How to Privatize the Mortgage Market

The housing/mortgage market continues to be a huge drag on the economy with no end in sight. Saw this interesting article on how to privatize the mortgage market and simultaneously get rid of the giant albatross that Fannie/Freddie have become. These entities are structurally bankrupt and bear at least a large portion of responsibility for the mess we find ourselves in presently.

A Real Mess Brewing

By now everyone has heard about the group of institutional investors led by mega bond fund Pimco that has notified Bank of America that they want to "put" or sell back about $16 billion of bad mortgages. The attached piece does a good job explaining the mess and initial push back from Bank of America. Some estimate that as much as $150 billion of mortgages may be sold back to the big banks. One of the many problems, however, is the big banks - Bank of America, Citibank, etc. lack enough in reserves to cover this...can anyone spell "bailout"?

Tax Rates- More = Less

A good read from our favorite Harvard economics professor. He does an excellent job tracing higher marginal (meaning at the next dollar earned) rates and their possible impact all the way through being taxed at death. These rates become confiscatory quickly. As someone said recently- we don't really have an income problem, we have a spending (and I would add debt) problem.