Government Bailouts – Why a Modern-Day New Deal Won’t Work
From the Wall Street Journal on line … Amity Shlaes, senior fellow at the Council on Foreign Relations, explains to Dow Jones Newswires' Simon Constable why the New Deal didn't work in the 1930s and why Nobel laureate Paul Krugman is wrong to think a similar stimulus will work this time.
MarketWatch – Video – Why a Modern-Day New Deal Won't Work – Why a Modern-Day New Deal Won't Work. Amity Shlaes, senior fellow at the Council on Foreign Relations, explains to Dow Jones Newswires' Simon Constable why the New Deal didn't work in the 1930s and why Nobel laureate Paul Krugman is …
The Freedom Fighter's Journal: The American Crisis: The Return Of … – The New New Deal It looks as if we are going to have to relive all of the mistakes of the 20th century, one more time—let's hope it is one last time—before we relearn the superiority of the free market and the disastrous consequences of …
New Deal with Labor for Recovery – Digital Journal: Your News Network – Similarly, in many of communities, children are trapped in antiquated school buildings that are ill-equipped for modern education. The deteriorating conditions of many public schools in Black and Latino communities coveys a message to …
Franklin Roosevelt's Court Packing Scheme: FDR's Plan to … – A divided court had invalidated crucial New Deal legislation in 1935 and 1936. Determined to save future legislation, FDR embarked on a plan to increase court membership.
Will The Government Bailouts Really Help?
Will 2009 be the bottom to the San Diego real estate market bust? Can all the Government bailouts prevent deflation and or depression? Agree or disagree, the video below is worth a look.
Bill Gates questions government bailouts – Bill Gates questions government bailouts. Throwing good money after bad. By Nick Farrell @ Wednesday, December 10, 2008 10:23 AM. Microsoft founder billionaire Bill Gates has slammed governments who consider bailing out their failing …
The Recession & More Government Bailouts – Forecasts & Trends … – The economy, the financial crisis and government bailouts were certainly hot topics for discussion among the large group of family and friends that we entertained over the Thanksgiving holiday and the weekend following. …
Tom Faranda's Folly: Government bailouts, and where to draw the line – Larry Kudlow, economist and CNBC television host and pundit, had a very good posting on his blog this past Saturday. Kudlow's Money Politic$: Where to Draw the Bailout Line? Where to draw the line? That’s the huge political question.
The ID Report – Popular media: Proposed government bailouts? Oh … – Popular media: Proposed government bailouts? Oh, please, no. by Denyse O'Leary ARN correspondent. Michelle Malkin, whose guts I admire, echoes my own view of proposed media bailouts:. I launched a Newspaper Bailout Countdown Clock on my …
Bailout Watch 277: House Republicans Offer Alterna-Plan | The … – Rather than a taxpayer-funded government bailout that replaces private investment, the House GOP plan proposes that the government provide insurance, funded by the participants with a modest FDIC-like fee, which would cover up to 50 …
Govt. Bailout Profit?
A number of top government officials are implying that there is a possibility for the government to profit from the huge bailout. Do you really believe this?
Personally, I wonder if these same officials were saying how strong the economy was up to two weeks before everything hit the fan.
From a 2000 World Bank report entitled "Controlling the Fiscal Costs of Banking Crises," fiscal costs are systematically associated with a set of crisis management strategies. Our empirical findings reveal that unlimited deposit guarantees, open-ended liquidity support, repeated recapitalization, debtor bail-outs and regulatory forbearance, add significantly and sizeably to costs.
Do you recall the S&L crises of the 1980's? This crisis destroyed some 1,400 institutions and took another 1,300 banks with it between 1984-1991. Direct cost to the U.S. taxpayer? Some $180 billion, or three percent of annual economic output.
What about other bank bailouts: Norway's bank crisis of 1987 cost the government 8% of GDP, the Finnish bank crisis of 1991 cost 11% of GDP, and Japan's bank crisis from 1992 onwards cost a whopping 20% of GDP.
