Bonzer Wolf™ (bonzerwolf) wrote,
Bonzer Wolf™

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Obama is Destroying the Nation

Washington is AWOL right when we need them, Jim Cramer  of CNBC said Friday. Will more banks fail? Will they be nationalized? The Dow reached new lows yesterday because Wall Street didn’t have the answers to those questions. Instead of worrying about climate change, or even the war in Afghanistan, President Obama needs to focus on this financial crisis. Otherwise, Dow 6,000 is a very real possibility.

The new administration has failed to act quickly and decisively, and as a result the damage has spread far beyond just the banks. All across the market, large-cap companies have shrunk into mid-caps, and mid-caps to small-caps. Just a year ago, the 100 largest companies were worth $8 trillion. Now they’re worth $5 trillion.

So what to do?  Cramer, of course, has a plan: The government should offer 40-year, 4% fixed-rate mortgages or refinancings to everyone – not just those overextended homeowners. Those mortgages would be valued at current market price so no one is underwater, and in return the lending banks would get Equity Participation Certificates for the excess principal left over after the revaluation. The banks would then use these certificates as money for regulator capital, with no mark-to-market rules so they can work out their problems themselves. If the homeowner sells their house at a profit, the balance would first go to the banks, and any remaining money would then go the seller.

The keys, regardless of the plan Washington puts in play, are to keep people in their homes, save the banks and create jobs. Until Obama and his team step up, the market’s down days will continue.
Tags: economy, obamanation, politics, recession

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