GET THE FACTS BEHIND THE NEWS
Elizabeth Warren head of the oversight panel setup by Congress
to monitor the Federal Bailout says, “THE GOV’T STILL DOES NOT SEEM TO HAVE A COHERENT STRATEGY FOR EASING THE FINANCIAL CRISIS despite the billions it already spent in that effort”. "Instead the gov’t seemed to be lurching from one tactic to the next without clarifying how each step fits into the overall plan. The overall impression is one of confusion by a leadershp(?) that does not know what it is doing.
One of the reasons for Ms. Warren’s observation is the US does not have an economic strategy or for that matter a strategy for many other important areas.
Professor Michael Porter distinguished Harvard Business School Professor has written in the Nov. 10 issue of Business Week an article explaining why he believes the development of a economic strategy is critical.
Professor Porter notes the American political system as it has evolved with piecemeal reactions to current events. Each candidate during the election presented a set of disconnected policy proposals for their political appeal. Each “approached the the economy with long held ideologies and policy positions, many of which no longer fit with today’s reality. I believe Professor Porter would like to see an organized approach to policies that promote long term growth and competitiveness
Professor Porter has measured the US economic effort against other countries. The US is not in the top 10 as a free market economic in many important aspects. MORE ON THIS.
Sunday, December 21, 2008
Saturday, December 20, 2008
HELP for troubled Mortgage Holders?
THE FACTS BEHIND THE NEWS
The $700 Bil bailout, according to Treasury Secretary Paulson, will not be used to help troubled mortgage holders. Sec. Paulson has admitted he has the authority to use the money for troubled homes but has refused to do so.
Federal Reserve Chairman Berneke has said he is working on a plan to subsidize 30 yr mortgages. However his plan will only help new owners. The plan is not meant for old or present owners.
The FDIC plan for modification of mortgages by extending the life of the mortgage and reducing payments to 31% of monthly income comes closest to helping troubled homes. Even this plan only covers about 20 % of the number of troubled mortgages expected to go to foreclosure in the next few years, The FDIC expects 1/3 of the helped homes to default on the modified mortgages.
It looks to Diogenes like most of the troubled mortgage holders have been left to hang in the wind. The longer the discussions go on without any help the worse the situation will get. The large increase in unemployment rates will only accelerate the downward spiral.
Diogenes believes the President, the Congress. and the public have not faced up to the economic problems. This is a chronic problem of the Bush administration with the help of a docile spineless democratic leadership.. The face up statement can be made for terrorism, education. global warming, etc.
What PLAN if any is the pied piper of Vall St. following?
The $700 Bil bailout, according to Treasury Secretary Paulson, will not be used to help troubled mortgage holders. Sec. Paulson has admitted he has the authority to use the money for troubled homes but has refused to do so.
Federal Reserve Chairman Berneke has said he is working on a plan to subsidize 30 yr mortgages. However his plan will only help new owners. The plan is not meant for old or present owners.
The FDIC plan for modification of mortgages by extending the life of the mortgage and reducing payments to 31% of monthly income comes closest to helping troubled homes. Even this plan only covers about 20 % of the number of troubled mortgages expected to go to foreclosure in the next few years, The FDIC expects 1/3 of the helped homes to default on the modified mortgages.
It looks to Diogenes like most of the troubled mortgage holders have been left to hang in the wind. The longer the discussions go on without any help the worse the situation will get. The large increase in unemployment rates will only accelerate the downward spiral.
Diogenes believes the President, the Congress. and the public have not faced up to the economic problems. This is a chronic problem of the Bush administration with the help of a docile spineless democratic leadership.. The face up statement can be made for terrorism, education. global warming, etc.
What PLAN if any is the pied piper of Vall St. following?
Monday, December 15, 2008
FDA more DRUG troubles
STILL MORE FACTS BEHIND THE NEWS
The list of troubled medicines goes on. After 19 sudden deaths and 26 reports of other problems such as strokes and fast heart rates The American Heart Association has recommended that children given Ritulin, Adderal and Concertin for attention deficit disorder be screened. The Heart Association now recommends a through exam with an electrocardiogram and family history. About2.5 million children and 1.5 million adults take medication for attention deficit hyperactivity disorder.
On Friday, April 25,”In fury and despair people harmed by Lasik eye surgery told federal advisors of severe eye pain and blurred vision. The advisors recommended that the gov’t worn more clearly about the risks of the hugely popular operation”. About 700,000 Americans yearly undergo this operation. Most people do benefit according to the Chicago Tribune article. However about 25% are not good candidates. One percent report serious difficulties. The FDA is promising a major study to better understand who has had bad outcomes.
What are the reasons FDA is failing us? More
The list of troubled medicines goes on. After 19 sudden deaths and 26 reports of other problems such as strokes and fast heart rates The American Heart Association has recommended that children given Ritulin, Adderal and Concertin for attention deficit disorder be screened. The Heart Association now recommends a through exam with an electrocardiogram and family history. About2.5 million children and 1.5 million adults take medication for attention deficit hyperactivity disorder.
