It’s nearly total chaos out there of late. But don’t give up hope yet. We’ll get through this debacle and shall emerge victorious once again. We always have, we always will. A friend of mine said to me, “Just don’t read email, newspapers, or watch TV anymore!” We need a break. All the poor jobless should be in our prayers as U.S. unemployment tops 12 million, and grows.
Obama is catching it from all sides. I wouldn’t want to be in his shoes. Nothing he’s doing seems to be working. In all fairness, we must give his programs a chance to work. With any luck, they might. Obama said, “The recovery plan won’t turn our economy around or solve every problem. All of this takes time and patience.” Do you have a better idea? I say, be of good faith during these troubled times.
Since there’s practically no good real estate news let’s focus on the economy, which affects every aspect of the market. Some lenders are in near lock down. The key to our credit problem lies with Congress. They’re going to have to go along with as much as an additional $1 trillion to deal with banks’ toxic assets, which are dragging down home loans, business loans, on and on. We’ve got to get the money moving again, period, or we’re never going to break this gridlock. I’d rather get a root canal than apply for a loan today!
Troubled banks will get a deal they can’t refuse. If they fail the upcoming government stress test, they’ll have to take the aid route. Geithner and company figure any banks teetering on the edge will have a strong incentive to sell to investors. Uncle Sam would prime the pump by giving low interest loans to private investors to buy bundles of their home, car, business, credit card, and student loans. That would free up reserves so banks could make new loans.
If that too unfortunately goes sour, Treasury will then take over those banks and investors would walk away. Economists say that’s a tough undertaking, and that the price of failure would be steep. But desperate measures are called for in desperate times. All we can do is hope for a favorable outcome.
Always give thanks for our Chico, which is in fairly good shape in comparison to the turmoil elsewhere. We are fortunate to be living in this blessed community. Clearly there is dark pessimism out there, and the risks are decidedly to the downside. But there is a scenario where things could turn out better than anticipated. Everything hinges on confidence, sentiment, business, consumers, and investors. Improvement in those areas could unexpectedly turn things around. It’s altogether possible bank rescues and stimulus spending will show progress by summer’s end. So be it.
