Former Reagan Administration budget director David Stockman doesn’t seem to think too much of the Obama Administration’s proposal to refinance underwater homeowners at up to 140 percent loan-to-value and he shared his views at The Daily Ticker.
Says Stockman:
This is ultimately, at the end of the day, a bailout for JP Morgan and Wells Fargo. They’re the big writers of second mortgages and home equity lines. Those – and there’s two or three or four hundred billion dollars in the top three or four banks – are in great jeopardy in the case of of homeowners who have mortgages, that are primary mortgages, that are way under water on primary mortgages and are likely to default or throw in the keys at some point down the road.
Good point…
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This is the same David Stockman who invented “trickle-down economics” (an admitted euphemism for high-end tax cuts) and one of the architects of the wholesale sell-off of US assets (public and private) to foreign interests.
Remember that when Reagan took office, the US was still the world’s largest creditor nation (even after the financial fiasco that was the Vietnam war), but eight years later was the world’s no. 1 debtor.
The only motive I can see for Stockman here is that he isn’t on the payroll of the banks.
Same Stockman, but a different view of the world now…