A week ago Friday, President Bush announced his plans for helping homeowners that are at risk of losing their homes due to the current mortgage crisis.  I have issues with this announcement.

First, I thought the Republican Party believed in less government and less intervention.  And don’t go sending me emails about being a Democrat because quite frankly I don’t like either party these days. 

My second issue with the President’s plan is that he wants to use everyone’s tax dollars to bail out those who got themselves into the situation in the first place.  Homeowners who bought what they could afford will now help those who bit off more than they could chew and bought more house than they could truly afford.  People who used adjustable rate mortgages, teaser rates, and no money down programs are now getting bailed out by everyone else.

Another issue I have is with the press conference itself.  President Bush said that his plan would help those with “good credit.”  Well, those with good credit aren’t the ones in trouble.  It’s the subprime market that’s in trouble.  The reason it’s called “subprime” is that the borrowers didn’t have good credit when they applied for loans.  So to me, this press conference and this plan were just PR BS. 

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Despite my feelings about the plan, the market jumped sharply even before the press conference.  And this brings me to my last issue with President Bush’s plan.  If you are going to use my tax dollars to bail out people who got themselves in trouble, then I expect the government to pay me back for any losses I suffered in the market.  As a direct result of President Bush’s announcement, the puts I was holding on the Amex Diamonds Trust (DIA) dropped by $1,200. 

This is how I arrived at the title of this week’s article.  I figure if the government is going to bail out homeowners who take a loss on their house, the least it can do is give me the $1,200 they cost me with this PR stunt.

What do you think?  Do I have a legitimate claim?

Good luck and good trading,

Rick

P.S.  To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com.

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