These guys would have the entire U.S. and world economy burn if it means guaranteeing a reasonable return on their own investment. Everyone else in the world has taken huge haircuts and losses but they want us to believe that their investments are so morally sacrosanct that it is unthinkable to breach their contracts.
Look, I understand wanting a return on your investment. Who doesn't? What gets me though is this. Who hasn't taken a haircut since 2007? Main Street has with all those 401Ks and pension funds suddenly worth so much less. Same with government pension plans, state and municipal. Indeed even much of Wall Street has, certainly equity guys have. Yet even in lieu of today's arresting numbers-no job growth in August-9.1% unemployment, falling GDP estimates still bondholders are complaining about Obama's proposal to refinance mortgages for homeowners and give them some breathing room.
Today even the Fed has come out in favor of this. Of course the bondholders are still crying no fair and complaining that this move compromises the sacrosanctness of contracts. If it comes down to a choice between the U.S. and world economy one might hope we won't choose the bondholders.
In any case, the recent ideas the Obama Administration sound promising.
"The few items I’ve seen in the last couple of days about a possible national refinance stimulus plan look an awful lot like the other trial balloons the Obama Administration floats into the ether of the web from time to time to see how an unorthodox idea might go over. This could be one of the better ideas to come out of this White House, mostly because it doesn’t allow the advisers who believe in making the public jump through as many procedural hoops as possible to invent yet another one of those useless borrower vetting process that have doomed HAMP and all of the other recent mortgage relief efforts."
"There will be a massive pushback by political opponents and Wall Street. But I wouldn’t really worry about Wall Street. For all the howling that will go on about bond holders who are getting shafted, the top brass at our major money center banks will be secretly relieved that the government has helped them reduce the foreclosure rate and help shore up their balance sheets."