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Subprime Bailout: New Proposal January 31, 2008

Posted by pf in Expenses and Savings.
Tags: , , , , , ,

I just read about a new subprime bailout posted on CNNMoney.com. Essentially, what is being proposed is the creation of a Homeownership Preservation Corporation that would buy mortgage securities that are collaterlized with at-risk, subprime loans.

The kicker is that to get this fund going, it would require $20-25 BILLION dollars from taxpayers to get it going.

I’m sure it’s in the early going yet, but I see no reason whatsoever for government intervention…and especially not with taxpayer money. NONE.

Here’s the link:

New $20B subprime bailout on the table



1. bonds7 - February 1, 2008

On January 18th 2008 Bill Ackman wrote a letter to Moody’s and the S&P regarding the monolines. Here is point #8 of Bill Ackman’s Letter to Rating Agencies Regarding Bond Insurers:

I encourage you to ask yourself the following question while looking at your image in the mirror:

Does a company deserve your highest Triple A rating whose stock price has declined 90%, has cut its dividend, is scrambling to raise capital, completed a partial financing at 14% interest (now trading at a 20% yield one week later), has incurred losses massively in excess of its promised zero-loss expectations wiping out more than half of book value, with Berkshire Hathaway as a new competitor, having lost access to its only liquidity facility, and having concealed material information from the marketplace?

Can this possibly make sense?


2. jwojdylo - September 24, 2008

This issue will continue to get worse and worse. I just hope that the government is smart enough to let these mortgage companies fail


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