Posted by admin | Posted in Dog Care Tips | Posted on 05-11-2005
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The American political rescue 'of Economy
The U.S. mortgage crisis ", Which affects $ 150-250 million worth of mortgages, about 1% of the market, the needs, of course, political ransom. Like the populists good, American politicians are creating a crisis where no exist and participate in demagogeury European style. Politicians can not save anything. You can only destroy.
The economy is healthy and there is nowhere near a recession. The media drums endless lies and bad news - end of the world, 2 million people lost their homes and be eating Dog Food, poverty are racing ahead, only the rich benefit etc. is as smart as cult members, including such media, which support globaloney warming. Sorry the end of the world is not around, and neither is a merger of the mortgage.
Some perspective is necessary. Since 1997, when tax rates on capital gains reduced first, until 2006, real estate prices have increased on average across the U.S. almost 80%, or approximately 2.5 times faster than the historical average growth in real estate [about 4% a year.] Clearly, thanks to cheap credit, easy money, relaxed rules credit and lower capital gains on assets flip, the housing market was a bullfight that was too strong for a long time. A correction, or new price was necessary.
The current fix is tending towards a correction of 20% of the prices. That still leaves the average person with a 60% increase. And this fix is heavily concentrated in speculative markets - especially Florida and California. A crisis is not. Speculators and those who bought loans they could not afford those affected.
The political circus that started because of 1.5-2.0 million people or votes are at risk. Not to mention the media's position and the desire to appear compassionate. This is where governments do their worst work. Intervene in situations where no have any responsibility or knowledge or intelligence to offer. They interfere with the position and buy votes.
In a market where a bank or a mortgage broker has lent money to someone who can not pay, they say that interest rates are coming down, are perhaps too high, the bank has few options. They can seize of property if payments are not made, but this is expensive and if the property is closed usually sell at a discount in the market high - over 50% of value is lost. So substantial likelihood that the lenders prefer a second option is to devise a payment plan, based on the borrower's income conditions, help you keep the house - Especially if it is a house occupied by the owner. At the turn of win-win market, and the bank or lender still collect most of the outstanding loans.
But politicians do not see the world so much.
The From the White House, Democrats, Populists assorted dandies are proposing that lenders government force to freeze rates for a period of years and immediately decrease the amount of mortgage payment. Just think about the stupidity of the concept. Government is a mandate to a new asset price contract for the chosen few. Unbelievable.
First, political action to coerce a freezing on rates, break contracts. states adult, mature, respectful of the law is not broken contractual obligations. African and Latin American states do.
Secondly, what is the incentive for people to make their payments on time? Why should not they stop paying now and declare the difficulties?
Third, how will the government implement its plan, the paperwork, and monitoring processes to ensure that everything is right? More workers were hired for this, and how politicians are "uniform" or standard, a concept that apparently these problems deeply, as they have stated that the private market can not resolve the situation, because contracts are not uniform?
Fourth of danger, moral. Now the U.S. investors will see any investment that the government and ultimately redeem domestic and foreign investors see the U.S. contract law optional, not mandatory. Well functioning capital markets need contract law to be respected, not violated by conniving politicians trying to get their ugly faces on CNN that the latest crisis "interview.
Fifth place as the Wall Street Journal reports, "Moreover, evidence suggests that even when troubled borrowers receive a generous adjustment in their mortgage payments, as many of 40% of borrowers still eventually default. The refinancing plan can only delay the moment of truth and lead to greater losses in a bear market. An analysis by financial services consulting firm Graham Fisher calls this "mobile loan gathers no loss" philosophy, and notes its similarity to the strategy that extended the "S & L crisis and the Japanese banking crisis'."
So in other words, rescue the political will not anyway.
Over 95% of U.S. owners their mortgage on time. 95%. So what is the government doing to fit in a market repricing phase, ostensibly to help out perhaps 1% or less of the total market? Should not the beginning of other 99% to demand relief as well?
This made mortgage crisis is just another example of the media and political mendacity. Create crisis. Declare the end of the world is near. Government's position as the Messiah to save our souls. Implement a solution that will fail. Sure that contracts, market prices, and responsibility subordinate to the political whims and cycles.
This terrible episode only reinforces the fact For U.S. is not a free market, the capitalist state.
About the Author
The US mortgage 'crisis' which affects $150-250 Billion worth of mortgages, or about 1 % of the market, needs of course a political rescue. Visit online resource for United Nations and Globaloney s .
The Race - Racing Dog Rescue Project (FL)
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