Our President, Jevovaha Bush, has not done a good job presenting his recovery package. Can someone please tell me exactly how it is going to work instead of "if we don't do this the sky will fall speach."
My solution is simple. Give anyone with an adjustable rate mortgage the option to buy a 3% fixed rate loan for five years from Uncle Sam. At the end of that time, they have to arrange for a new loan, well after the panic, under whatever terms they can negotiate. Fix the core problem, the banks will stop bleeding, and the strong will survive.
Second, raise the amount of money insured in a bank from $100K to $250K.
Aside from that, deal with each bank with the Fed on a case-by-case basis just as we have been doing. Let the bigger and healthier swallow the weak.
I need to understand why this simple approach will not work before I will personally support a bailout of banks and institutions that screwed up. Let the vengence be mine saith the market.
3 comments:
I do not think we ever see most of the vengence. I am placing my money on that we only seen about 50%. About a year ago I state a 35% correction in the market, but with the gove helping ht eproblem I am increasing ym number to 40-55% before its all done. Let's hope I am wrong and it more like 35%.
Byron, with the bailout, I don't really expect the market to change much from where it is now, or at least the Dow Jones Avg or S&P. Give about a month for the dust to settle and most of the market will go lower, but energy stocks and commodities will soar. Oil and commodities in part will just reflect the devaluation of the dollar from a trillion dollars of debt we just swallowed. But, energy will also rise because their still is a global shortage of affordable energy and energy technology. China is still growing more than we are declining. One thing helping the dollar is that Europe may be in worse shape than us and they have 15 governments that must agree to come up with a plan.
Oh yea, with the bailout we are redistributing the pain away from just the financial sector and spreading out over everyone. The fear is that the ones that caused the problem will not feel the pain and we will continue to kick people out of their houses with adjustable rate mortgages that are going through the roof, which continues the downward spiral of home values.
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