Colli Real Estate

"We have to pay to get out."

The recent opening of many economists in their view. And here are some of them:

Komileva Economists say that the answer is to expand the role of government in the economy, but also provide incentives for private lenders to start making loans again. One way, he says, is that governments provide guarantees to lenders of loans by the levels in order to cover what she calls "undue risk" borrowers default. A plan of this nature could encourage lenders to lend despite the enormous uncertainty that currently affects nearly all economic sectors. "The key is to make structures Labour Market and restart again in private capital flows, "said Komileva.

Gary Townsend, an analyst at Bank Hill Townsend Capital in Chevy Chase, Maryland, advocates of the suspension of accounting standards on market access that it considers responsible for many depreciation, which have eroded the bank capital. Because of these rules, banks must report what the fair value of their investment if they were sell now – and the value of many of these investments, particularly asset-backed securities fell following the credit crunch.

While the latest fall in stock prices reinforces the fact that banks need capital, Townsend does not think such a procedure has revealed that the government Bank of America becomes banal. He said that banks that have failed or need assistance fall into three categories: savings institutions aggressive conditions such as Washington Mutual, the banks that made acquisitions such as Bank of America also, and investment banks to leverage too high Lehman Brothers. "The government must take care not to be the only source of capital," said Townsend.

Most of the money time has actually gone to recapitalize the banks – namely, the banks make money, and the government gets preferred shares in banks. The idea is that this will encourage lending. But so far, it seems that the banks hold over much of the money. Much what is happening now is really a question of trust: Why pay when you see the economy is heading for a recession deeper and loans Mortgages are still flying? Besides pumping money into the financial system, Obama to make some strengthening confidence Premier FDR-style. Economy will probably lose at least 2 million jobs in 2008. Approximately one million people disappeared during the last three months of the year. The unemployment rate is higher 7%, and some analysts expect it will reach 9%. The layoffs have begun in the housing and finance, but rapid expansion. "It is in industries and occupations and in almost all corners of the country. Therefore it is more frightening than past recessions, because if you lose your job, there is no obvious place to go.

Obama wants to run another 100 billion dollars to keep governments state have to cut programs like Medicaid essential, or raise taxes. It is also likely to extend unemployment benefits and distribute more food stamps. The point of these actions is not only helping the beneficiaries, but to sustain aggregate demand in the economy. Unlike tax cuts, which can be saved by people with higher incomes, the benefits for low and middle income fairly quickly translate by consumer spending. This seems to tax cuts for families earning under $ 250,000 are still on the agenda.

People familiar with the thinking of the Obama team said it was considering setting up a bank run by the government, or perhaps the banks to buy toxic assets clogging the financial system and block new loans.

Imagine all Obama plans to revive the economy really work. There remains the question of the bill. The plan Paulson 700 billion dollars, although some who may return. Obama's proposed stimulus package will probably be another 850 billion U.S. dollars. (For perspective: All costs Department of Defense $ 700 million per year.) And it comes after years of deficit. Can we really afford to give all this? Few economists believe that is time that America suddenly religion on the deficit.

"Undoubtedly, we must be concerned about the deficit, huge impact on the long term, "said Rogoff of Harvard." But now we face a crisis once a century, and we to pay to get out. "

About the Author

Katherine Marfal works for Kevin Levonas and contributes and edits content on Kevin’s loan modification website. Kevin Levonas is a consumer advocate and real estate professional. He publishes a loan modification resources website where a team experts contribute articles, a case law library, develop tools and other resources to help home owners stop foreclosure.

Redlining: the Justice Department cases. (lawsuit against Chevy Chase Federal Savings Bank F.S.B.)(Cover Report: Fair Lending): An article from: Mortgage Banking $5.95 This digital document is an article from Mortgage Banking, published by Mortgage Bankers Association of America on September 1, 1995. The length of the article is 6519 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Cita…

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