Busted Dollar

This whole week has been confusing and maddening. I'm not sure I will ever understand why the government is bailing out businesses that are about to go bankrupt. How do they decide to bail out AIG and not Lehman Brothers? How could government tied businesses Fannie Mae and Freddie Mac suddenly need help.

I suspect these did not happen over night. I am not convinced we need more government, more watchdog regulators, more policing to keep things in the black. When has the government run anything more efficiently and cheaper? