Monday, July 16, 2007

Reuters' Economic Illiteracy Denies Housing Bailout Will Cost Taxpayers Any Money

Reuters apparently believes in the free-money-falling-from-sky theory of bailouts:

"The Massachusetts Housing Finance Agency will contribute $60 million, while Fannie Mae, the largest U.S. home funding source, will add $190 million, to the new fund.
Massachusetts taxpayers will not be asked to bail out borrowers, often with poor credit histories, who were wooed by subprime lenders' offers of attractive initial rates that often skyrocketed later.
Rather, the money for the fund will be raised when MassHousing sells taxable bonds with variable and fixed rates to private investors in the coming weeks, an agency spokesman said" (Reuters).
Where does Reuters think Massachusetts gets the money to pay the interest on the bonds?

Obviously, the only reason that Massachusetts taxpayers are taking out loans (bonds) and paying interest to bondholders is to bailout the delinquent borrowers who cannot pay their mortgages.

Reuters seems confused, since its article's title declared a bailout and then its article denied any taxpayer bailout.

Such nonsensical economic reporting makes one wonder how many Reuters reporters took dodgy mortgages and need a finacial bailout.

PS: California, Colorado, and Wisconsin are eying bailouts similar to the Massachusetts bailout, according to the National Council of State Housing Agency's Director of Housing Advocacy Garth Rieman, via Reuters.

More examples (unfortunately): More Media Economic Illiteracy on Housing Bubble -by Associated Press this Time

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