CueBall no. 2 Says "We need lower interest rates..."
Is this really the best we can get, from the guy that cueball no. 1 (Paulson) picked to save America by buying up
horrifyingly rank piles of crap temporarily imparied mortgage securities:
"The best thing we can do as a country is to bring down mortgage rates so [homeowners] can refinance and get into long-term mortgages they can afford," Kashkari said, during a hearing of a subcommittee of the oversight committee underway now on the Hill.
"Congressman, I'm being very candid with you. As you know, the Fed has cut interest rates, but that has not led to lower mortgage rates because the markets are stuck," Kashkari said.
Dude, just this week, your boss said the markets didn't need the original "unclogging," that is, the removal of toxic assets, that you were hired to oversea, and which was the bait in the big, $700 billion Paulson bait and switch.
Now you're saying we need that?
I submit, Dr. Evil, that you either don't know what you're talking about, or you're trying to pull one over on the Congress. (In my home town, some wags call this "lying.")
I submit that the reason Fed cuts haven't led to lower mortgage interest rates aren't the the "markets are stuck," they're that everyone knows that houses are still selling for way too much, so that mortgages doled out are highly likely to become only slightly less toxic than the current crop of crap. As a result, lenders are asking for some big money. Well, let's rephrase that. It only looks like big money compared to the recent history of too-cheap money.
If you're looking for insidious reasons, I have heard (scary rumor) that nowadays, one needs to be able to prove an ability to actually pay off the mortgage, and worse yet (fascists!) they expect people to spend their own money on a house! Right up front, before you move in and get the free widescreen and granite upgrades and everything! They're calling it a "down payment," and they expect as much as 1/20th to a full 1/5th of the house price up front!
In America! Extortion is what I call it!
Mr. K.should do something about that, methinks, and maybe those lending markets would come unstuck. That, or just keep making up plausible sounding, systemic excuses, for the sudden, painful return to normalcy.