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Sub prime loans and recovery

Posted by jarhead on Monday, February 23, 2009 1:21:52 AM
There is a viciousness about the way many on the right are attacking those who currently hold sub prime loans; one is reminded of lynch mob mentality. It is clear that those loans are at the root of our current problems but faulting those whose loans are currently underwater is analogous to blaming the New Orleans disaster on too much rain. What are we missing here?

First and foremost this is a classic case of musical chairs. I personally sold a home just before the market tumbled; Now I don't know how my buyers financed their buy but by today's valuation they took a beating and if there was an ARM in there, even one of the non sub-prime ones, they are looking at a huge problem when that thing starts adjusting-as it surely will with the federal government sucking up all the money in sight. I bought the place with an ARM and if they bought with an ARM we are looking at musical chairs. I got out but they are left with no 'chair'. Lots of homes were sold in the last 2-4 years by folks who may well be sitting back today arrogantly disparaging those who bought their homes for doing so with poor financing. These folks need to consider where they would be today if no one had bought their overpriced home and freed them to move on to greener pastures.

Second is the simple fact that we all enjoyed the economic good times that came with over inflated home prices. No one was turning down work, not selling cars or turning away remodeling work out of an altruistic understanding of how 'wrong' all this spending was. Now that those times are past and we know those loans were are the center of the problem is it wholly inappropriate to try to pretend that we all did not benefit and to try to blame the folks now (musical chairs remember) stuck with those loans.

Thirdly, we live in a representative democracy. That means the folks inside the beltway are our folks; we put them there. When Barney and Maxine staunchly fended off any attempts to reign in Fannie and Freddie they did so with the help of our representatives and as our representatives. When Phil Graham closed ranks with Rubin and Clinton to start this whole expanded home ownership movement they were our representatives. And when the Republican controlled Senate had a chance to act but did not because they 'feared' they would not get the votes-they acted as our  representatives. We got the government we voted into place-just as we have it today.

So I would ask everyone who is so arrogantly and pompously ready to let those currently holding bad loans go under to kindly remember they have a piece of this too. Remember too that we are talking the continued decline of our economy for another 2-4 years until all the ARMs are bankrupt or short sold; and all the jobs that will be lost as the economy continues to decline. The smart move is to stabalize the real estate market and that means bailing those folks with sub primes or even the 'good' ARMs out. If we don't the impact is enormous. How do we do that?

We must mandate that the banks and lenders clean those loans up. I beleive Obama has such a plan, now that socialism by the numbers is in place, he has trotted out the far cheaper and more reasonable solution. But it may, I have not seen specifics, get the job done. Anything short of cleaning up those loans, real fast, will only prolong the economic malaise; and with the money in the so-called stimulus and TARPs we certainly can't afford to delay a recovery!

Tags: economy  
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Obama's Press Conf

Posted by jarhead on Monday, February 09, 2009 11:43:24 PM
I listened to a small part. The part where he blamed the banks for the current problem. So that told me one of two things:
 
1.  He truley has no idea what caused the problem and should just stay out of it all together.
 
2.  He does know what caused the problem and he has no issue seeing the American public as a lynch mob easily led to the first available tree and handiest victim.
 
Either way he has no business being President. The problem we face requires us to understand its root causes to best address a way out. If he does not know how we got in this fix he has no hope of solving the problem. If, as I strongly suspect, he has no desire to talk about how government forced this issue and then stood by, courtesy of Barney and Chris, while Rome was burning his approach is deceitful and we should have no confidence in any solution he proposes.
 
More importantly we are seeing his desire to push us to act in haste without a full understanding of what the effects of this 'stimulus' bill will be. Such aggressivness about haste leads one to think that perhaps there is more to know than he wants us to know. If you wouldn't buy a car or a vacumm cleaner in this manner why would you spend a trillion dollars this way? It is certainly much better, given the size of the thing, to do this a little slower and with better understanding and focus than to rush madly about.
 
I find the support the 3 supposed Republicans are giving this thing deplorable. I will guarantee that they have either accepted a trade off or are trying to appear 'non-partisan' which in these times means going along with whatever the President wants. Not a good definition.
 
 
 
Tags: obama   economy  
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