Just read here:
http://news.yahoo.com/s/ap/20071205/ap_on_go_ca_st_pe/mortgage_crisis
that president Bush has hammered out a plan to freeze mortgage rates on sub-prime mortgages for five years to stave off foreclosures. Why is the government interfering in this free market exchange?
People took out risky loans on homes they couldn't afford. Some banks and home lending firms wrote and approved extremely risky loans that they knew would be foreclosed on.
I say let the market let things sift out. The home lending firms that made these nutty loans will go bankrupt, and people who bought more house than they could afford will go back to renting as they should! Government intervention just encourages the behavior of risky loans and extravagant borrowing to continue. "The government will always come to our rescue!"
The mainstream press doesn't go into who will pay for the mistakes of the financially inept home buyers and knumbskull home loan companies. For those who know more about business and finance, who will pay for these five years of 2% fixed rate loans that banks can't make money on?