What Hummers and "The Plan" Have in Common

Newt Gingrich spoke briefly about his recommendation and it sounded promising and interesting. Fox News should allow him to do more briefings about the points he mentioned, so the public can learn more. Obviously, when the bill was proposed in Congress and Clinton signed off on it, the people approving it did not understand the full ramifications/downfall and the epidemic we face now. Obviously they did have a knowledge of the goal to increase the economy, jobs, homeownership, and wealth for the financial sector, Wall Street and the world. I took Economics, law classes, Statistics, Microeconomics in under-grad and graduate school. This bill sounded unsafe from the beginning, and now what I have learned thru various programs with Fox News, the downfall is far worse than the benefits, and we find the goal was never met. Those that defaulted on these funky mortgages are not homeowners today! I hope I can sell my home with a acceptable profit, BEFORE, these defaulted individuals can get their credit cleared thru time, and they can qualify to get loans. It is awful that the people with power (Part of: Congress/Govt Agenies/Financial world/Wall Street) frequently turned a deaf ear to the people in power who realized that this bill is creating an economic epidemic (Part of Congress and diff economic grps). This is a contagious epidemic. I am the classic example: have one car and it is a Hummer, as we work with the same employer. It hurts at the pump, but we do not drive much anymore. It affects our spendable cash. We love the vehicle and use it to haul a camping trailer. We hope we can get parts later on. We have been making more than the required big payment, and owe less than $9,000.00. We are going into retirement next yr, want to relocate out of CA, had planned to sell our home and use equity to help buy another home and pay off our other debt. Our equity value is so diminished because of this housing debacle. Part of this plan should be to give back equity or a portion of it to those making payments regularly. Obviously our good credit does not count. I tried to lower my payment because of the lower interest rate, but was turned down because of the appraisal. Now our plan is to get another job, probably diff employers, buy a used car, relocate and rent our home, place our household goods in storage, and live with family until we can sell with some profit and buy another home. We will keep the house and the Hummer, one to ensure our credit stays good, and two - on down the yrs buy another house, and three - because we love the Hummer. Maybe my great grandchildren can sell the Hummer to a museum for a higher price of $10,000.00 in todays value. Your analogy shows my family is a HTM. My isn't life grand! ;-) Excellent article.

I have a question about the Mortgage Backed Securities. If a security has been packaged and sold to an investor, do they benefit from this plan.

A reminder: Democrats and Republicans in Congress don't understand economics. Only economics they understand is the personal wallets so they can get reelected. How much money has been wasted on earmarks,pork barrels on useless projects? Now does Senator barack obama seriosuly understand mortgages? Welfare housing that some communities perhaps didn't want to take on? One has to wonder if this congressal incumbents of both parties are going to feel the wrath of the voters becouse they didn't satisfy thie constutients. Oh by the way on Lou Dobbs on CNN last night 57% of the Democrats recieved money from Freddie and Frannie. That includes Dodd and Obama. Will the FBI find some incriminating embarrassing evidence that migh make some Democrats blush? Only the Shadow knows.

It seems to me that there is a middle way. Instead of trying to get it at the lowest possible proce, and perhaps, not getting it at all, why not bid, say, 10% above the fire sale which still should be much lower than the final value at maturity and leave room for a profit for the government and also have an incentive for the present holder to sell now.

FANTASTIC analogy Brian. That puts things in perspective for those who are not forensic accountants. I say go ahead, do whatever you have to do; and bail out AIG, banks and the auto industry – but I want 80% equity in each company to go into social security custodial accounts that cannot be touched by any government representative. They should continue to be run by the private sector but the people bailing them out should be given equity. The current management should be ousted and the taxpayers should get at least one seat on the boards of these companies. Perhaps the seats should be elected positions. The companies can take it or leave it if they can get a better deal without the tax payer. My complete essay is called “I’m Not your Sugar Daddy” http://www.tableofwisdom.com/MrArbitrage_on_Market_.html

Brian what struck me about the hearing yesterdays was the fact that they couldn't find a price for a murity price. From my perspective Maturity price would vary with the intrest rates. Now they can't find a maturity price fix. One more thing: most politicians are real clueless about economics. How many congressmen and women have studied econ 101? or Macroeconomics? Or Stock market 101?