On Friday, April 25,”In fury and despair people harmed by Lasik eye surgery told federal advisors of severe eye pain and blurred vision. The advisors recommended that the gov’t worn more clearly about the risks of the hugely popular operation”. About 700,000 Americans yearly undergo this operation. Most people do benefit according to the Chicago Tribune article. However about 25% are not good candidates. One percent report serious difficulties. The FDA is promising a major study to better understand who has had bad outcomes.
What are the reasons FDA is failing us? More
Sunday, December 14, 2008
FDIC Proposes a Mortgage Plan
Get the facts behind the NEWS
Sheila Bair head of The (FDIC) Federal Deposit Insurance Corp. has been championing a plan. Ms. Bair says the plan could help 2.2 million home owners with troubled mortgages keep their homes. MS. Bair is a republican appointed by Pres. Bush two years ago after serving many years at FDIC.
The plan is to modify the troubled mortgages by extending the time of the loan and reducing the interest rates so that payments do not exceed 31 % of monthly income. Under this plan the US Gov’t would guarantee the mainly risky( low down payments and/or weak credit) loans . Under this plan the taxpayers would absorb 1/2 the loss on modified loans if the borrower defaults on the modified loan. She says this should encourage mortgage houses to modify their troubled mortgages. In addition the mortgage house would be paid $1,000 for each modified loan. This p[an has been put into effect for 65,000 Indy-Mac homeownera and is part of the Citigroup bailout
Ms. Bair stated the FDIC expects 1/3(750,000) of the modified loans to default. This plan would save 1,500,000 homes from foreclosure at a cost to the US gov’t of $24 bil. Moody ’s Economy.com expects 10 mi.l foreclosures over the next 5 years.
The Treasury and the White House are fighting this plan Critics estimate the plan would cost $70 bil, Treasury Asst Secretary Neel Kashkart said "the $700 bil bailout plan was to make investments with the hope of getting the money back". He called the FDIC plan a gov’t spending program with no chance of repayment. No doubt there were homeowners who deliberately overbought. However most(personal opinion) homeowners bought in good faith. Many of these people were enticed by gov’t programs offering easy terms and were not protected by any gov’t oversight, federal or local. Many of these homeowners had little experience in real estate or home ownership. Diogenes believes the gov’t bears much of the responsibility for the foreclosure situation.---- more suggested solutions next
Sheila Bair head of The (FDIC) Federal Deposit Insurance Corp. has been championing a plan. Ms. Bair says the plan could help 2.2 million home owners with troubled mortgages keep their homes. MS. Bair is a republican appointed by Pres. Bush two years ago after serving many years at FDIC.
The plan is to modify the troubled mortgages by extending the time of the loan and reducing the interest rates so that payments do not exceed 31 % of monthly income. Under this plan the US Gov’t would guarantee the mainly risky( low down payments and/or weak credit) loans . Under this plan the taxpayers would absorb 1/2 the loss on modified loans if the borrower defaults on the modified loan. She says this should encourage mortgage houses to modify their troubled mortgages. In addition the mortgage house would be paid $1,000 for each modified loan. This p[an has been put into effect for 65,000 Indy-Mac homeownera and is part of the Citigroup bailout
Ms. Bair stated the FDIC expects 1/3(750,000) of the modified loans to default. This plan would save 1,500,000 homes from foreclosure at a cost to the US gov’t of $24 bil. Moody ’s Economy.com expects 10 mi.l foreclosures over the next 5 years.
The Treasury and the White House are fighting this plan Critics estimate the plan would cost $70 bil, Treasury Asst Secretary Neel Kashkart said "the $700 bil bailout plan was to make investments with the hope of getting the money back". He called the FDIC plan a gov’t spending program with no chance of repayment. No doubt there were homeowners who deliberately overbought. However most(personal opinion) homeowners bought in good faith. Many of these people were enticed by gov’t programs offering easy terms and were not protected by any gov’t oversight, federal or local. Many of these homeowners had little experience in real estate or home ownership. Diogenes believes the gov’t bears much of the responsibility for the foreclosure situation.---- more suggested solutions next
Tuesday, December 9, 2008
Ben Bernake suggests HELP FOR MORGAGE HOLDERS
GET THE FACTS BEHIND THE NEWS
Ben S. Bernake, Chairman of the Federal Reserve, warned on Thursday that the soaring number of foreclosures threatened the economy. He then proposed some ideas — government-engineered loan modifications, and more taxpayer money to help people refinance.
At the Treasury Department, meanwhile, top officials continued to work on a plan to bolster the housing market by subsidizing 30-year home mortgages with rates as low as 4.5 percent — a level that home buyers have not seen since the early 1960s.
Since the financial crisis began last summer, both the Fed and the Treasury had focused almost exclusively on patching up the financial system — propping up banks, Wall Street firms, money market funds and issuers of commercial debt.
