Thursday, September 25, 2008

President Bush addresses the Nation on the economy

I'm going to be honest. I haven't even watched this video yet. So if there's a streaker or something crazy like that going on behind the President I'm not responsible. Leave comments and tell me what he said. I need to go to bed I'll watch it tomorrow. After that I'll probably add my opinions on this post.

The most interesting part of the speech to me was when the President pointed out we will get most if not all on this money back. Basically we're buying all of these mortages cheap. In a couple of years when the economy recovers we may actually be able to sale them for a profit. While 700 billion dollars is the initial investment it is not the final cost. I thought President Bush should've spent more time explaining that in his speech.

The Congress needs to get this bill done fast. Without it there is a good chance that the economy will go into a recession. I'm not one of these doom and gloomers who believe we are headed for a great depression. In a worse case scenrio I see a 1 to 2 year recession followed by an economic upturn. Bad yes. The Great Depression not even close.

1 comment:

  1. Um, in fairness, there's no way to know if we'll make this money back.

    You see, the housing market was over-inflated. That was a large part of the problem. In other words, we're paying the "bubble price" on these mortgages and hoping that the housing market will reach that bubble price again. There is by no means a guarantee that it will do so in the immediate future. We're not getting these mortgages "cheap," we're paying way over the market value for them. That's the whole point. If these banks could sell them at the market value, then we wouldn't have to buy them out, they could do it on their own. We have to buy them out, because these mortgages are worth far less than the banks estimated they would be.

    I'm not sure when overpaying for something was ever considered a good investment, but whatever...