Could You Please Repeat That?

How about this excerpt from an article from CNBC.com. explaining Congress's plan to speed up the financial debt clean up:

"The moves cap a week in which financial markets faced their most serious confluence of crises since the Great Depression in the 1930s and threatened national economies and the worldwide banking system."

The Depression?? Are you kidding me? Nice.

You know it's bad when today's financial crisis is being compared to the worse financial disaster in the history of the United States. The Feds have pledged to throw at least 1 trillion dollars between buying up debt and bailing out financial institutions.

Is 1 trillion enough? Here is a quote from the same article from Treasury Secretary Henry Paulson: "We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses.The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy."

I think the Secretary is going to find that the roots of this problem are deep and multiplying fast. I give the Feds much credit for stepping up and doing what they can to help solve this financial crisis to give investors confidence in the markets.

As always, the taxpayers are going to pay for this for a long, long time. I only hope that the 1 trillion does the trick and this pre-depression economy gets turned around fast. While I know that we are saving (or trying to) retirement funds, investment funds, stocks, banks, investment companies and whoever else has their hand out, I think that there is one crisis that we need to help and it affects millions: Falling house values.

While it is good (and I guess now, necessary) that these high powered financial companies are getting help, I am concerned about the millions of homeowners who are upside down on their mortgages and now owe more than their house is worth. Expecting when selling their house to at least break even, most of these homeowners have to bring money to close or go through a short sale which ruins their credit. Or even worse, the millions of homeowners that run out of options and have to face foreclosure.

Until falling home prices are stabilized, I believe we are still going to be in crisis mode in this country. The idea of owning a home is truly the American Dream. In most cases, a home is only investment that people have. A home serves 2 purposes. An investment and you can live in it.

I know we have to protect and bailout the big guys. The amount of dollars at risk is to great to avoid.

But lets make sure we save a little out of the 1 trillion for the little guy. To me, saving homes should be the priority here.

We can't let the American Dream become the American Nightmare. After all, didn't we do this in 1929?

If you have any comments on this article, I would love to hear what you have to say! Feel free to comment below.

Thanks for reading!

Dan Tenchall
Great Lakes Mortgage Funding

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