The market has recovered from steep losses earlier in the day on news that the government will subsidize the bad decisions of homeowners. Essentially, if you bought a house and you’re having trouble paying the mortgage, the rest of the competent U.S. taxpayers will chip in to help bail you out of your poor decision.
This is even more ridiculous than the “stimulus” plan. The idea that they can manipulate prices and contain the losses in the housing market is beyond ridiculous. Housing prices are going to adjust back to their affordability levels regardless of what the government does. This sort of manipulation only provides band aids to a gaping wound. These are the kinds of programs that prolong the issues.
We cannot expect our capitalist market to begin functioning properly until we get over this ridiculous idea that we can manipulate prices through government intervention.