From Reuters:

Leaders of the U.S. Senate Banking Committee said on Monday they had reached a deal on legislation to create a multibillion dollar mortgage rescue fund and a new regulator for housing finance companies Fannie Mae and Freddie Mac.

The plan would enable the Federal Housing Administration to guarantee billions of dollars in refinanced mortgages for homeowners whose properties have fallen in value since they took out their loan.

As I mentioned in a previous article, Let The Bailouts Begin!!!!!

“The bill addresses the root of our current economic problems — the foreclosure crisis — by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes,” Democratic Sen. Christopher Dodd, the committee’s chairman, said in a statement.

This freaking idiot runs the Banking Committee?!?!?! Please note that the above statement was oral, not written. I point this out because I am convinced that Senator Dodd couldn’t spell the word ‘economic’ if he was pressed on the issue. The foreclosure crises is not the root of the problem. Why isn’t it the root of the problem? Because people losing their houses will either get into another house, or they will rent. The problem is that banks have non-performing assets on their books that they can’t get rid of at the moment. They have them because home values fell. Home values fell because we in fact have more houses that we have people to put into them. They also fell because they were artificially increased. Part of the reason the were artificially increased was over liquidity from the fed.

This means in simply English that the root of the problem is our low fed rate. This caused the prices to be pushed to unrealistic levels and it also killed the value of the US Dollar which is now causing inflation. A bailout of foreclosures does not fix over liquidity and it does more damage to the US Dollar. In other words, it makes the problem worse.

This idiot also claims that there is no estimated cost to taxpayers. Really? How do you guarantee a loan without money?

Congratulations jackasses.