There is a great urgency of NOW! A few calmer heads really don't believe this is true.
This is a PANIC.
They believe that a stock crash is not emminent. Will the DOW have to dip in to 4 digits do it?
9999 or lower? We might see this today depending on how things go!
I don't believe Bush is an expert on the economy. None of the presidential candidates have a PhD in the subject. Paulson was a CEO for Goldman Sachs during the time that these bad loans were being made. He should know this was coming.
First, this should be an issue that takes months to plan out. Contingent plans must be made... and it seems that people involved in the system that created this mess knew it. I heard this "We (real estate finance) always knew that if this (lending / real estate end of the banking system) went down the government was going to bail us out." It was part of their plan. When they gave the investment banks the tools to be clearly deregulated and directed them to send money to impoverished neighborhoods, then they became mismanaged.
Nobody forced the consumers to take the money. That was their own mismanagement and lack of due diligence. I did not go out and take a ninja loan (NINJA: No Income No Job or Assets). Nothing in this legislation penalizes those who took risky behavior. The homeowners are considered victims, when the real victims are the ones who don't own a house. Evidently, because you made a bad decision in taking the loan, they are the victim, what about people like us who saved money where they could and now can't get a loan because of them. Should they be kicked out of their house and foreclosed against? Damn straight they should! They're not the victims. They were greedy, they participated in risky behavior. They should be marked and their credit should be stripped!
The only thing that keeps you in the grace of the banks is cash on the barrel head!
If you have the money, you're way better than those who are tied up in investments right now. Nobody knows what is going on or what to do. The only two things that are certain are death and taxes. The fundamentals are lost, they mean nothing now.
There needs to be a total revaluation. Houses aren't remotely worth what they say they're worth.
A $275,000 house built in Ft Myers Florida is selling for $125K. A house in Wrigleyville is selling for $799,000. These are assets that needs to be reevaluated. Each property is different and must be priced differently.
If a bank saw value in over pricing their assets because the government only paid $0.60 on the dollar, then they'll find assessors who do it. Assessors are part of the problem. They've been over assessing property values for years.
If we used the assessor price from the 1970s, we'd be a lot closer to the mark, but then a 500K house is only worth 150K in Wrigleyville. I would be fine with this, because then normal people with normal jobs can afford this house. If there were some benchmark to rate property values, then we'd be in the clear. An auction house would have seemed to have been the right move.
Question: Who has the capital to buy up all of these properties?
Answer: Consortiums that you mght not want to buy America. The Soverign Wealth Fund has already expressed blankly, that they are not interested in saving corporations and institutions in the United States, instead they are interested in property.
Labels: Bernanke, Congress, Panic, Sovern Wealth Fund, Stock Market Crash, Wall Street