Politics, Banking & Mortgages….What is Going On?

   Most people do not realize that the mortgage industry and politics are closely connected.  The Fed’s Treasury Secretary, Timothy Giethner, use of the words “War of Necessity” while speaking about companies that are “to big to fail.” So what does this mean and how does it affect you.  Let’s put this into prospective here, the Fed’s helped the big four to become even bigger than the “to big to fail” banks that they purchased.     

  BofA Logo  Purchased Country Wide, Merrill Lynch, MBNA & Fleet

 Chase logo Purchased WAMU, Bear Stearns & Bank One

  Citibank logoPurchased Golden State, ABN AMRO, Travelers & 

                                        First National  

 Wells Fargo logo Purchased Wachovia, World Savings & First Security

  All of these banking take over’s were forced sales by the FDIC and the Federal Government brokered deals, imagine that.  This is unbelievable as the big get bigger.  So I have to ask the question, are they now, “to big to survive?”  If the bank’s in trouble were allowed to have failed, then the smaller banks would have come into play.  The bailout money locked out the medium size banks as they had to and continue to have to make a profit to survive.     

  Giethner went on to say that there is a plan in the works that could even eliminate shareholder’s in the big four.  With that being said why on earth would anyone want stock in these banks?  I would highly recommend that anyone holding stock in any of the big four get out now while you have some value. 

  The current administration is clearly following its plan to change the United States to a socialist country.  Given the current state of the economy all of us are hurting and most are clearly grasping at hope without thinking it through.  Us as people do have some fundamental flaws as when faced with death, or lack of money, most of us would do anything to survive.  Even if it is the most unreasonable or unrealistic of chances most of us will take that chance when faced with no alternatives.  We do not like to admit this but this is what serial kills use so affectively against their victims.  We all remember the movie Silence of the Lambs.  The killer in the movie was horrible & amazing in his philosophical ability to control his victims.  The philosophical approach is much the same as what is happening with our country and the current state of the economy is what is held to our necks.

  The younger generations did not have to work through the Jimmy Carter years and I was only in Jr. High School myself at this time, but I do remember the lack of Christmas presents or any activities that cost money.  Even when work returned to normal for my parents I do recall interest rates in the 18% range for a home mortgage.  This was done to hold off inflation by the Federal Reserve Committee.  Given the current environment we could be looking at 25% rates for home mortgages in the near future.  I know that sounds absurd but think about it.  Historically inflation usually lags 24 to 30 months behind low Fed Prime Rates.  Today’s rates are historically low and will not last much longer.  Take advantage of the current rates now if you are fence as I would hate to see anyone lose out.

  The Free Market system rewards people who work hard and hurts people who take too big of risks.  Think about all of the companies that failed only to have new less expensive companies open up in their absence.  Companies like Builders Emporium, Price Club, Pace, White Front, TG&Y, Treasury, Gemco failed and new companies like Wal-Mart, Home Depot, Lowes, Costco, ect were born.  Free market means competitive pricing for us all.  Don’t we all want the best value for our money?  We continue to watch our banking options be reduced and no one in the Media is even discussing this.  Why and why the double standard?   

Stay Tuned…

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