There are days when the fools in charge of our banks and our government do things so stupid and so short-term, you just have to shake your head in disbelief, and acknowledge the fact that we're run by monkeys. Monkeys trying to win the next election, monkeys trying to earn their next bonus.
This is one of those days.
Goldman Sachs' head Henry Paulson (oops, I mean Treasury Secretary) and the clueless Sheila Baier at the FDIC are due to announce a moral hazard toxic loan "bloodletting over amputation" plan soon.
This "keep your teaser rate" and "Vote GOP" plan would let people who stupidly got into loans and homes they couldn't afford keep their silly teaser rate (just until after Bush leaves office), and people who bought homes they could afford with fixed rate mortgages of course would get screwed in comparison.
Uh, two or three words come to mind:
MORAL F*CKING HAZARD!!!!
"Bank Failure" and "Class Action Lawsuits" also come to mind...
Treasury close to subprime aid plan
WASHINGTON (Reuters) - The Treasury Department is finalizing a plan with mortgage industry leaders that will hold interest payments steady for many subprime borrowers facing higher rates and possible foreclosure.
The mortgage representatives and regulators are focusing in on restructuring "2-28" and "3-27" subprime loans, which start with a fixed mortgage rate of up to three years but then reset to a much higher rate.