October 12, 2008

Quick, Get a Mortgage

The feds needs to move quickly to do whatever bailout they are going to do.

Here's why - whatever the form of the bailout, it is inevitable now that some form of debt is going to be written off, and the only way to get your slice of the $700b will be to have borrowed money.

This mostly appears to apply to banks right now, but if ideas like John Kemp's proposal to mark down all mortgages by 20% are taken seriously, then this dynamic affects consumers too: anybody without a mortgage will look like a chump when all mortgage lenders are forced to take a haircut. The only way to get a free $20k is to have borrowed $100k first. This logic even applies if the only form of haircut is dollar inflation and currency devaluation.

So if you want to act like an irresponsible bank and take advantage of the collapse, then - quick - get a mortgage.

It's insane, isn't it?

Posted by David at October 12, 2008 04:38 PM

Obama's proposal has the unintended consequence of everybody making no mortgage payment for the next 90 days. http://www.breitbart.com/article.php?id=D93POE7O0&show_article=1. I KNEW I should have borrowed more!

Posted by: Roger at October 13, 2008 02:15 PM
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