By Michael Pento

Joining the Fed's effort to meddle with the free market is Treasury Secretary Hank Paulson and his plan to rescue the housing market. The essence of his plan is to convince the owners of sub- prime adjustable mortgage debt to freeze the interest rate resets for a period of about five years, a proposal which is supposedly only to be available to those who will become indigent once the higher rates become effective. Ostensibly, this will ameliorate the anticipated surge in mortgage foreclosures and prevent a further decline in home prices.

The first reason to eschew Mr. Paulson's plan is that his deal, if successful, may serve to protract the issues with housing for years to come. Offering to freeze the rate for only those who cannot afford higher rates is silly and we will certainly see claims of indigence from many who can actually pay. Unfair speculation on my part?...read more "Paulson Vs The Free Market" at GreenFaucet.com