Change of Plans for that $700 Billion...

[85 Cutlass Brougham]

Well, the government will no longer spend that money to buy bad mortgage paper. So the whole reason we were sold on that bailout plan was just a bold faced lie. Now, credit card companies will be bailed out, and the government will start buying up large stakes in companies instead. Now, Detroit is set to be bailed out and the auto companies will have to take product dictates from Washington if they want the money. Plus, the government has already loaned out over two trillion dollars, but won't say to whom. Am I the only one who sees this all as disturbing? I think that in the long term, this is far worse for the economy than allowing these entities to fail.

Here's a story on some of what I covered. http://abcnews.go.com/Business/wireStory?id=6234375

 

[Tony_SS]

Well one good thing is to work with folks who are trying to make their house payments in good faith, but if you're in that position the smart thing to do would be to just walk away since you'll never own that land and in a sense are just leasing it for the rest of your life.

But something to consider from all this is the possibility for massive hyper-inflation that's going to result from creating 3.5 trillion out of thin air... tax cuts for the middle class aren't going to help anyone when the cost of living triples.

 

[85 Cutlass Brougham]

The thing is that housing prices went up well beyond their actual value, much like oil did. I mean, my house at one point had almost quadrupled in value in 10 years, yet real income did not. It should have been obvious to all involved that this trend could not sustain itself. Construction jobs went up not because these properties were all finding occupants, but rather because they were being traded as investment vehicles by speculators. Now that the value is gone, so are the speculators. So, the housing market will NOT recover all it's value even if the economy rebounds. Oil went up after the housing prices fell because it was seen as a safe vehicle by the speculators, but again the prices were not economically sustainable. Let's not forget about the first bubble: The Dot coms. Once again people bought companies based upon rising prices and the greater fool theory rather than supportable value in these stocks. Companies that had no profit were trading for hundreds of dollars a share.

 

[Tony_SS]

I would've sold it! Here in the midwest values went pretty much unchanged for the most part the value of my house didn't skyrocket - if it did I would've cashed in. Too bad for the folks who bought into those traps, now they are in a life of debt and/or bad credit. Like I said, if I was upsidedown on my house there'd be no reason to keep on paying.

Its like buying a new car. Just because the price is on the tag doesn't mean it's worth that. Soon as you get home with it you're in the hole unless you put a huge amount down-thus your still in the red. Which is why I will never in my life buy a new car ever again. I currently owe more on my HHR than its worth but its not worth ruining my credit to drop it off at the bank with the keys.. I simply just have to keep it until its paid off and get the most I can out of it. Thats not a bad thing since I get 30mpg and its a nice little family cruiser.

It's almost like the housing crisis was engineered. They create the problem, cause the crisis then offer the solution in the form of a 5 trillion dollar bailout. They let the small banks fail so large ones can buy them up for pennies on the dollar, consolidating their wealth and power and now they don't even need the bailout money for its intended purpose, but they have it at their disposal. Thus we work for the gov, not the other way around.

 

[85 Cutlass Brougham]

I almost think all of this was engineered by large corporations that stood to benefit from an Obama administration. Excessive legislation always favors large companies more than small ones as larger ones can amitorize the costs better than small ones. I wish I had sold the house back then, but I had too much crap and nowhere to put it all. I should have junked the old cars, packed up and left with some clothes, my computer, tools and truck and went back to live with my parents. Then I could have gone back to school and worked very little instead of struggling now.