With all that is going on with our Economy, I felt that it was time to weigh in on the situation. Of Course there are a whole gamut of reactions to it and I'd like to point out that all of my information is culled from NPR's Planet Money. I find that the blogs and podcasts are very informative and they take on listeners questions and explain the workings of Wall Street in a way that I can understand.
So the White House and Secretary Paulson came out a few weeks ago and said that our economy is on the precipace of certain doom. They presented Congress with a 3 page bill that gave Secretary Paulson unprecedented control over 700 Billion Dollars to stabilize the financial markets. This would be done by the USG buying the so called "Toxic Waste" that was sitting on Banks balance sheets. These were mortgage backed securities that had an unknown value.
Of course, Congress would have none of that. This made me happy. I viewed this as an attempt by the White House to grab more power than they have already. Congressional leaders worked with Fed Chairman Bernake and Sec. Paulson to craft a bill that would work in some safeguards and no just give a blank check to Sec. Paulson.
This was defeated in the House of Representatives on Monday Sept. 29th, 2008 and that defeat lead to an unprecedented 777 point drop on the stock market. Over a trillion dollars was lost!
Stockmarket aside, the main issue that I see is this CREDIT.
Credit runs the world and as credit tightens, the cost of credit moves upward. It cost more to borrow and credit is harder to come by. Business will freeze up. More and More People will not be able to buy Houses, cars, furniture, and other goods and services.
This situation is especially important to me and others like me who make their livelihoods in sales or people that want to buy a home or a car. If there are fewer buyers, there will be less money to be made in my field of choice, real estate. I'm sure that I can find a few people who would like to see a financial meltdown, but by and large, most people don't want to see the Economy go in the CRAPPER! So please contact your representative and let them know that you support the bill.
