the wails of wall street

De facto President Bush and his Treasury have announced their little mortgage bail-out deal. And the sharks on Wall Street are crying about how this will bring about the collapse of the free enterprise system as we know it, or something along those lines.

But Steven Pearlstein puts it well in his column today:

Maybe they should have thought of that before they fought tooth-and-nail in recent years against rules designed to prevent predatory lending, or impose a modicum of oversight over hedge funds and derivatives markets, or hold investment banks legally liable for shoddy underwriting practices.

If Wall Street wants to find the culprit who undermined confidence in U.S. financial markets, all it has to do is look in the mirror.

Nicely put.

But Pearlstein isn't buying into any idea that Bush is doing this out of any concern for the plight of the working man. After all, subprime mortgage owners aren't Republican voters, so who needs 'em?

Nope - this is to save the collective asses of large investors, aka the elite aka the Republican base. And as Pearlstein writes, to maybe try Democrats from trying something.

In any case, I don't know how much it will help. Many of those subprime mortgage owners, who often put no money down, are still facing the situation where the balance of the mortgage is greater than their equity (if any) plus the resale value of their house. If housing markets stay soft over the next few years, their situation won't get any better - and they'd still face that day down the road when their interest rates and monthly payments balloon.

Many of them would be better off financially just giving the keys back and moving out now, rather than making payments for a few more years that may STILL not suffice to let them keep the home, and selling then anyway.