At an admittedly cursory first read, my initial reaction to the Treasury plan to save us all from financial markets is to short housing and insurance. Those are the two main areas that will a new and heavier regulatory burden.
Housing is proposed to be subject to a new Mortgage Origination Commission. Because markets are so awful, and companies can’t decide whether to enter the mortgage business themselves, we now are apparently going to have the MOC deciding whether states are up to snuff with respect to the certifying companies permitted to enter the mortgage origination business. Gagh. Kill me.
And then there’s insurance. There Paulson proposes new federal regulation of that stodgy business by creating a new national insurance office within Treasury, one that would oversee any insurance firms so dumb as to choose to have a federal charter.