Let's re-inflate the bubble!
Jackasses. Not only is it a stupid idea on the merits, but even if they don't do it, and they shouldn't, when people hear this kind of stuff they believe it and if they're looking to buy they wait to see what happens, further eroding the market in the short-term.
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/03/AR2008120302889_pf.html
The Treasury Department is strongly considering a plan to intervene directly in the mortgage industry to dramatically force down rates and stimulate the moribund housing market, according to sources familiar with the proposal.
Under the initiative, the Treasury would offer to buy securities that finance newly issued loans for home purchases, according to the sources. But to participate in the government's program, mortgage lenders would have to set exceptionally low interest rates, for instance, no more than 4.5 percent for traditional, 30-year fixed-rate loans.
These securities would be purchased primarily from Fannie Mae and Freddie Mac, the financing giants that buy most mortgages from U.S. lenders, according to sources who spoke on condition of anonymity because the plan has not been finalized.
The cost of the plan and source of funding remain unclear. One possibility is for the Treasury to raise money by issuing bonds to the public at 3 percent interest. This could allow the government to turn a profit because it would be buying securities that pay 4.5 percent.
At a meeting attended by the Treasury's Interim Assistant Secretary for Financial Stability Neel Kashkari and the National Association of Realtors in mid-November, senior Treasury officials said they were optimistic that subsidizing lower mortgage rates with taxpayer dollars would help revive the housing market, sources said.
Jackasses. Not only is it a stupid idea on the merits, but even if they don't do it, and they shouldn't, when people hear this kind of stuff they believe it and if they're looking to buy they wait to see what happens, further eroding the market in the short-term.
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/03/AR2008120302889_pf.html