Stocks plunge as concerns rise over bad mortgages

Stocks plunged this morning on more bad news for the mortgage market.

Soren Dayton, a conservative blogger I met at a recent event for the ONE campaign, raises a lot of interesting points about the coming mortgage debacle. His most interesting point: Those adjustable rate mortgages (ARMs) that everyone took on hoping they could sell before their rate increased? Well a huge chunk of them are coming due between now and the 2008 presidential elections. He thinks this issue is going to be huge in terms of electoral impact. A very interesting analysis.

Having said that, unless you got outright cheated on your mortgage – meaning, you got outright lied to about the rates, etc. – then I’m not having a lot of sympathy for folks who either didn’t pay attention when signing the dotted line, or who thought they’d make a fast buck before their “real” interest rate kicked in. And to the extent that people are going to make the argument, that I’ve heard, that lower-income folks just don’t understand complicated things like mortgages (how are they at throw-weights?), and therefore we need to cut them a break, then we have an even larger problem than simply fixing the current mortgages (and let me say right off, the entire basis of this argument strikes me as vaguely racist – “you know THOSE people, they just aren’t capable of understanding hard stuff”). We should change the entire way that mortgages are set up, if in fact we’re going to argue that an economic class of Americans will be per se cheated by a lack of understanding every time they enter into a mortgage (though that’s a rather slippery slope – how are they at buying a car, figuring out which insurance they want, filing their taxes?). That’s preferable, in my eyes, to talking about a bail-out that would do nothing to fix the problem that caused the bail-out to be necessary in the first place.

CyberDisobedience on Substack | @aravosis | Facebook | Instagram | LinkedIn. John Aravosis is the Executive Editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown; and has worked in the US Senate, World Bank, Children's Defense Fund, the United Nations Development Programme, and as a stringer for the Economist. He is a frequent TV pundit, having appeared on the O'Reilly Factor, Hardball, World News Tonight, Nightline, AM Joy & Reliable Sources, among others. John lives in Washington, DC. .

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