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Old 11-30-2007, 01:50 PM
PairTheBoard PairTheBoard is offline
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Default Paulson\'s Plan to Freeze Mortgage Adjustments

Can someone explain to me where the Treasury Department has the power to enforce such a plan without an act of congress? These mortgage rate adjustments are terms of legal contracts. How does the Executive Branch assume the power to just step in and by fiat order a change of terms in private contracts?

PairTheBoard
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Old 11-30-2007, 01:55 PM
Jimbo Jimbo is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

Wow, this is such a complex topic! I'll make it simple with one word, VOLUNTARY.

Jimbo
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Old 11-30-2007, 02:00 PM
spider spider is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

"Plan" in this case probably means literally that, or maybe more literally "proposal". Every year, the administration releases a new budget but that is just a suggestion for the Congress.

In some years, Congress actually takes it seriously as a starting point for legislation (for example the 2001 tax cuts). Other times, like when Congress & Admin are controlled by different parties, it's pretty much ignored.

FWIW, this "plan" makes no sense to me. Also, I'm amazed that for all the talk about what to do, no one really seems to be acknowledging that housing prices are just too high and need to fall. Probably a case can be made that having them fall slower is better than having them fall faster, but still...
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Old 11-30-2007, 02:33 PM
PairTheBoard PairTheBoard is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

[ QUOTE ]
Wow, this is such a complex topic! I'll make it simple with one word, VOLUNTARY.

Jimbo

[/ QUOTE ]

The way I hear them talking it sounds like something more than voluntary being proposed. No one could object to voluntary which would be mostly meaningless anyway. What Paulson is proposing evidently has enough teeth to have gotten the market pretty excited about the financials today.

PairTheBoard
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  #5  
Old 11-30-2007, 02:38 PM
Jimbo Jimbo is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

[ QUOTE ]
[ QUOTE ]
Wow, this is such a complex topic! I'll make it simple with one word, VOLUNTARY.

Jimbo

[/ QUOTE ]

The way I hear them talking it sounds like something more than voluntary being proposed. No one could object to voluntary which would be mostly meaningless anyway. What Paulson is proposing evidently has enough teeth to have gotten the market pretty excited about the financials today.

PairTheBoard

[/ QUOTE ]

Well he met with the top bankers suggesting a voluntary freeze, that is all there is to it. These days the market needs very little news whether real or imagined to soar or drop like an anchor.

A good example is the fact that AT$T and apple will release a 3G version of the I-Phone early next year. This was already common knowledge yetwhen a newspaper published it RIMM dropped from $124 to almost $112 today. Hardly a rational percentage change on this projection.

Jimbo
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  #6  
Old 11-30-2007, 02:38 PM
SenatorKevin SenatorKevin is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

Obviously the details havne't been disclosed yet. I've heard this option could be available for people who have not been delinquent on their payments and would allow you to freeze your rate for upto... 7 YEARS!!!! Utterly ridiculous. This would only prolong the problems and create even more unfordable housing.
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  #7  
Old 11-30-2007, 02:40 PM
Groty Groty is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

Moral suasion?
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  #8  
Old 11-30-2007, 02:52 PM
PairTheBoard PairTheBoard is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

[ QUOTE ]
Well he met with the top bankers suggesting a voluntary freeze, that is all there is to it. These days the market needs very little news whether real or imagined to soar or drop like an anchor.


[/ QUOTE ]

How do those top bankers voluntarily freeze rates on mortages infused in fixed income bundles held by a broad world wide spectrum of investment fund entities? Are the top bankers going to volunteer to eat the interest rate differential they are volunteering away for the investors who actually hold the mortgages?

PairTheBoard
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  #9  
Old 11-30-2007, 03:01 PM
Jimbo Jimbo is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

[ QUOTE ]
[ QUOTE ]
Well he met with the top bankers suggesting a voluntary freeze, that is all there is to it. These days the market needs very little news whether real or imagined to soar or drop like an anchor.


[/ QUOTE ]

How do those top bankers voluntarily freeze rates on mortages infused in fixed income bundles held by a broad world wide spectrum of investment fund entities? Are the top bankers going to volunteer to eat the interest rate differential they are volunteering away for the investors who actually hold the mortgages?

PairTheBoard

[/ QUOTE ]

Guess you missed my main point, it is an idea, not a substantative solution with an effective means of accomplishing the stated goal. That is why I said the market rose without any solid reason other than hearing something they wanted to hear.

On a side note this is why David Sklansky is wrong anout the general market being more right than someone who analyzes a stocks value with total disregard for it's price but he always wants to talk about bookies and football lines rather than admitting his mistake.

Jimbo
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  #10  
Old 11-30-2007, 03:53 PM
eastbay eastbay is offline
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Default Re: Paulson\'s Plan to Freeze Mortgage Adjustments

[ QUOTE ]
Can someone explain to me where the Treasury Department has the power to enforce such a plan without an act of congress?

[/ QUOTE ]

They don't, and are not proposing to.

eastbay
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