As a taxpayer, I applaud the fact that BB is implying that the market (banks) should resolve their own problems. As Paulson said today, there is the incentive.
As an investor/shareholder, I agree that at the end on the day, minimizing losses is desired. If reducing principle pans out to cost the least, do it.
I am curious though. I find it somewhat hard to believe that reducing principle is going to significantly reduce the number of foreclosures. Given the level of the “average” persons debt and tightened lending standards, I would guess that most of those in trouble are facing financial issues on a number of fronts.
