Brains Not Included

Cracked Up, Whacked Out and Completely Out of Control

Bingo! There is a Plan

McCain is getting hammered by the press, by the Dems and by the conservatives.  His egregious mistake?  He mentioned that he would take $300 Billion and buy up all the bad loans and then reset those loans to make them affordable for the homeowners.

Now everybody is hammering him for his plan.  Let me just say this, AT LEAST HE HAS A PLAN!.  He’s not playing the Paulson/Bernanke game and just shooting in the dark.  He’s looked at the problem and said; ‘hey, if the real problem is bad mortgages clogging the system, then let’s get them out of the system.’

BINGO!  If that is the problem, then remove the problem.  What Paulson and Bernanke have done is said they’ve identified the cancer, they see the tumor and it’s in the gut.  BUT, we have to go through the foot, up the leg, through the groin and then maybe we can get to the problem area. 

McCain says, hey I see the tumor, let’s go in there and pluck it out!

I for one do not relish the thought of sitting around over the next three years while the current plan slowly weeds these bad mortgages out of the system.  Furthermore, can someone telll me where the authority was given to Paulson to invest our $700 Billion into bank stocks? ….both good and bad companies…..

So now the Fed is in the business of being a stock holder in America’s banks?  What, are we turning into United Socialist State of AmeriKa?

Look, I’m in the mortgage business so I see this stuff every day.  I’ve seen the bad players and I’ve fought against the predatory lenders.  I’ve watched our stock market and bond markets slowly detach themselves from one another and now they are completely working as opposing forces instead of working in unison.

There is a huge problem out there and at lease McCain has a fix.  It may be unpalatable to those of us who play by the rules and pay our bills on time, but what is the alternative?  The alternative is what we are dealing with right now ….or worse!  Let’s just swallow this one last BAD bite and be done with it.

The more I think about it, the more I’m beginning to think McCain is on to something.

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3 Responses

  1. loudelf says:

    Please don’t take this as argumentative as much as devil’s advocate: Your contention is that at least one candidate has a plan, no matter how bad it is… what if it were to chum the waters, wait for the fins, and go swimming? It IS a plan, but not a good one.

    I for one doubt the wisdom of the government buying bad paper. The end result is the people that have not defaulted, have income, and pay taxes get stuck pretty hard by the McCain plan. I really wish he didn’t throw that one out there.

  2. mdg123 says:

    From the Moderator:

    Loudelf,
    I appreciate your comment and I understand your furstration. I like to equate it this way. If my drain is clogged with a hair ball I have to poor some Draino in it. Could it damage the pipes? Yes! But, if I don’t’ do it then I’m going to have water all over my hardwood floors and that is going to cost me even more money. The bottom line is that it’s bad mortgages clogging the system. Get them out of the system and things start flowing again.

    Thanks for your comments and ideas, it’s always good to hear differing points of view.

  3. loudelf says:

    I agree something has to be done. But our remedy can be just as harmful or worse than not doing anything, so we have to be careful. It’s like if your child has a ‘frog’ in it’s throat… you don’t use Draino to unclog it (stealing your product idea) as it would cause more damage than it would repair.

    I’m not an economist, but have a decent knowledge of business. What my guess is, is that they need to work on a program with banks to work with existing borrowers to refinance into stable, fixed loans (if the borrower wants), and guarantee a portion of these loans, thereby allowing banks to feel comfortable loaning out more money. They need to add some regulations to the securities market to do with these loans, as well as some other. I’m not a big fan of regulation, but the spirit of them is to guide the stray (or greedy) sheep back to the flock. They need to work with companies that may be interested in working a solution to these bad loans, as they may not keep the people in the homes, but may inject some cash into the deals or the market.

    I definitely don’t have the corner on all of the good ideas, but think we need to be sensible moving forward. Even in 2005, I was blogging about the fake economy we were in, and I was laughed at. Nobody seemed to remember the dot coms. Even then, I was arguing that we needed to be more careful not to have a similar crash.

    What I do agree with you on (not that I disagree all that much with what you’ve said) is that we need real action. With all of these brilliant people in and around Paulson, SOMEONE should be able to create a viable plan that the private industry can enact that will turn this corner. We need to take this plan and ram it through and get us back on track… and maybe back to basics.

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