The new focus on helping individuals could create a bitter split between those who want to buy homes and those who already own them.
The cheap mortgages would be available only for people buying houses, not the roughly 50 million families that already have mortgages and would want to refinance at a lower rate. As a result, the plan offers no direct relief to the millions of people who face foreclosure because they took out exotic mortgages that they could not afford. Nor would the plan offer any benefit to people who have stayed current on their mortgages and would simply be interested in taking advantage of a lower. rate,
How does this plan compare to the FDIC plan. See next blog.
Ben S. Bernake, Chairman of the Federal Reserve, warned on Thursday that the soaring number of foreclosures threatened the economy. He then proposed some ideas — government-engineered loan modifications, and more taxpayer money to help people refinance.
At the Treasury Department, meanwhile, top officials continued to work on a plan to bolster the housing market by subsidizing 30-year home mortgages with rates as low as 4.5 percent — a level that home buyers have not seen since the early 1960s.
Since the financial crisis began last summer, both the Fed and the Treasury had focused almost exclusively on patching up the financial system — propping up banks, Wall Street firms, money market funds and issuers of commercial debt.
The new focus on helping individuals could create a bitter split between those who want to buy homes and those who already own them.
The cheap mortgages would be available only for people buying houses, not the roughly 50 million families that already have mortgages and would want to refinance at a lower rate. As a result, the plan offers no direct relief to the millions of people who face foreclosure because they took out exotic mortgages that they could not afford. Nor would the plan offer any benefit to people who have stayed current on their mortgages and would simply be interested in taking advantage of a lower. rate,
How does this plan compare to the FDIC plan. See next blog.
Saturday, December 6, 2008
Can $800 billion get us out of the DEPRRESSION?
GET THE FACTS BEHIND THE NEWS PART 4
Financial plans to get us out of a “depression” are coming fast and furious. Secretary of the Treasury Paulson with the help of the Federal Reserve Bank has announced an $800 billion fiscal stimulus. This stimulus is different than previous financial helps.
Since the financial crisis began last summer, both the Fed and the Treasury had focused almost exclusively on patching up the financial system — propping up banks, Wall Street firms, money market funds and issuers of commercial debt.
This financial imitative gets closer to the consumer possibly to answer those who believe help should be for main street, where the problems begin and not wall street where main street problems can end up.
This Paulson plan has twor parts. (A)To lower interest rates on loans for home buyers the gov’t announced it will buy up to $100 billion in mortgages held by Freddie Mac and Fannie May. It will buy up to $500 billion of mortgages securities held by the two housing giants plus Ginnie May.
What this means for home owners and the housing markets is uncertain. This may reduce interest rates but not slow the growing rate of foreclosures accordng to the economic experts.
At the same time the gov’t, announced through the TALF (Term Asset Backed Securities Loan Facility) a $200 billion program. This program will loan money at attractive ratea to private investors who buy securities backed by auto and student loans, credit cards and small business loans guaranteed by the Small Business Administration. The plan will also guarantee the loans if underlying securities default.
The prograqm should lower rates for auto loans for those with confidence to buy an auto Good credit card risks have not been effected. Poor credit card risks have been cut back. The effect this program will have on increasing credit to poor credit risks is unknown. Student loans are another area where the effect of the program is unknown due to conflicting opinions. More on the latest developments.
.
Financial plans to get us out of a “depression” are coming fast and furious. Secretary of the Treasury Paulson with the help of the Federal Reserve Bank has announced an $800 billion fiscal stimulus. This stimulus is different than previous financial helps.
Since the financial crisis began last summer, both the Fed and the Treasury had focused almost exclusively on patching up the financial system — propping up banks, Wall Street firms, money market funds and issuers of commercial debt.
This financial imitative gets closer to the consumer possibly to answer those who believe help should be for main street, where the problems begin and not wall street where main street problems can end up.
This Paulson plan has twor parts. (A)To lower interest rates on loans for home buyers the gov’t announced it will buy up to $100 billion in mortgages held by Freddie Mac and Fannie May. It will buy up to $500 billion of mortgages securities held by the two housing giants plus Ginnie May.
What this means for home owners and the housing markets is uncertain. This may reduce interest rates but not slow the growing rate of foreclosures accordng to the economic experts.
At the same time the gov’t, announced through the TALF (Term Asset Backed Securities Loan Facility) a $200 billion program. This program will loan money at attractive ratea to private investors who buy securities backed by auto and student loans, credit cards and small business loans guaranteed by the Small Business Administration. The plan will also guarantee the loans if underlying securities default.
The prograqm should lower rates for auto loans for those with confidence to buy an auto Good credit card risks have not been effected. Poor credit card risks have been cut back. The effect this program will have on increasing credit to poor credit risks is unknown. Student loans are another area where the effect of the program is unknown due to conflicting opinions. More on the latest developments.
.
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