Santa or Satan Follow-up

Dr. Evil Lender Will Fight For His Rights

See my previous post on George Bush and the Meltdown from December 19, 2007 to get yourself up to speed. I'll wait...

OK, done? Good.

Here's the thought for the day: If these contracts between lenders and borrowers, which are completely legal, can be modified by the coercive force of the U. S. Government, what will stop Uncle Sam from sticking his nose into other contracts? Once he gets a taste of this, how likely is it he will back off and not use this power again? I think it would prove too tempting for our pandering politicians on Planet Washingtron to resist. Looks like it could be a slippery slope, but wait...

If in theory, in some "pretend" world, there was a conflict in which you pitted the interests of maybe 1% of the population that had no money due to setbacks in the world of real estate versus the interests of the biggest muli-billion dollar, multi-national banks on the whole planet...Who do you think would "win" that conflict?

My betting money is on the banking lobbyists and the attorneys retained by the mega-lenders. Freezing ARMs at teaser rates for 5 years sounds good while trying to round up voters, but won't do anything good for the banks. I am sure highly effective lobbyists are out there even as you read this, greasing palms and negotiating to prevent anything from happening that might harm the interests of the lenders. The banks' super-nerd attorneys are burning the midnight oil preparing constitutional challenges, etc. to anything that might unwind these deals. My goodness, man! There are CEO stock options, golden parachutes and whatnot at stake here! We can't allow these deals to go bad! No, the Clintonian (and other campaigns) sound bites will turn out to be just sound bites. The only reason to make "stick up for the little guy" noise is to get his vote. Their words will get them elected, after that they will be "safe" from the voters and do what they need to do to keep the corporate contributors happy.

PS: If they DO get these loans frozen, it's gonna get even harder to borrow money. What lender wants to lend money and have Uncle Sam be ready, willing and able to come in and destroy their profit?

PPS: What problems would occur if the US government set precedent by doing this and decided it was therefore OK to stick his nose into other legal contracts? Discuss amongst yourselves.