[Royboy39]

Originally Posted by bullseyebarb

The government backed the sale of Bear Stearns to JP Morgan Chase. The shareholders of Bear Stearns lost their shirts......just as they should have under the circumstances. For those who were not shareholders but did have investment accounts being managed by Bear Stearns will have their portfolios transferred to other institutions and will not be affected.

Many years ago when I bought my first home, my banker told me, (with an attempt at humor), "No pay, no stay." Something I understood full well when I signed the paperwork. This is how the free market works, my friend. What you had during the real estate boom was our wonderful government pressuring banks to ease the normal vetting process so that more people could own their own home. So many of the old tried and tested rules went out the window. You had a lot of people who bought houses they could not afford. They got adjustable rate mortgages and then found themselves unable to pay when the rate went up. There was a very unnatural housing bubble in which in some areas of the country the price of homes was going up each year at a ridiculous and unsustainable rate. A lot of people apparently thought that the gravy train was going to last forever and began taking out large equity loans on their property. Throw into the mix a few unethical lenders and it was a recipe for disaster. The market is now correcting itself. Housing prices are falling to more normal rates and homebuyers are getting some great deals out there. Now the banks and mortgage companies will get back to doing things the old fashioned way and, hopefully, homeowners and future buyers will have learned a lesson or two. See, there is always a silver lining to every situation. Yes, it's sad to see the nightly news parade of people having to move out of their houses and back into apartments. But in some cases, it's rather hard to have a lot of sympathy. The fact is that most Americans do pay their mortgage on time and I see no reason why their taxes should be taken to bail out people who were not as careful in their planning.

What's all this to do with Magabi?