Now that I'm back home, I get to indulge myself in my morning New York Times again. A couple of front-page articles struck me as particularly interesting.
The first, U.S. Loan Effort Is Seen as Adding to Housing Woes, includes these nuggets (emphasis, where added, is my own):
The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.
Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.
“The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. “We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.”
It all goes back to what I've long believed – – – letting things run their course, although briefly very painful, is the best approach. All these cutesy little games, continuously kicking the can down the road, will simply lead to ruination. Nature Knows Best. Government perverts what should naturally take place, and it is an abomination.
The article also includes a graphic illustrating how the banks having been doing at modifying loans. Bank of America is a real doozy – out of 1,018,192 mortgages that are eligible for modification, B of A has permanently modified……..98 of them. Well, at least Ken Lewis got filthy rich in the process, bless his heart. We live in a nation of sheep, and people like Ken Lewis have absolutely no shame. Zero.
The other article – which also serves as a nation crystal ball for our own nation – describes how in Japan, unemployed people have resorted to living in coffin-sized "hotels." It seems a fitting companion piece, although Japan, now in its 20th year of a completely squishy economy, started off a heck of a lot better off than the U.S. when its woes began.
