Greater fool theory

Guess what? Those of us who warned time and time again that loans to bad borrowers are loans that cannot and will not be repaid have been vindicated. Some of those high-risk "lendees" who had failed to meet their mortgage payments, only to be saved by the government by having these mortgages "readjusted," have failed to pay again.

According to Reuters:

"Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum."

As many of us feared, spending a trillion dollars to rescue people from mortgages, that should not have been made and could not have been repaid in the first place, was a really stupid idea.

No doubt Congress will soon decide that it must bailout the bailout.