I don’t think you’re completely wrong about the will of our central planners to appear as if they’re trying to “fix” this problem. As the early measures fail I’d imagine there will be others with more veracity that will arise. But…
… I think our central planners are “chasing the market down,” as it were. They’re behind the curve, so to speak, and that’s the nature of central planning. I just think these measures and the measures that follow, etc. will be too little too late to help a whole lot. That’s why I think that ultimately market forces will largely prevail.
Also, I’m not certain that, ultimately, the political will exists to “save” the troubled borrowers. After all, about 30% of the population rents, another 30% or so owns but has no mortgage, and most of the remaining 40% can pay their mortgage. The group that’s having problems, while extremely important as economic agents at the MARGIN, are not a huge voting block, and I don’t think the “rest of us” are as concerned about falling home prices as we are about meeting our mortgage payment and/or paying rent. In other words, I think that some of the central planners’ actions right now are more about the APPEARANCE of “doing something” as opposed to actually wanting to save people. But perhaps I’m just cynical that way…
Of course, I could be wrong. Wouldn’t be the first time…