Some prior posts on the government bailout:
Real Estate Bailout Bill — How They Voted
So Much For The Bailout
Housing Bailout & Your Vote
#1 EZ Fix to The U.S. Housing Market
Emergency Rescue Package – The Devil’s in The Details
Are the Rating Agencies at The Cause of Our Financial Mess?
Housing Bailout – The Real Cause?
Government Bail-Out – Risk & Reward
Summary of the “Housing and Economic Recovery Act of 2008
Second Home Foreclosure Tax Penalty
Housing Bailout & Your Vote
#1 EZ Fix to The U.S. Housing Market
Emergency Rescue Package – The Devil’s in The Details
Are the Rating Agencies at The Cause of Our Financial Mess?
Housing Bailout – The Real Cause?
Government Bail-Out – Risk & Reward
Summary of the “Housing and Economic Recovery Act of 2008
Emergency Rescue Package – The Devil’s in The Details
Is this a mess or what?
You live in a San Diego new housing development where all homes were sold out in 2004. You and your neighbor paid $750,000 for your identical homes. You have been paying your mortgage on time, but your neighbor is facing foreclosure. As we all know, most San Diego home values are way down from their 2005 highs. So, let's say the homes in this example are now worth $525,000 each. What happens when your neighbor gets his loan modified to $525,000 simply because he can’t afford his house?
Actual clause in the government rescue package:
Sec. 109. Foreclosure Mitigation Efforts
CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS – Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the tax-payer, to reasonable requests for loss mitigation measures including term extensions, rate reductions, principal write downs, increases in proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.
Also, be sure to read these related posts:
Are the Rating Agencies at The Cause of Our Financial Mess?
Housing Bailout – The Real Cause?
The Paulson Plan – Still Wrong
Government Bail-Out – Risk & Reward
Housing Bail-Out … Pass or Depression
Housing Bailout – The Real Cause?
Being a real estate broker for over three decades, I can unequivocally state that the basic facts in this video are correct. Today, everyone is blaming Wall Street or dishonest mortgage brokers. But, one has to trace back the real cause that allowed this to occur.
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Also, be sure to read these related posts:
Real Estate Emergency Rescue Package – The Devil’s in The Details
Are the Rating Agencies at The Cause of Our Financial Mess?
The Paulson Plan – Still Wrong
Government Bail-Out – Risk & Reward
Housing Bail-Out … Pass or Depression
The Paulson Plan – Still Wrong
Government Bail-Out – Risk & Reward
Some folks took risks on buying homes 2-3 years ago with the thought that home prices would continue to increase and they would make off with a good ROI (sometimes with no money down at all). Others took the risk of not buying and possibly seeing the prices of housing running up to a level that those individuals could be priced out of the market forever (like the 1970's steep increases). Paulson/Bernanke are making it sound like they are alleviating risks took by investors -but this can only be done at the expense of others that took risks (and, should be rewarded accordingly when markets show favor to their strategy). Those that have saved money are being robbed through purposeful devaluation of the currency by those that believe that some folks risk taking is more important than others. This is not right -it can not even appear to be right. There is rhetoric which can be used to try & justify such events -but, even the rhetoric doesn't feel right.
So, when a neighbor doesn't pay his VISA card bill at the end of the month, we should all chip in? VISA factors in potential losses -if they do a bad job of this, they might go out of business and people with use AMEX or other companies will pop up instead. In fact, when folks don't pay their credit card bill, VISA (well, via the banks that actually hold the debt) sell that "bad debt" off to collection agencies. Check into it -there's a whole industry out there around bad debt collection. And, guess what, it doesn't involve the debt holder knocking on a few neighbors doors asking them to chip in. I hope that many adamantly oppose both the bailout bill and the whole theory around this anti-capitalistic crap -and specifically harass their elected officials until they get the idea.
What I do KNOW is that Bernanke said quite emphatically at his confirmation hearings that we were not in a housing bubble. How he could reach that conclusion, even in 2004 is a mystery. And he was clearly right on this wasn't he.