Who will we bail out next month? Commercial loans, insurance companies, airlines, auto manufacturers, local cities, states, local banks, or pension funds? The problem with writing a blank check is that in rushing for a fix, there is no guarantee that this is the end of the "Can't fail scenarios." There was a saying years ago that with high interest or rate of return came high risks. Companies that knowingly took on sub-prime, collateralized mortgage obligations CMO's, and derivatives were driven by raw greed only. Their risk should be their own. This proposed bailout plan only addresses the garbage that no one wants to buy. That is why those institutions stuck with the bad debt are frozen in place from making new loans. No one in their right mond wants it! That iliquidity problem is their problem, and not that of the American taxpayer.
This bailout plan does not address: Alt-A loans that will be readjusting for the next three years, the late pays in commercial loans that are just starting, this does not assist your local banks, homeowners falling into bankruptcies, auto manufacturers, airline industries and more that will also come knocking on the door of the US government in the coming months. Who will bail them out?
This is an election year ploy to sweep dead bodies under the carpet until after the elections are over! "Please do not ask any questions we are told. You'll only slow up the process!" We must not fall for it, and we must think through the consequences! The same idiots that allowed us to get to this dire point in the economy are the same ones that are now telling us they have the solution!
Don't kid yourself! This is a trillion dollar bailout being spoon fed to us one crisis at a time!
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I must admit I am very concerned about this. I just don't think I am educated on the subject enough to know what I think about it. lol
I was thinking of going to buy a boat and then missing my next 3 months of payments on everything I own and then asking for a bailout...it would be small by comparison, maybe like $200,000 total. Do you think I should have the right to ask for that for mismanaging my money like the corporations that are needing bailed out have?
I read today GM and Ford Motor both had big losses and are getting in the soup line for a govt. loan!
I wish some one would bial me out. You have any idea how much business I have lost due to the mix up with the banks? All my buyers are sitting and waiting until spring to by. Thanks feds you just scared everyone out of the market. Learn to think before you act Mr. I am watching the economy. (Can't spell his name, Mr.B)
HA! No one is going to bail out the home owner. They have bankruptcy. In fact, to even get a loan modified, they have to ruin their credit.
This is a turning point in the US and the world economy, an indecisive government could cause a ripple effect throught the world sending everybody into a recession, I believe what is being done is saving the next 20 years of our future. We should all judge these decisions when we can look back and really see what the true impact would have been of a NO intervention model 10 years from now
Hey Jim: why don't you tell us how you really feel :) I could not agree with you more.
The reality is no one has the complete solution to this dilema and there is no quick fix for this problem. Whatever plan is approved will get some things right and some things wrong. I think our congress, if wise, will be more interested in acting wisely and not just acting quickly. Only time will tell if the solutions offered will help or hinder.
After all, It was only a few years ago that Government tried to "help" our economy by artificially stimulating the housing market and we can all see how that worked out!
Jim, where will it all end? I'm really starting to get worried. The trickle down from all that is happening is affecting our in communities and making people feel desperate.
There are an abundance of smart people that aren't in government. Why can't the government set up an emergency think tank with these geniuses to come up with a better plan than rushing into the beginning of the bailouts.
Sherie Earley-Womack (Choice Real Estate) You are not alone! There was more talk today on TV about the use of steroids in sports figures by congress then details of the biggest taxpayer bailout in history since the bailout of Fannie Mae and Freddie Mac just a few weeks ago!
Ron Tarvin's Katy Agent Team-- Katy Texas Real Estate Agent (Real Estate Agent in Katy Texas with RE/MAX Grand) Ron, I totally agree with you. What is going on in Washington?
Darin Haughie (Esslinger-Wooten-Maxwell, Inc. (EWM) Who next? As taxpayers are we to say, "Just put it on our bill?"
Dennis Herman (Realty Exesutives) You are not alone. Lon officers, and many agents have been telling be the same thing. Buyers are stepping to the side..waiting this to play out.
Lenn Harley, Homefinders.com, MD & VA Real Estate Lenn something has changed in this nation and not for the good. Parents have to learn how to tell their children no, and items that are purchased have to be figured into a budget.
If we live beyond our means there are consequences - so government wants an exemption?
James Engel Director of Commercial Division (Keller Williams Realty Beverly Hills) I disagree. The last few years in real estate now appear as excesses that should never have occured.
We cannot postpone consequences and pay later...we've already done that. It doen't work!
Diana Corcoran - Rhinebeck Real Estate (Paul Hallenbeck Real Estate) LOL! Now you understand where I'm coming from!
Lisa Gaiche (RE/MAX Real Estate Group) I think that if our elected representatives had not been contacted by their consituents in overwhelming numbers as they have...they would have already acted in haste and approved this useless bailout!
Lizette Fitzpatrick, Lexington KY Real Estate (Central Kentucky - Prudential Don Foster - Richmond KY) Yout can thank all our spineless officials at every level. We need to really clean out the losers out of office when we vote!
David Slavin, ABR, SRES RE/MAX Grand, Katy, TX (RE/MAX Grand) They have been replaced by "Yes men!"
Jim,
Another debate over entitlements vs accountability!!! Thanks, Fran
Jim:
If we don't put the liquity in the markets we will all just stay home!
Jim,
I hear you, but what happens without this plan ? Is not as much a bailout as it could potentially be an investment. I think this plan is the best plan... because what are the alternatives ? Is nasty but essential ? Im not sure... is a tough one.
