Financial Chaos In America

The Senate Bill seems to indicate that people with bad mortgages cannot lose their homes. It also gives some tax credits for wooden arrows for Indians and some new carbon sequestering limits on coal fired plants. They can soak the taxpayers with 350 bln right now. The crap runs on for more than 400 pages.

Here is my analysis and a link to the current bill.


The Senate Bailout Swamp and Other Follies: The Taxpayers will Give you Free Mortgages and Get Stuck for Carbon Taxes in Return.
http://rycksrationalizations.blogtownhall.com/2008/10/01/th e_senate_bailout_swamp_and_other_follies_the_taxpayers_will _give_you__free_mortgages_and_get_stuck_for_carbon_taxes_in _return.thtml

We will be stuck with 3 trillion dollars of bad mortgages with no way to get any money from the people who live there.

That is where we are now.

rycK

Oh, and when you see all those shiny new BMWs and Mercedes driving down your street....where do you think they came from?

HELOC anyone?

The problems of Wall Street will spread to every sector of our society if nothing is done. In particular to those that depend on their 401K or other forms of investments for their retirement. If we do nothing to stabilize the markets, everyone else will, at some point and time suffers. This is the real issue. Do we allow the markets to fail and melt away entirely money saved for retirement? Or do we act now before the titanic sinks in further?

The evenings news last night reported over 30% drop of vehicles sales for each of the big three automakers for the month of August. This morning the news reported on a chain of dealerships closing down because people are not buying. This is precisely the concerns I addressed yesterday afternoon when I posted my blog (Financial Chaos In America).

Even with a bail out, there is no guarantee the markets will stabilize and the consumer will start to spend again. But acting now is better than reacting later on the situation becomes more severe.

My take on this – the consumer is out of money without little or no equity in some cases to tap into and because banks are tightening credit requirements, spending on nice to have things is coming to a halt, including spending on automobiles and housing. This situation is not going to change for many years to come. It will take many years for the consumer to recover from this meltdown and for lending institutions to regain confidence in the consumer’s ability to repay.