Are You Stimulated Yet?

Most of us are becoming numbed by the repeated news that the debt is escalating by the trillions, one government move after the other, and the seeming indifference of legislators and the executive to this uncontained profligacy. The pervading sentiment is fear, and rightly so. One bad move after another has the taxpayer owning banks with negative assets, car companies, and now pretty soon if the health bill passes, another insurance company styled after medicare. No one in government currently has run so much as a candy store yet they want to continue to expand their control, the impending bankruptcy of Social Security, Medicare/Medicaid, Fannie Mae, Freddie Mac not dissuading them in the least, nor the losses at the Post Office in the billions nor the huge losses at FHA and Ginnie Mae.
Since 2000 there have been 131 bank failures requiring FDIC intervention, and to get a sense of the momentum of the problem, 28 of those happened between 2000 and 2007, 26 happened in 2008, and 77 so far this year with over a third of a year yet to go. Over 300 banks are listed as "troubled" so more to come no doubt. One of the 77 was Colonial, noted in a previous blog, about the fourth largest failure so far just behind IndieMac and Washington Mutual.
Foreclosures persist as a downward influence on housing prices and is not likely to end any time soon, and unemployment figures are discouraging and continuing to worsen. The ability to purchase a home is constrained by very stringent lending policies, although strong credit is a great driver and allows us to find amicable lenders for most applicants. Refinancing is difficult because of the sharp reduction in asset value. For those with a stock portfolio we can provide security based loans in the range of 2.5% to 4.5% fixed rate. Just one more way to convert an asset to a different form and perhaps free up capital for some other purpose.
The fear most of us feel is from the lack of confidence we have in government's ability to make wise or prudent decisions. Most of what we see is ego driven behavior without any concern for long term consequences, and that's frightening. The greatest country in the world is being brought to its knees by greed and ineptitude and its time for that to end. Town Hall meetings are a beginning, but the ballot box beckons.
As Usual
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