Continuing on from Part 1 This will detail how we got here and how long we will be in the recession.
Guess what! Home Mortgages are among the largest revenue producing entities in the nation. With all these banks merging and buying each other out now that they are allowed to also do investment, commercial and insurance loans Freddie and Fannie backed these banks loaning money's and essentially went back to the roots of why these so called "private" companies Freddie and Fannie were formed. Remember, they were formed to encourage homeownership by buying the mortgages from banks. A New York Times article in September of 1999 stated that Fannie Mae has been under increasing pressure from the Clinton administration to expand mortgage loans among low and moderate income people and the corporation has loosened its lending requirements to comply. ie Amortized loans! Offering homeownership to low income families sounds nice doesn't it?
Ahhh here we are to the truth of how we got into this recession. From here you can understand that the idea of homeownership for everyone in America is a great idea, however, homeownership is a priviledge not a right. Just like Welfare was a good idea to help low income families, mainly the black population to grab an upperhand and have a more successful opportunity in the job market, it simply held them back by showing those on Welfare, it doesn't matter if you work or not, the tax payers of America are here for you and will pay for you to live in poverty. Simply, this banking "competition" act just like welfare puts those in low income situations into a worse situation by providing them opportunities that are designed to fail. It's nice to want to help, but Federal Government, get your hands out of it, you keep failing the American people and taking the low income families lower! We are all humans and feel compassion, allow us, the American people, the opportunity to help our communities ourselves. Give us support and backing not regulation.
Before I get off on my tangent, lets get back on track. We've discussed how we got here now lets talk about how long we will be in this recession. The short of it, NO ONE KNOWS. That depends on the American people. The idea of offering incentives to homeowners and home buyers was a good idea, however, we are now in a more serious situation. No matter how far you drop interest rates, no matter how many first time home buyer incentives you create and no matter how many tax breaks or stimulus plans you create....we WILL NOT get out of this recession if there is a strong lack of job security. You want to know how long it will take us to get out of the recession? I ask you, how long before you stop listening to the media to horde your money? Instead go out and spend money, don't over spend and buy things you don't need, but take that much needed vacation you deserve, instead of going to Cancun, go to Disney World, Six Flags or somewhere in America. American's don't wait on the government to bail us out, they're the ones that got us here. Instead, lets create our own stimulus package. Spending money creates business. Demand goes up, Supply goes down and the economy and trading increases thus bringing us out of the recession.