The Iconoclast Investor

I got some great comments during the weekend about the government’s $700 billion bailout plan and I’m going to share some of them with you here today and some more tomorrow. If you have something to say about the bailout or economic situation, please leave your comments here.

“Everyone seems to blame the government for this mess. Now if I took a mortgage within my limits (which I have) and pay it down aggressively or even moderately, how can I possibly go bankrupt? Is it possible that people were going after the American dream without working for it first? I remember an essay from Emerson about self-reliance–what ever happened to that and personal responsibility? A house is not an entitlement–one has to work for it.

“On the other hand, if people bought homes within their means with a huge safety margin (Graham–yes I read the book) vis-a-vis their incomes, the shorts would be sucking wind. We are blaming bankers for greed, which is innate in us. Amazing. Did any of these people complain when Bear Stearns’ stock went up to $170 on these funny earnings?

“In conclusion, people who complain should ask look within themselves. The answers are all there. Wall street is nothing but a reflection of us.”

R.A.

—

“Something no one seems to have mentioned: Add $170 billion to the final bill for the porkiest of pork projects. Saw a list of these on Glenn Beck, prior to the final vote. It suddenly passed, easily.”

G.S.

—

“There is no doubt that the mortgage crisis and escalating price of oil are responsible for the mess we are in. I remember the oil spike in 1973 because I drove my family from Boston to Disney World and had to stop every few miles on the return trip to buy gas, which at most stations was limited to $5.00. At that time, recommendations were made by many people, the average American, politicians and scientists alike, to develop alternate sources of energy. I fault our government for not doing a thing since then. This inaction has caused and will continue to cause many Americans financial pain. I suggest that we, as Americans, consider removing our Congressman from office at this upcoming election based, if nothing else, on incompetence and stupidity. Is there a way to remove them by other means, e.g. mass impeachment? We need engineers and scientists in Congress, not a bunch of lawyers who can’t seem to know enough to find shelter when it rains.”

M.H.

—

“I don’t understand why so many people were, and still are, opposed to the $700 billion dollar government bailout plan. Many people were thinking that this was a plan that was going to let Wall Street’s fat cats get off the hook easy. However, it is the U.S. real estate market, and many homeowners, that need assistance. The housing market got out of hand, because Alan Greenspan had to lower the fed funds rate all the way down to 1% after 9/11/2001. Many people were in a panic after 9/11. They were afraid to venture outside of their residence for fear that another terrorist attack might occur. The U.S. economy suddenly came to a screeching halt after 9/11. The only way to get the economy going again (back on its feet) was to lower interest rates. This is what led to many people taking out adjustable rate mortgages when they purchased a new home. This was partially the cause of the U.S. housing bubble. The banks, and mortgage companies, were also to blame. They made it too easy for people to buy a new house after 9/11. People were not required to make the traditional 20% down payment when they purchased a new house. Also, all of a sudden, financial institutions didn’t verify the incomes of the people who were buying homes. Just because financial institutions didn’t verify peoples income didn’t mean that a person should just go out there and buy any home his, or her, heart desired. The people who were buying homes in the U.S. should have had enough brains to be able to figure out whether or not they could afford the home. Therefore, many of the people who were buying a house, were as much to blame for the economic predicament that we find ourselves in today. The problem wasn’t just caused by financial institutions and Wall Street fat cats. Therefore, I don’t understand why in the beginning, 95% of the public was opposed to this $700 billion dollar rescue package.”

D.S.

—

“The present crisis has a few causes, and many problems.  Our presidential administration has frantically addressed the problems, and our Congress has even fanned the flames of the problem by granting over a trillion dollars of new debt to address the problems.  Still, no one has addressed the cause. The cause was loose money, low interest, and easy credit. The government has done nothing to change the cause of the continuing crisis.”

J.B.

—

Have something to say about the bailout? Please leave your comments here!