There’s always something to howl about.

Lucha Libre Mortgage Reform

Last week there was some discussion about what was to have happened today in Washington. This discussion centered around whether the government would or would not take certain steps to protect the housing market through a mandated deficit funded mortgage bailout.

Today, we have some new information on what Tim Geitner and a host of invited banking executives chit chatted about.

Seems that much of the talk in a few of the posts here centered on whether we could expect the Obama administration and industry executives to continue along socialistic lines, (Wall Street still knows better than Main Street), or whether lightning would strike and we’d decide to take our lumps now.

The answer’s in.

Obama administration invited banking executives Tuesday to offer advice on changing the government’s role in the mortgage market. Their response: stay big.

While the executives disagreed on the exact level of support needed, the group overwhelmingly advocated the government should maintain a large role propping up the nearly $11 trillion market.

Bill Gross, managing director of bond giant Pimco, said the economic recovery required more government stimulus, particularly in the housing market. He suggested the administration push for the automatic refinancing of millions homes backed by mortgage giants Fannie Mae and Fannie Mac.

Refinancing those homes at the lowest mortgage rates in decades would give Americans more money each month. That would boost consumer spending by $50 billion to $60 billion and lift housing prices by as much as 10 percent, he said.

Without such stimulus in the next six months, Gross said, the economy will move at a “snails pace.”

Treasury officials have said they have no plans to enact such a plan, which has been the subject of intense rumors on Wall Street in recent weeks.

So it was just a rumor after all????? But wait….there was more…

Geithner did not offer a specific exit strategy for Fannie and Freddie. He agreed that the government could remain involved in the mortgage system by guaranteeing investors in mortgage-backed securities get paid, even when borrowers default.

There is a “strong case to be made” for such an arrangement, Geithner said.’

This is just like a professional wrestling match, the kind where heroes and crooks throw each other around the ring for a genuine good time and lots of laughs for the audience. It’s all fake, of course, but there’s no denying that the participants are powerful men who can certainly take you to the mat if they want to. And Terrible Tim Geitner, the reigning heavy weight champion, may be funny to watch, but won’t feel so funny when he makes the American taxpayer part of his smackdown.

When Terrible Tim Geitner says there’s a “strong case to be made for a mortgage system that guarantees that investors in mortgage-backed securities get paid, even when borrowers default, that’s carny talk that the fix is in.

Watch as the match unfolds. Lucha Libre Mortgage Reform is coming to a town near you.