September 3, 2007

No mortgage crisis

George Bush has announced a package of measures to try to combat the economic problems caused by the US sub-prime mortgage crisis. There was no mortgage crisis, just crisis among overly reactive investors. The number of those that were defaulting on their loans was insignificant compared to the total number of buyers who benefited from the last housing boom. I have not seen any crisis in and around my neighborhood. But if the government wants to bail out people, that's fine, but it will encourage many to pretend they are in default and that they did not understand the terms of the loan they signed a few years ago.

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