Diary

Moral Hazard

The New York Times is reporting that major banks are now engaging in “wholesale, unsolicited mortgage debt forgiveness”.  They are arbitrarily reducing the amounts which borrowers owe.  Special consideration goes to those who are at “high risk”, meaning, for instance, holding underwater option ARMs.  But why do I also think that this is another handout to the “disadvantaged”, who are anything but that under this administration?  It’s impossible to be sure that the banks aren’t playing favorites.  In fact, we can be sure that they are.

Here is a discussion on Zerohedge