Revolt on the trading floor…and maybe in your neighborhood.

If you didn’t see this yesterday, it’s fascinating to see CNBC’s Rick Santelli go OFF on Obama’s new mortgage bailout plan. Sure, there’s a lot of showmanship involved…but also a lot of truth in what he’s saying. Things get really good around :35 seconds.

When my wife and I built our house a couple of years ago, we agonized over just how “big” could we go. Rates were low. And with good credit, you could buy pretty much all the house you wanted. Remember the saying? “Get the biggest house you can possibly get…and you’ll grow into your mortgage payment!” That was the thinking back then. We received that sort of advice from several people we know and respect. So could we have upgraded to a bigger model? Added a sunroom? Two more bedrooms? Absolutely. The lenders would have written us the check, and we could have signed on the dotted line.

But that’s not what we did. And it’s a good thing we didn’t.

We went for a modest home that’s plenty big for the two of us. And it’s still one of the best things we’ve ever done. We still sometimes sit around our house and say to ourselves: “I can’t believe this is OUR home.” But lots of people didn’t take the safer route. They went for it..assuming that their salaries and house values would always increase. They bought exotic mortgages that allowed them to basically buy now and pay later. And now, they’re in a bind.

So now, the goverment is ready to step in to stem the tide of foreclosures…which sounds like a good thing, right? But see the bigger problem. You’re rewarding people for bad decisions. And at the same time, you’re penalizing all the people who made smart choices (92% of Americans are still making their monthly mortgage payment). And it’s all in the name of good government. It’s all in the name of “sacrifice” for the greater good. And it’s making a lot of people really crazy right now.

Wanna know just how bad things are gonna get? And wanna know some of the real reasons that our economy is melting down? Just exactly whose fault is it? More after the jump…

(more…)

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Published in: on February 20, 2009 at 5:26 am  Leave a Comment