It is a sign of exceptional intelligence to be able to answer a complex question at once. I take pride in my reply: I don’t know.
I don’t see how this addresses the underlying core problem, which is that we don’t know, and probably can’t even reliably guess, what the value of these houses are, what the “real” mortgage should be. And since these things have been bundled, we don’t know, and cannot guess, what the “real” value of those “securities” are.
Is 700 Godzillabucks a comfortable cushion, ample funding to eat the shit that must be eaten, or is it merely covering the “vig” so Luigi will have to wait until next week to break our legs? We don’t know.
What seems just about inevitable is that property values are going to decline, or fall, or plummet, or crater. This means that all those entities that rely on property taxes - school boards, county government, the minor vexations of governance - are shitting themselves most heartily. Schools? Libraries? Homeless shelters?
Generally, plans put together under conditions of panic, or to avert panic, are inherently weak. Clearly, the first goal of the plan is to avert panic, to move the mood towards “muddle through”, and away from “run screaming through the streets with our hair on fire”. If it succeeds at that, its probably a better thing than no thing. I guess.
And only the .gov can do it, nobody else is dumb enough to buy the lipstick on the pig in a poke. (Unless we were to rely on the solid and enduring patriotism of the investing class, their willingness to sacrifice for the greater good…What? Oh, tequila and bong water, why do you ask?..)
Until these bundled blunders are taken apart, and examined mortgage by mortgage, and the value established, we have no basis for judgment, and that won’t be any time soon.
I don’t know. I can only take comfort in the spectacle of the Pubbies transforming themselves into the People’s Republic Party, sworn enemy of the running dog jackals of the Wall Street fat cats, protector of the proletariat. Who knew?