Sec. Paulson: Here Is My Mortgage Payment Information

So my wife asked me a question this morning. She asked, ” I just heard that the US government is going to take control over Freddie (FRE) and Fannie [FNM]]. Does that mean that we can discontinue paying our mortgage?” Well at first glance that doesn’t seem to be a great question, but since my wife asked it, I figured there must be some deeper meaning, so I thought about it for a while, and then realized she had a point. What’s the point you ask? We have officially buried the concept of individual responsibility.

The fact is that aside from terrible mismanagement ( Hey aren’t some of those credited with mismanagement actually economic advisers to Barack Obama?), the main reason that these agencies are on the cusp of bankruptcy is because of the whole mortgage market fiasco. There, as we all know, people who couldn’t afford to buy the homes they purchased, were bailed out by the government. Now the agency, that underwrote half of those mortgages is getting bailed out by the government. To me that means if you do something really stupid, have no fear, because it doesn’t matter, there will be no consequences to suffer because the ever present government will take care of you.

There is an article written by Matt Cooper ” Frannie Bailout: Private Profit: Socialized Risk” that has some interesting insight on the bailout. There happens to be a spot-on comment written by ‘lavalyn’ which says, “the complaint about “private profit, socialized risk” is simply that of moral hazard and double standards. If you or I were to open a business and lose our shirts the way the GSEs have, the banks would stop lending, and we’d probably lose everything… easily beyond shareholder capital.

This bailout is the taxpayer stepping in to cover for mistakes made, which is already dubious… and that’s before upper management taking in millions in bonuses, shareholders getting dividends… and them then not giving back. In the interest of “limited liability.” The GSEs have been riding the implicit (and now apparently explicit) government backing, while not giving the taxpayer/government any return for it.”

Bingo.

Anyway, since I don’t want to be the only sucker left  that makes monthly mortgage payments I am putting out a shout to Secretary Paulson, to contact me and take down my bank details to start making my monthly payments. Just one favor Mr. Secretary: Please make sure the payment is on time.

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