What We Need From Obama
November 10, 2008
The issues are multi-faceted, but not insurmountable. The primary problem is the number of foreclosures on the market with more to come. But our data indicate that we might have peaked out in the number of foreclosures already. Lets hope that this is the start of our economic recovery.
Numbers from the National Association of Realtors state that only about one percent of all outstanding mortgages are in default; Moody’s estimates about 1.2 percent. Traditionally, the foreclosure rate is about one-half percent of all mortgages, so the number has only doubled in these turbulent times.
Lenders have all tightened up on their underwriting guidelines, so defaults due to unqualified borrowers should diminish, if not all disappear entirely. The prices have somewhat reached the bottom, and so defaults due to falling prices should also decrease. It will take about another year to work through this pipeline of bad loans, and then our mortgage and real estate industry will correct itself again.
One of Obama’s jobs is to monitor and pass legislation to make this process run smoothly, with the least amount of pain to the general public as possible. In order to make this a successful transition, the solution will have to include some aide to homeowners while minimizing lender losses without putting too much unnecessary financial burden on innocent taxpayers.
This will be a balancing act for the next twelve months. The decisions he and his cabinet will make will not all be pleasing to one side or another, but they need to be made in order to insure that our nation continues to be strong financially.
With capitalism, the market forces will work itself out with or without government intervention. But with the proper guidance and direction from those high above, the process can be made much more palatable.
Best of luck to our next president. We will all be watching.
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3 Responses to “What We Need From Obama”
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I think the main issue is that our policy makers are following CPI datas that are either not properly measured or the basket of goods are not properly weighted. It’s very difficult to get a job done if you don’t have the right tools. With all the technological power this country possess our financial tools seems so obsolete. This financial crisis is not part of some economic cycle, it’s a crash and burn. It is either a conspiracy to hold down all the poor people on this planet, or someone fell asleep at the wheel.
The way the CPI has been measured has so changed over the many years that it is no longer accurate. John Williams who runs
http://www.shadowstats.com/
Has a free report on the coming hyperinflation at
http://www.shadowstats.com/article/292
that is also linked to on his home page.
The American dollar will probably be devalued up to 90 percent overnight very soon. The American dollar was recently manipulated upward and gold, silver, and commodities were forced down by these actions. Unfortunately this set off a chain reaction of deleveraging which is now leading to the Federal Reserve’s attempt to hyperinflate the money supply in an attempt to avoid a deflationary depression.
The Fed chairman Ben Bernanke is known as “helicopter Ben” because he as stated that you can always create inflation and one of the ways he stated how to do this is to literally “drop money from helicopters”
The American dollar is now NOT linked to gold and thus an UNLIMITED number of dollars can be printed to fight deflation.
Dear Huang Fong:
Bull’s-eye.
Again.
And on two fronts as well.
If CPI is the cost/price/index, you are truly on the mark.
As for crash and burn and further screwing the “poor,” all that and more.
P.S.: Obama’s early choices continue to scare m e, especilly today’s note that he embraces Lieberman in “the Party.” Is this “talking” to our opposites, or is he simply paying lip-service?