[adios]

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.... Are the Bush and Democrats main concern really about helping a small percentage of struggling home borrowers?

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They're worried about a contagin i.e. a downward spiral in home prices. I think it's also a recognition that the market for lending was not regulated sufficiently (that probably will get some responses). As to the morality of a bail out, the government bails out people all the time. As to the politics, if the Republicans are opposed they look bad IMO. The MBS markets have seen securities take a huge hit and it's not just junk that's taking it. I find it interesting that the government made Fannie Mae and Freddie Mac cut back on the leverage they use and we see this devastation in the MBS markets after that happens (not immediately though). Agency paper has held up fairly well for an obvious reason, the implied backing of the government. This, if enacted and depending on what's enacted, will probably help non agency paper alot.