I have always known that the 700B portion of the bailout was for banks and wall street. I think most people always knew that, they is why they were so against it. But the last poster is correct, they talked about housing just enough to make people think that just maybe this will actually help them in some round about way.
I certainly never thought that portion was a RE savior. BUt the nationalization of the GSE’s, the cram down of capital to banks to try to force them to lend again (where do you think they want that money to go???) were both ment to help housing. The unforseen consequences though may just bite them in the ass. Rising interest rates will slow homebuying and increase the level or correction needed in the marketplace. That will lead to more underwater homeowners, or perhaps more homeowners REALIZING they are underwater, and more foreclosures. More foreclosures drive price declines and around we go.
Not saying that this will necessary happen, or that it will be a repeating cycle,just saying that the Gov isnt God and cant get RE prices to rise by commandment. (until we become socialists that is)
