I watched Hillary on Meet the Press this morning, where she outlined her stimulus package for when she becomes President (God Forbid). Among her items was to put a 90 day moratorium on foreclosures. Sounds good right, means that you get to live in your house for another 90 days while you catch up on your arrears. Except it won't work that way.
If she got the moratorium, what is going to happen to the debtor? Are they going to somehow magically come up with the money that they didn't have before? Or are they going to be saying that we got 90 days free rent babe!
And what about the mortgage holders? Do they get to suck up the 90 days loss of principle or interest just to be patriotic? What about their shareholders? Which probably won't be an issue, because as soon as it starts looking like this is what is going to happen, they will be bailing on any stocks that have financials in them. Which will reduce the amount of liquidity, which will reduce the amount of loans that they can make, which will reduce the new buyers who aren't reckless from being able to buy a house at a reasonable price. But at least she will be doing something! Right? Even though it will be made much worse.
One area that I predict that will increase in value will be companies like Best Buy and Wal-Mart. Watching Hillary on TV made me want to look for a large heavy object to cast in her electronically reproduced image. If she is elected, I don't think that I will be able to afford the number of tvs that I would have to buy.
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