Jim, the Wall Street Journal research team took a microscopic look at the Home Mortgage Disclosure Act stats in October of last year and predicted a 600 billion default line at that time. It was published in the October 11, 2007 edition of WSJ. They reviewed and predicted default of 10.3 million loans out of 43.6 million mortgages from a total of 250 million records, made between 2004 and 2006 under the disclosures under HMDA. The PMI underwriters must have been very worried then. On the other hand, WSJ might have been looking for some additional sensationalism to sell subscriptions. News about the County High School Autumn Band Concert tribute to Gershwin in Passaic wasn't interesting enough.
Jim - I would like to know what you think should be done instead.
'They' are saying the government will actually make money on this in the end, which of course we all know will never happen because they will be using the projected income to justify financing some other bail-out by next week.
Fran 'The Title Man' Gaspari Title Insurance-PA & NJ (Patriot Land Transfer, Inc.) Let's start wihtthe accountability. Our representatives for the most part have not been good stewards of our hard workign tax dollars. They insisted on chanign all the rules on who could buy homes, lowered the credit scores and requirements, and neglected to monitor or investigate wrong doings.
Now we're in a mess of their making, they want another blank check! No on my watch! Shame on me!
Richard Stabile Bergen County New Homes Builder Realtor (REMAX real estate associates) What about the liquidity we added last month, what about the bailout of Fannie Mae and Freddie Mac? What about the tax rebate? When will it end? They have squandered everything, and are back for more. Out of fear most Americans want to believe it will work, and yet know in their hearts they are being lied to again! This is so they all get elected again! That is it! It's business as usual for the Washington elitists, and suckers will fall for it because it is easier to listen to lies than truth. Sort of like the fairy tale of the "Pied Piper!" The harsh reaility is we are already on the hook for over a trillion. This is just the begining.
Christopher and Stephanie Somers - Realtors - Philadelphia Real Estate (RE/MAX Affiliates) When the RTC was around I heard the actual tax dollar loss to the US Taxpayers was well over 150 Billion real dollars. That was pale in comparison to the losses that are now ahead.
Think about this...Democrats and Republicans both signed off on the North American Free Trade Agreement NAFTA - they promised us prosperity, and we saw US factories close and jobs disappear south of the border. Where is the promised prosperity? Outsourcing....what did congress do? Has Congress secured the borders since September 11, 2001? No! Drugs and illegal aliens roam across borders at will, while at our nations airports they frisk grandmas, and will not search for fear of being socially insensitive.
Since we no longer manufacture we are upside down with trade imbalances. We are a service economy that produces nothing, and now what do we service? Cable TV accounts? Cellular Phones? Fast foods?
Basically we no longer produce steel, a Democratic Congress does not want energy relief by domestic production, we don' have nuclear power plants, they do not want new refineries...so how does it feel living in Utopia?
Reality is about to hit us square in the face that we have been living an absolute lie. I pray that this nation wakes up and does the right thing, instead of trying to hold on to all the wrong ways that we become so accustomed to for the last few years.
Folks the lies are not working any more!
David Saks - Real Estate Broker (The Real Estate Mart of Tennessee, Inc.) I agree. No one wants to listen to real news. This story is something they do not want to hear.
David Saks - Real Estate Broker (The Real Estate Mart of Tennessee, Inc.) I agree. No one wants to listen to real news. This story is something they do not want to hear.
David Saks - Real Estate Broker (The Real Estate Mart of Tennessee, Inc.) I agree. No one wants to listen to real news. This story is something they do not want to hear.
Lynn Afton, REALTOR® in area surrounding Big Rapids, Michigan (Greenridge Realty Oakmont) First of all the stability of our country in all levels of banking and finance and currency are based on "Fiat!" Something is worth what you think it is worth. On the public relations side of this Bernake, Paulson et al...are doing a very poor job doing this. Bernake looks like he is having a heart attack anytime he is asked a question. He should not play poker, his face gives him away. Paulson (Former CEO of Goldman Sachs) the first love of his life is Wall Street. In his current job that does not apply. It is "We the People" that matters! The love of dollars and profit are clouding their judgment when they are asking for money to buy the investments that no one else in their right minds wants. Fire them! These are trash investments that personally their own firms cannot give away. It was estimated last week that these invest ments at best are worth 30 cents on the dollar! That would make the 700 Billion Dollar liabity really only worth about 233 billion. I guess the rest is for administrative costs, pork barrel etc.
Put someone in their position that believes in America First!
When real estate collapsed in Houston during the oil bust, homes were sold in large blocks for pennies on the dollar at taxpayer expense. So should we repeat this? Here is where I would proceed to put confidence back in the economy!
You are so correct it is scarey, and this is playing out like a bad horror movie except this time it is reality.
Please eveyone call/email all your reps.
Go after every Wall Street Banker who made money packaging/selling/insuring Alt A and Subprime mortgages and take their last 5 years wages/bonuses. Same with rating agencies who lied (and are still lying). Same with insurance companies who never looked at the loans and were not properly capitalized. Then have the government offer the holders 10% of par for bad loans or just take the assets after the holders go bankrupt. These are radical times that call for radical measures. This financial crisis is on top of all the deficit spending from the war, stimulus, pork spending, unbalanced budget, etc. so it really is a multi trillion/year problem . The good news is it is just money, so when the train wrecks and derails, a replacement financial system can be implemented if humpty dumpty can't be put back together : ) ! Yep, Osama didn't need to attack us as we have been doing it to ourselves financially the last 10 years.
ANONYMOUS - Thank you for your very insightful comments! I agree!