I haven’t been blogging this past week as I have been trying to stay on top of the bailout in order to help my clients with their current choices. With so much political spin, it is tough to figure out what makes sense for many people. Buyers and sellers are asking…”so exactly how does this impact me?”
One of the links Matt put in his blog was for economist, Nouriel Roubini. He wrote a post Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefiting only the Shareholders and Unsecured Creditors of Banks,
In the post, he talks about financial crises around the world and what we can learn from how they were handled. He ended his article with this conclusion about our current financial crisis and thoughts on the bailout.
“Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders
and investors that provides little direct debt relief to borrowers and
financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money
markets and interbank markets that are now close to a systemic meltdown. It is
pathetic that Congress did not consult any of the many professional economists
that have presented – many on the RGE Monitor Finance blog forum – alternative
plans that were more fair and efficient and less costly ways to resolve this
crisis. This is again a case of privatizing the gains and socializing the
losses; a bailout and socialism for the rich, the well-connected and Wall
Street. And it is a scandal that even Congressional Democrats have fallen for
this Treasury scam that does little to resolve the debt burden of millions of
distressed home owners.”
So for the buyer and seller that want to know exactly how this impacts them, my current response is…due to greed the financial markets are tight. What this means is that there isn’t enough cash flow to help buyers obtain a mortgage. If they can’t get a mortgage, you can’t sell your home.
That is how this impacts you.
(c) Copyright, 2008. Melina Tomson, All Rights Reserved (ie…be nice and create your own content. Don’t steal mine…)