What about the renters?  As we rush to reward those that, for good reason or bad, cannot make their mortgage payments, I have to really sit and think for a moment.  I mean, there are (based upon government estimates) some 30 million renters out there - presumably who would like to afford their own home, but for the time being cannot.  Further knowing that they could not, they did not sign on what are now euphemistically called "liar loans", meaning that lots of folks out there bought $500,000 houses on incomes of $60,000 in reality, with no real way to make the payments, but who thought that they could flip them for easy money.  Now, that reality has intruded; they are losing or have lost their homes.  This of course led to falling prices, but the government is falling all over itself to save these bad loans and borrowers.

However in doing so, the government has created yet another false bubble in housing prices by stopping the fall or actually creating a small rise in prices very prematurely.  If the drop had been allowed to continue, prices would have fallen at least another 20-30% from current levels. That would be bad for those that bought them but let's not forget very, very good for those who have been patiently saving and waiting responsibly.  Instead, we are punishing the responsible at the expense of the irresponsible.

Now you guys know that I am here to give those in trouble another chance.  I am not judgmental and at the same time that I am criticizing the government for doing what they are, I am also telling those in trouble to take advantage.  I see no dichotomy here, as only a fool walks from free money. I am just saying that in the big picture, we could do other things and let the free market work. In the end, I fear that all this monkeying around with the financial markets is creating nothing but another disaster that may be much worse than the first.

Sooner or later reality WILL set in.  We just all need to slow down, let the free market work and understand that it is a process of creative destruction.  While it punishes poor behavior it rewards those who have waited, in this case renters, and disciplines those that didn't so that lessons are learned and they don't make the same mistake twice.  Think about it.