President Obama, Secretary Geithner, Chairman Bernanke – Here’s Is Your Plan to Recovery
If you agree the housing crisis preceded the financial crisis and you believe in a free capitalist economy and in the bankruptcy laws for corporations when they become insolvent then read on.
#1 Stop the free fall of mortgage defaults. Refinance the principal balance on existing mortgatges for all. High loan obligations due to high principal balance means cash strapped owners have higher risk of defaulting. Refinancing interest rates alone won’t solve the problem long term. Higher defaults leads to higher foreclosures. More foreclosures means falling home prices. Listen to what Jim Cramer of “Mad Money” has to say as he talks with Chris Matthews on MSNBC “Hardball”:
#2 Break the bad banks up. These banks and other financial institutions holding toxic mortgage backed securities who don’t pass the “stress test” are essentially insolvent without taxpayers money. These companies need to be broken up and restructured much like bankruptcy. This is the only way for everyone, including private investors to see and trust what is the good assets vs. the bad ones. Let’s listen to what Professor Peter Morici of University of Maryland has to say on MSNBC “Hardball” with Chris Mathews:
#3 So who and what’s in the way of President Obama’s administration and Congress from solving the problem with what has been suggested and the obvious course of action? Let’s listen to both Jim Cramer and Peter Morici:
