You want to know why the average citizen is to the point of not caring anymore about politicians promises. Just look at the financial headlines today. PNC just purchased National City Mortgage, and guess what they used to do it? Yep, that's right...your money folks!! Now I'm sure the devil is in the details, and some nice spokesman from PNC will assure the world that this is only a temporary use of bailout cash, and that this will now make PNC feel secure, and allow them to offer better loans to consumers and small businesses. Yeah right!!!
The problem is that we just gave a blank check to these banks, and there is no reason for the banks to move the money back into the market by offering loans. So banks are going to conserve and hoard cash, keep their stock holders happy at this point, and the cycle will get more vicious!
The federal reserve and Poulson need to start thinking about the root of the problem and stop worrying about saving their buddies jobs at Goldmen Sach's. The "mortgage loan" is the key to this financial crisis, and until they address it in a bigger way, we'll continue this downward slide into oblivion.
I heard this morning that they are just now starting to consider giving money to banks to stem foreclosures on main street, but this should have been the focus of the bill all along. Now we're going to need two or three times the $700 billion estimate to calm the jittery bankers and take care of main street.
Now I don't think the banks are the bad guy's in the equation. Far from it, they are just trying to keep the lights on while their asset values plummet. The problem is your throwing good money at the symptom instead of the root of the problem. The problem now is that we're in a vicious circle of deflating real estate values. As long as the values continue to drop then any money you invest in these banks will be lost in value as well. Because the banks will be still unable to buttress their asset values because their portfolio's continue to hemorrhage due to deteriorating real estate values.
The answer is to help stabilize homeowners by going directly to them at this point. I gave a perfect example of how to do this and I don't know why anyone with a MBA can't figure it out as well. Please people, call your congressmen and Senators and share with them that the solution lies with the homeowner!!!
Possible Solution to this mortgage Mess ( yes they're maybe some problems with my simpleton solution, but it could be a good framework)
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