The Santelli Clause

I enjoyed Rick Santelli's rant as much as anyone. Financial news has found its Howard Beale. It's likewise amusing to see the White House snap back at Santelli, as Marc just wrote about. Leaving aside the obvious hypocrisy (Santelli didn't get worked up when his bank-exec neighbors got bailed out), here's a less obvious bit: The stimulus also contains a huge mortgage-related giveaway to wealthy types exactly like the pit traders in Santelli's audience. Buried on page 111 is a clause raising the "jumbo-conforming limit" on government-backed mortgages from $625,500 to $729.750 in rich areas like New York, Washington DC, and Santelli's home of Chicago. This is a big deal because Fannie and Freddie are the only ones buying mortgages anymore, so it will have the effect of driving down interest rates on really big mortgages. (Good breakdown here.) The Regular Joes on whose behalf Santelli seemed to be ranting don't take out $730K mortgages.

But I'll bet CNBC anchors do. If I were Robert Gibbs, I would point this out. I might even have some fun by dubbing the provision " the Santelli Clause" to drive home the point.