Comments on: ARM Teaser Freezer Plan Designed To Help Banks, Not the Market http://www.dailyreckoning.com.au/arm-teaser-freezer/2007/12/11/ An independent perspective on the Australian and global investment markets Sun, 08 Nov 2009 03:43:55 -0600 http://wordpress.org/?v=2.8 hourly 1 By: kayle http://www.dailyreckoning.com.au/arm-teaser-freezer/2007/12/11/comment-page-1/#comment-5474 kayle Tue, 11 Dec 2007 00:57:49 +0000 http://www.dailyreckoning.com.au/arm-teaser-freezer/2007/12/11/#comment-5474 Given that foreign investors tend to be more intelligent than President Shrub apparently assumes, my guess is the "Teaser Freezer" will have about the same degree of success as the M-LEC (remember when that obvious absurdity was all over the news?). A lot of sound and fury, fading to silence in a relatively short period of time. The article you reference may well be on to something as to motives. But I'll go out on a limb here and say it ain't gonna work anyway...whether inspired by evil or good. :-) Just a few examples of some obvious problems: - Who gets into Group 4? Who decides and how? How will the guard against MORE fraud in this area? - Why would anyone who "bought" a house anticipating bubble-appreciation, and with so little "skin in the game", even want to continue paying on a house worth less than they owe? - Who is going to lend money knowing the government can unilaterally rewrite the contract in favour of a defaulting borrower? This will cause even tighter credit restrictions and a more constipated market. Finally, I believe this proposal is "voluntary" - meaning it's more suggestion than edict. Like so many of this administration's ideas, the "plan" is half-baked and nigh-impossible to implement for any significant impact. I think it can safely be dismissed as nothing but talk. Given that foreign investors tend to be more intelligent than President Shrub apparently assumes, my guess is the "Teaser Freezer" will have about the same degree of success as the M-LEC (remember when that obvious absurdity was all over the news?).

A lot of sound and fury, fading to silence in a relatively short period of time.

The article you reference may well be on to something as to motives. But I'll go out on a limb here and say it ain't gonna work anyway...whether inspired by evil or good. :-)

Just a few examples of some obvious problems:
- Who gets into Group 4? Who decides and how? How will the guard against MORE fraud in this area?
- Why would anyone who "bought" a house anticipating bubble-appreciation, and with so little "skin in the game", even want to continue paying on a house worth less than they owe?
- Who is going to lend money knowing the government can unilaterally rewrite the contract in favour of a defaulting borrower? This will cause even tighter credit restrictions and a more constipated market.

Finally, I believe this proposal is "voluntary" - meaning it's more suggestion than edict.

Like so many of this administration's ideas, the "plan" is half-baked and nigh-impossible to implement for any significant impact. I think it can safely be dismissed as nothing but talk.

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