A Sad Day for the American Economy

A letter to my readers:

It's a sad day for America today; our economy and homeowners needed that legislation. The 3rd revision was a strong policy that could of helped build a foundation for the U.S. to regain stability in the equity and credit markets. Instead many people lost 20-30% in value in their 401Ks and retirement accounts today after already being down 20-45% YTD. We have lost 5 large banks (Merrill Lynch, Lehman Brothers, Wachovia, Washington Mutual, Bear Sterns) of which 3 were historical institutions (Merrill Lynch, Bear Sterns, Lehman Brothers), unemployment is up to above 6%, 10's of thousands of layoffs earmarked due to consolidation in the markets. In addition, small businesses and consumers no longer have access to credit to sustain operations or life and now the economy teeters the balance of falling into a deep recession of which may take years for us to pull ourselves out.

No one wants to spend this money however, something needs to happen. Popular media is blaming Wall Street, however, we need to blame not only Wall Street, but Fannie Mae/Freddie Mac, (Underwriting No Doc loans and accepting a large number of Alt-A loans), Home builders, Americans dangerous passion of obtaining more credit than liquidity, our Government for lack of oversight, etc. We didn't get here overnight and we won't get out of it overnight, however, we need a clear starting point and this bailout will be one. There is no guarantees that it will work however homeowners in bad mortgages, foreclosure, pending foreclosure had the ability to re-negotiate with the Fed for better rates to save their homes, preferred equity would of been transferred to the Fed from companies participating in the bailout program allowing for taxpayers to realize capital gains as the markets recover along with dividend premiums paid quarterly. Also, Executives lost the ability to earn golden parachutes as a result of their companies rebounding, and anyone who owned preferred equity in Fannie Mae and Freddie Mac that bailed on the company in recent months thus aiding the share price to plummet would be required to pay higher taxes. This was much more favorable legislation than the 1st 2 proposals.

Review the new legislation and weigh the pros and cons, the unfortunate thing is that this could be the beginning to the end of the U.S. being a true Economic Super Power for years to come.

Let's pray that something can happen before the election otherwise whomever takes the White House may already be in a hole to deep to dig themselves out of in 4 years.

Jouran