[Mr. Bird]

Now prices are declining on their own, but that is causing millions to be in illiquid assets. What they are trying to do is put a floor on the declining housing prices, by lowering the interest rate considerably, and stimulating demand. It might stimulate demand, but I don't think it will cause more damage. The bubble has already been popped, and isn't coming back in a generation.

I think we're on the same page, but why would we implement a policy that would stimulate demand from high-risk borrowers? Would it not be better to stimulate demand among low risk borrowers? We already stimulated (heck, metaphorically the stimulation was pornographic) demand among those who couldn't fulfill the promise.

It just seems to me that every "solution" is a bailout, rather than an incentive for others to make a killing. And when I say killing, I mean that in the most positive way.

[Vince Ferrer]

The lending standards are now higher than they were in the bubble, so if they can qualify today, they are probably not high risk borrowers.