Financial Crisis has a Stranglehold On the World

The world's markets are down 5 straight days with the Dow Jones Index being around 9400 points as of yesterday. The bailout has been approved, the Fed has released nearly $900 billion in emergency funds to begin issuing loans, shore up money markets, and provide emergency relief to the financial markets. Everyone is calling for a united front from the World Banks however where are the retail banks at in this equation?

The source of this crisis involves only 6% of all mortgages and a immediate relief can come if banks such as Bank of America, JPMorgan Chase, Wells Fargo, Thornburg Mortgage, etc begin rapidly refinancing mortgages immediately to save homes. As mentioned in my previous blogs executing a 40-45 year fix rate mortgage refi would begin to save the housing market. In addition, begin issuing new loans to help restart Main Street. It appears that many of these banks are like "I made my money now time to jump ship." I think the Treasury department is doing the correct thing in holding off on buying these mortgages due to the fact that the banks aren't doing anything yet to stop the bleeding. The tourniquet will begin with them not with the government. Congress press banks to refinance these mortgages and then use the bailout money to buy quality investments. Intervention must start now...they must be waiting for an open invitation; ok so here it is, it's pretty bad for your customer base lets do something.

Positive Note

One may say what is positive here, but there is always something positive in every situation. Over 2 trillion dollars have been lost in shareholder value over recent weeks, however, this can create some tremendous buying opportunities for the long term. This may be the time or nearing the time to begin buying investments in strong, steadfast companies that would have otherwise been too expensive previously such as Mcdonalds, Coke, Procter and Gamble, etc. It's not consoling but remember it will not always be bad, the markets and the economy will get better.

In the meantime, let's begin to petition our Congress persons, the Presidential Candidates, our State officials to begin to press banks and financial institutions to begin helping these homeowners out in drones and now. With the first country on the brink of going bankrupt, yes country, let's press them to do something now and save our world.