I learned three things listening to Secretary Paulson on the Bailout program yesterday:
1. Paulson is a worse public speaker than Alan Greenspan (something I didn’t think possible), leaving a more confused image of the Bailout Program behind him.
2. Homeowners will now not benefit from any kind of mortgage recovery from the Bailout, as it is now all going to keep banks afloat.
3. Since thee has, so far, been no oversight by Congress over the program, Paulson can do anything he wants without accountability.
In other words, we are screwed.
This morning’s New York Times looks at it this way:
The nation’s banks and other financial firms also are undergoing a necessary correction for which there is no silver bullet. But that hasn’t stopped Mr. Paulson from intervening forcefully — using taxpayer dollars — on behalf of an ever-expanding cast of bailout recipients. The tight fist is reserved for homeowners.
That is a huge policy error. The whole point of the bailouts is to stabilize the financial system. But the system will not stabilize until house prices stabilize, and house prices will not stabilize until the government finds a way to stanch foreclosures on a large scale.
Paulson, of course, wasn’t even in attendance at Bush’s Tuesday morning rollout of a new foreclosure prevention plan.
Sheila Bair, the fead of FDIC had made a proposal that (according to Reuters)
would have the government underwrite failing home loans, but Paulson said that kind of aid would break from the rescue fund’s aim to stabilize financial markets.
“That is a subsidy or spending program. The TARP was investment, not spending,” said Paulson, who holds the purse strings to the Troubled Asset Relief Program (TARP).
So we, as middle class homeowners, can now be aware of the fact that the billions of dollars in mortgaged properties nationwide are not assets. Democratic lawmakers, within hours, started pressing Paulson to change his point of view.
“It is my sincere hope that Secretary Paulson collaborates with Chairman Bair to get this program up and running as soon as possible,” Senate Banking Chairman Christopher Dodd said in a statement.
It remains to be seen what happens next.
I’m betting we have a ways to fall yet before the depths are fully plumbed. 500,000+ filing for unemployment benefits last month is a telling figure.
Of course,Paulson is against bailing out homeowners. Without a huge number of homes on the market at distress prices, how could his Wall Street buddies make a killing on Real Estate. Crony Capitalism lives.
I don’t know about you guys but my “worry meter” keeps going up on each day’s news. This is NO BS. Foreclosure rate exploding, GM is getting ready to stop producing 6 of its major models (keeping only Cadillac and Chevrolet) regardless what the government does to help, big Cities like Philly and NY getting in the bailout line behind the insurance companies and the State Governments, Paulson wandering around feeling his way wrapped in a total fog.
Guess what? All this confusion spells out one thing for me and that is we are about to experience one final gigantic economic CRASH followed by the bone chilling silence of a deep DEPRESSION. The way I see it unless the Nation is saved by Divine Intervention we should be there before New Years Day 2009.