The Fiscal Corruptocrat follows the latest happenings with Wall St., the economy and corruption ridden governments.

Wednesday, June 24, 2009

Look Out! Barney Frank Is At It Again!

It doesn't take long folks.

While the US and the rest of the world are coming to terms with the depth and magnitude of the current economic downturn, Barney Frank is looking to see if he can reload the tube and torpedo any recovery yet to come.

It's no big secret that a major impetus to the latest changing of gears in the economic cycle was due to the massive over-extension of credit which resulted from relaxing lending guidelines from their traditional risk models. Essentially, the rules were loosened to the point where those who formerly didn't qualify for even a standard fixed rate/term loan were all of a sudden qualifying for complex lending instruments. This was due in large part to efforts from people like Barney Frank who 'fought for the little guy' to insure they could buy a home. I guess the key word here is 'buy'. They may have initially been able to buy a home, but 'owning' one wasn't in the cards.

The ink isn't even dry on the Notices of Default arriving at many of the 'little guys' homes now and Barney Frank is trying to get lenders (who, naturally in reaction to the utter collapse of their portfolios tightened guidelines across the board) to relax lending parameters on condos. In Barney's mind, gone are the days are saving up to put money down on a home. No longer should anybody have to work hard and try to piece together 20% of the purchase price of a reasonable home. It's so 1950's and doesn't buy you votes.

Will Barney's efforts get legs under it and be the 'Green Shoots' of the next housing bubble? Hard telling, but if history is any gauge it certainly looks good for Senator Frank and friends.

How soon we seem to all forget how these things happen.
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