Dennis Gartman on Mortgage Bailout

"We wonder who it shall be that will make the decisions involved as to which mortgagee shall be helped out and which shall be left behind. What shall become of those mortgagees who had paid up their mortgages; accepted the newer, higher rates; and have been consistent in meeting their obligations? Are they to be sacrificed, while those who've been late or moved to foreclosure shall be given aid from the government? Are we about to shower benefits upon the profligate, while denying those who've followed the rules?

"Are contracts no longer to be viewed as law, but rather are to be viewed as nothing other than mere whim? If we are to allow mortgagees who are in trouble to stand down and have their problems taken up by taxpayers, what then of contracts anywhere? Can we demand foreign governments, or foreign companies, or foreign individuals to stand by their commitments to Americans if Americans will not stand by their commitments to one another?

"No one wants to see people put out from their homes. No one wants to see the television photo-op of poor people pushed from their homes at Christmastime, or in the depths of winter. No bank wants to take delivery of a foreclosed-upon home when it could be left in the hands of the former home owner, with the mortgage shortage to be worked out over time. But to have the government step in and mandate that homeowners be allowed, under penalty of law, to remain in their homes and for banks to be forced to accommodate is legal and philosophical madness.

"This is a country of law, which believes in the sanctity of contract agreed upon by those who've consented to the binding nature of that contract. If the parties involved wish to change the contract, and if agreement can be reached to do so, then it can and should be done. But to have government force the issue -- and worse, to mandate [that] taxpayer funds be used to do so -- is morally wrong, with implications that shall redound into any and all other economic concerns."