Wednesday, January 28, 2009

Ace Reporting

Part of the reason the country has as many issues as it does is because of generalized incompetence within our press corps(e). Case in point, Larry Margasak, Associated Press Writer, writing about bankruptcy based mortgage renegotiations:
The bankruptcy solution would not cost taxpayers money, as would mortgage modification programs that could become part of the government's huge economic bailout package.
The first claim, that the loan cramdowns won't cost taxpayers any money, is just delusional given the amount of bailouts. The second part, that a government bailout won't cost taxpayers any money, would require logic that has been tortured to an other-wordly degree.

Glossed over in the article is the fact that the law that is being pushed will make a house loan just another form of barely secured debt, similar to an auto loan. Given the chance of taking a bath on such a large loan, the home market will only lock up further when lenders up interest rates and tighten up loan qualifiers. Investors might be willing to go out on a limb with a loan for $5,000 of unsecured credit card debt; not so much with a 30 year, $200,000 home loan.

1 comment:

Marty Plumbo said...

Saying that something like this won't cost the taxpayer is either delusional or Doublespeak. There's no way an AP writer could be that misinformed after all.