Economics

What Will Get the Economy Growing Again?

According to MoneyMorning.com “Billions in Bank Rescue Funds are Fueling Buyout Deals, and not the Increase in Loans That Would Help Ease the Financial Crisis”. These banks need their hands slapped. This $250 billion recapitalization fund is being held by banks and being used to buy out smaller weaker banks to eliminate competition. This recapitalization package is supposed to pump money into the banking system to stimulate the economy. Displacement of funds will cause business failures and additional foreclosures (i.e. www.BuyMyHouseBeforeTh...) and cause another need for a cash infusion by taxpayers into the banking system.

This is not a consumer driven recession. Consumers have been stripped of their wealth by special interest driven legislation, wars, unchallenged illegal immigration, cheap foreign labor, offshore manufacturing, and predatory lending practices by financial institutions.

Too much of consumers' money is going to pay interest. Government legislation, the Fed, and the banks have stripped consumers of their wealth. The economy will not recover until consumers do. Lowering the interest rate and throwing money at banks and other corporations is not going to fix the problem. It is only going to make matter worse when the resulting inflation sets in. Banks are going to have to take their lumps along with everyone else. To reduce the severity, banks need to lower interest rates on credit cards, mortgages, personal loans, and lines of credit. Congress also needs to stop fooling around with things that stimulate the economy like tax credits for renewables and they need to stop bringing cheap foreign labor into the country.

Political Theater: The Congressional Credit Hearings

Greenspan, you got to be kidding, voluntary regulation? If you put a bunch of thieves in a room with a full piggy bank, what do you get? You get an empty piggy bank! If you put a bunch of thieves in charge of the US banking system, what do you get? You get a bankrupt banking system, unemployment and loss of homes: www.BuyMyHouseBeforeTh...!

What Is the Fed Waiting For?

The key here is not to panic. The feds have pumped money into the banking system and has taken steps to offer low interest loans to businesses. We have the same market conditions we had a few weeks ago and the last thing we want to do is scare the American public and have them stop buying. Banks are working feverously to prevent foreclosures, and the last step in the equation is to make lower interest loans available to people like these www.buymyhousebeforeth... , once you do, it will ease up their disposable income and allow them to spend again.

BoA Cuts Off Countrywide ARMs to Save Body of Mortgages

Countrywide’s new rates will be as low as 2.4% will sure help anyone with a mortgage, too bad it is for such a small segment of the population. I guess these people did not have mortgages with Countrywide, www.buymyhousebeforeth... and there is no relief for them.

Batten Down the Hatches: Economic Forecast

The United States has ignored the natural economic process, mortgages default, bank fails, losses are absorbed by stocks, assets sold, and Federal Government takes the bank’s portfolio and sells it. Real estate is sold at distressed market value, creating affordable inventory to start the cycle again. This naturally completes the cycle, the market heals.

Now the US government buying up bad debt at full absorbing all of the loss that has been generated by fiscally irresponsible banks. There won’t be a decrease of value because these homes are being banked and not adding to inventory at a discounted price. Hopefully, the government turns them into rentals to generate income.

Housing will remain unaffordable. First time home buyers won’t be able to purchase homes and the cycle won’t start over again. If you want growth in the market, there will be a need for “long term “affordable loans. “Short term affordable loans” are what got us in to this mess in the first place.

If we continue to loose jobs, outsource jobs and import, the cost of housing will continue to rise only to damage the market further. The money supply will remain tight, there will be no more spending, bankruptcy will increase, business will fail and people will be forced to sell their homes on sites like this www.BuyMyHouseBeforeTh... only making a case for a better economic rescue plan.