Right now, with people still talking about the five year mortgage rate freeze, recession talk is looming. While the Bush Administration and others insist that the mortgage rate freeze will give us an “economic soft landing,” others aren’t so sure. MarketWatch’s Paul B. Farrell points this out about the whole mess:

What are they still smoking? Reminds me of Viking King Canute sitting on his throne at the shore commanding the tide to stop. Folks, tides and recessions come and go. And wishful-thinking, fairy-tale solutions won’t stop the inevitable, any more than proclaiming this plan will “ease the damage of the recession,” but it’s “not a bailout, nor a silver bullet.”

The fact of the matter is that a recession is coming. There are some things you can do to protect yourself from a recession, but for the economy, it’s coming. And, to tell the truth, the “not a bailout” is really for Wall Street.

There was a time when investors realized that shaky investments (like iffy debt on junk subprime mortgages) meant more risk. Now, though, the government is ready to bail out Wall Street investors as the risk catches up to them. And the mortgage lenders are getting help as well. They may have hemmed and hawed about how they wanted a short mortgage freeze timeframe, but the main thing is that they have managed to forestall foreclosure on loans they shouldn’t have made in the first place, ensuring that for at least five more years the money will keep rolling in. Farrell makes this point:

It’s almost funny. Supply-siders pretend to trust the free market to work out problems. Yet the elite of the conservative free-market supply-siders on Wall Street, at the Federal Reserve and (except for the Veep) in the White House, pushed for and got government intervention to minimize mortgage credit losses created by Wall Street’s excessive greed.

Tags: mortgage rate, mortgage rate freeze, home mortgage loan, recession,
Wall Street bailout, subprime loans, mortgage recession

Tags: home mortgage loan, mortgage rate, mortgage rate freeze, mortgage recession, recession, subprime loans, Wall Street bailout