Bush signs massive housing 'relief' bill

[brian0918]

Bush just signed into law a massive housing bill that includes the following changes:

• Grants Fannie Mae and Freddie Mac a virtually unlimited line of credit with the Treasury Department
  
• Creates an agency to regulate those two companies
  
• Increases the national debt ceiling to $10.6 trillion
  
• Grants tax breaks of up to $7500 for first-time home buyers
  
• Sets up a $300-billion fund under the FHA to help distressed homeowners get govt-backed mortgages
  

Edited July 30, 2008 by brian0918

[K-Mac]

I particularly love how they're setting up a government entity to oversee another government entity that was a bad idea in the first place. According to the government, two wrongs do equal a right.

And kudos to Bush for dropping his veto threat and caving in on this bill. I'm sure he didn't want to tarnish his reputation by doing something good for the country this late in his term.

[Scott_Connery]

And the responsible get to foot the bill for the irresponsible...again. Where is the percentage in making sound decisions in this country anymore?

Why not just buy a house you can't afford, and then collect handouts when you can't meet the payments?

[softwareNerd]

Fund Manager Robert Rodriquez writes about this bill, in his recent communique, entitled "Disgusted and Betrayed".

He conveys his disgust thus:

Our feelings run the gamut —stunned, disgusted, betrayed, cheated and abandoned. So what can we do now? We know that we cannot control the higher expected taxes, the likely increase in inflation, and slower economic growth that will certainly result from this irresponsibility. What we can control is our resolve to remain true to our investment discipline, our resolve to continue to play by the "rules" in spite of what others do, and our resolve to keep the protection and growth of our client and shareholder assets paramount in our thinking.

When I read that I was conjuring up the image of John Galt, telling him he had one other option.

He lists what he would like to see happen with Fannie and Freddie, instead of this bill:

• All shareholders (common and preferred) and subordinated debt holders should experience the first losses for any deterioration in business.
  
• Replace the boards of directors and senior management due to their apparent mismanagement and lack of oversight.
  
• In their current legal form, they should not be allowed to make political contributions. The conflicts of interest are too great.
  
• Do not allow these companies access to government financial support other than a 5-year transition period during which the existing senior debt would be guaranteed, but new debt issued would have neither the explicit nor implicit guarantee of the U.S.
  
• Their capital requirements should be substantially higher than at current levels, and they should be regulated as other similar financial institutions.
  
• If they are nationalized, a solution which we would not favor, they should be consolidated into one Federal agency and their debt should be included as part of the national debt. The American public deserves full transparency.
  

I think he does not far enough, but is definitely in the right ballpark. Edited August 10, 2008 by softwareNerd

[Zip]

I really really wish your government would let this implosion happen already!

I mean it's like watching a car accident in slow motion. It's going to happen, it's going to hurt but for the love of reason just get it over with already!!!

[LiberTodd]

God dammit, and just when I was starting to think he was an OK guy for lifting the ban on offshore drilling.