I’m tired of the “wah-wah” sob stories and all of the pity parties by the media and the politicians. It seems that we are digging and digging and the hole really is getting deeper — but somehow we expect that we are filling the hole. It just does not make any sense to me and I have not met anyone who thinks it does. What is going on?
Here is my plan: I think I am going to go spend a ton of money and go into even more debt. And oh, by the way, my goal is to reduce my debt by 50% by the end of the year. What?!? Are you ready to put me in a looney bin? Well, yes, I think it is nuts too, but if my hearing is still intact, that is what our President is promoting.
I don’t have all the answers, but it really seems to me that if the banks could loan money, then people could buy houses and jobs could be saved. If people could buy houses, foreclosures or pre-foreclosures could be sold and the real estate market could begin its uphill fix. If the real estate market could work again, agents, mortgage brokers, banks, construction and all of the related industries could employ people instead of closing and laying off their employees. Wow, what a concept?
Okay, so how do we make it so the banks can lend money? Well listen up, because this is a “FREE” solution — not one penny needs to be spent to get this solution in place. Mark to market rules require that banks revalue their investments every day based on the current market value of their bonds and investments. So, for example, if they own bonds that are valued lower because the market is in the dumps, they have less money on their books and based on reserve rules, they can loan less. This is the case even though all of the principal and interest payments are being paid on time. So if I have a $100 million bond on my books and all of the payments are current, because it sells in the market for $40 million today, I have to write it down on my books. This rule had its place, but the current market is not it! This rule needs to be modified or removed at least temporarily to allow the banks to get themselves back in the business and allow the market to self-correct.
I’m not so smart to have thought this up myself, but a very bright guy, Steve Forbes, has been talking about this since the election last year. Hear it for yourself on Fox Business. Honestly, Steve is a brilliant financial guy — its a shame that he is not our Treasury Secretary.
Stimilus does not equal just spending money. Stimulus has to have serious ideas behind it and this stimulus is laughable (or more so “cryable”). Our country is going down the tubes in front of us and not too many seem to be speaking up! Let’s all do our part and speak up!