So I just listened to Bush's 14 minute address at 6pm about our economy. Are our leaders of this nation just plain retarded?!? Highlights from his speech
What we will be facing:
- deep financial crisis not seen since the Great Depression
- million so of job losses
- stock markets crashing (will affect those that are about to retire)
- home prices will go down
- number of foreclosures will go up
- businesses will fail
- long recession Cause
- low interest rates and easy credit
- excessive home construction leading to supply that can't be met by demand
- massive home speculation believing home prices will always go up
- bad borrowers who could not afford the loan they were given
- mortgage backed securities were sold off to investors and many assumed these investments were trustworthy
- when housing declined this caused a domino affect across the spectrum
- Bear Stearns and Lehman ran out of money since they couldn't rid themselves of these securities
- more banks holding onto their money and froze lending and credit
The Plan
- The Rescue Plan (aka stupid bailout)
- upto $700 billion of taxpayer money will be used to remove these mortgage backed securities at the current low prices
- they will then sell them back at perhaps a profit and give them back to the taxpayers
- mortgage backed securities will gain in value because the majority of people will pay off their mortgages
- restructure executive compensation (in order to prevent fraud)
- plan needs to be invoked asap
- restore confidence Change
- We are running economy on outdated 20th century laws
- need to add regulations but still not inhibit Wall Street from growing
- this is still the best country to invest in and we will absorb this shock and bounce back
- blah blah more rhetoric about the US being a great nation Minh's Take
We must let this downturn take it's course. This is the ONLY way to fix the problem. Yes, jobs will be lost, many people will be hurting, retirement funds may disappear, and we will go through a long recession but this is the natural process in order to get the economy to grow again. Things need to rebalance. This so-called fix will only delay the inevitable. So Bush pointed out that easy credit and lending created this mess. But his solution? To pump in money to allow them to provide credit and lend again. Ummm yea. $700 billion dollars will not be enough to fix this. This money will go down the drain trying to rescue bad businesses (yes, taking bad loans off their books is in essence rescuing these firms). So far we are only halfway through this mess and the subprime housing market might not be fixed by the $700 billion. Once the Alt-A loans and Option ARMs start to reset, we will begin to see the second half of the housing downturn. So what next...do we take another $700 billion from taxpayers? Back in 1998, Japan did a very similar thing. They pumped in half a trillion dollars in order to stop the crash. What happened next? The stock indexes jumped up around 50% in less than 2 years but then it ended up crashing 50% below the 1998 levels. All that money down the drain trying to save bad businesses. If this plan passes, I will be cashing out on these short term stock gains and then buy back in after a severe crash. Bush also says we must stop housing prices to go down and prevent foreclosures from occurring. How will he do that? Will he twist my arm and point a gun to my head and make me buy a home for more than it is worth? Will he allow homeowners who had no business getting these huge loans from foreclosing? So far I've taken a quick glance at the 44 page bailout plan and there's nothing really concrete written down. So the government will pretty much take $700,000,000,000 of our money and spin the roulette wheel to see if this plan will work? Yeah, good luck with that. Argh! | 
