This past weekend secretary Paulson and President Bush presented a 700 Billion bailout package that includes but is not limited to the government exchanging government debt (good debt) for troubled defaulting mortgage backed securities (bad debt). This plan would allow banks to rid their balance sheets of this bad debt and allow them to free up capital or reserves set aside to compensate for this bad debt. When rumors of this plan hit the press on Thursday or Friday (I cant remember what day) last week it sent the markets into orbit to the upside with traders gladly grabbing hold of this news and running with it. They haven't had much to run with lately, that being said I was still surprised how much a rumor at that point could affect the markets. It's actually a little bit scary. We saw today after the official package had been announced traders are not so optimistic about the plan, if it has what it takes to make it through congress, and there is even some doubt as to what effect the package would have on our current situation.
Why make our children pay?
The question I pose is why make our children and their children pay for mistakes that bankers and CEO's made over the last decade? And why are we trying so hard to make sure none of these institutions fail? I know there are going to be some of you morons out there that are screaming at your computer right now while you read this all hyped up on Diet Coke and No Doz because you haven't been able to stop watching the news and reading on-line message boards about how the market was mere ticks away from totally imploding, well I would say to you go put the tinfoil back on your head and keep looking for Elvis. Tinfoil heads is our economy troubled? Yes! Are there steps that should be taken to help ease the credit fears? Yes! Is the only answer to throw 700 Billion at the banks and say here's a free do over? No do overs are for kick ball in elementary school when the pitcher throws the ball and you don't get the baby bouncies you called for. Do overs should not be issued to Investment Banks and Traditional Banks who's CEO's were still pulling down 20+ million a year right up until they got their butts kicked out the door or they closed down the shop.
I am not going to pretend to have all the answers, all I am saying is lets ease up on the dose of the main stream media who will say anything in their teaser to get you to keep your remote locked in on the next story, to suck the logical thought right out of very intelligent peoples brain's until they no longer have the ability to think with logic and understand that our country is in dire need of REFORM not free handouts. It has been said that the democrats never have seen a tax they didn't like, well that may be true but in all fairness I might add that sometimes it seems that the republicans never have seen a debt they didn't like either.
I enjoyed this interview with Ron Paul immensly because even though CNN's Wolf Blitzer threw everything and the kitchen sink at Paul including stirring the emotional pot by saying "they are saying people could lose their life savings, their IRA's, their 401k's, it has been said this could be like the great depression" Ron Paul just shunned that aside and kept saying very calmly "No the real problem is what we are doing to our dollar by creating money and credit out of thin air." "Inflation is what we really need to be worried about. It wont matter if every one still has their savings and social security checks if they dont buy you anything." I felt he did a great job. CNN and others are going to continue to stir that pot because that is what gets the message boards blown up with conspiracy guy making comments all day long about the end of the world and his love for Art Bell. Bottom line is we need to save more. Spend less then you make! Seems so simple yet our entire country seems to struggle with it.
Interest rates are still amazing, home prices have dipped significantly, it's time to buy. Call me guys, even you conspiracy guy give me a call but don't give me your social or date of birth over the phone "they are listening" HA enjoy the interview with Ron Paul.
Stetson Lowe - The Mortgage Insider - www.UtahLoanTips.com
