Financial bailout: Senate approves bill
By Bill Allison Oct 02 2008 12:46 p.m.Details here, vote tallies here.
But does the bailout bill even address the underlying conditions that caused the crisis? Via InstaPundit comes this measured analysis of what went wrong that caused the need for the bailout:
Note that Mr. Paulson's proposal was not intended to solve the teaser-rate mortgage problem, either now or in the future. In the transactions that created the teaser-rate mortgages in the first place, both parties made bad decisions " the lender and the borrower. Mr. Paulson's proposal was not intended to help either. One of its unavoidable side effects, however, was to relieve lenders of the consequences of their bad decisions, while leaving borrowers to suffer the consequences of theirs. This made it politically less palatable.In addition, at least $500 billion more of teaser-rate mortgages are scheduled to reset over the next several years. In all likelihood, they too will go into default and become toxic waste. Nothing in Mr. Paulson's original proposal was intended to do anything about this next $500 billion installment " or, indeed, to prevent lenders from making more teaser-rate mortgages in the future.
When you read figures like this -- $500 billion of teaser-rate mortgages -- how do you track down the sources they're based on? Today I'll spend a little time taking a look at these underlying numbers.
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