2) it should be replaced by a computer which increases money supply by about 2% per year... enough to accommodate population growth. Then, let capitalism be capitalism to sort-out winners and losers".... Look how far we are from that now.... THE BASTARDS!!
Oh, I'm not that smart! Besides, for a guy with such thick-skin, I thought you'd enjoy a little 'ribbing'. You know I got love for you, mang.
Actually, I don't have a thick skin. I figure that those who can't recognize a little wisdom as offered... should be put on ignore. I don't presume I'm automatically correct about anything, but I don't respond the the "you're stupid" retort, either.... you want to disagree with me? Make your case... name calling ain't enough.... Partisan slant isn't enough...and stupid, to boot. (BTW, I graduated Summa Cum Laude in hard science... so I like to think I'm not easily BS'd... You ever seen a college diploma with "Summa Cum Laude" on it? I've never seen one but my own.... Chemistry, if you're curious.) And, what's a "mang"?
Stupid? Disagree? Neither. I think you misinterpreted my Lol. You came across hostile in the other post. My response was to laugh it off. Nothing more or less. Nobody is bs'ing anyone. "Mang' is the Mexican (illegal) phonetic pronunciation of "man". A friendly gesture, given context.