Standard Mischief

Well I can dream, can’t I.

Periodic downturns happen in every market, but this cycle is notable for a “credit crunch”. You can point the finger at number of firms and individuals:

• “Creative accounting” by Fannie, Freddie, and a number of Wall Street firms
• The failure of these quasi government agencies to only buy conforming loans as set out in their charter.
• A number of firms that repackaged loans for resale with the intent to conceal risk.
• People who flat-out lied on their “Option ARM” loan application forms.
• Government regulators, congress critters and other maggots that looked the other way while the bubble was inflating, instead of enforcing regulations that are already on the books.

In the unlikely event that the people and lending institutes who committed crimes that contributed to the the current mess actually get any fines, I’d like to suggest the following:

Force them to pay the fines by putting 20% down, and having them pay off the remainder on a 30-year fixed rate amortization schedule. Require the CEO or individual themselves to personally sign the payment check within a thirty day window of when the payment is due (with the sincere hope that they will remember their lessons for the next time a bubble starts inflating).

Instead, I’m confident that the taxpayers’ own unborn grandkids will pay the check, Congress will respond by making fraud even more illegal-er, and today’s lessons will be forgotten with the next market upswing.

Inspired by countertop’s modest proposal.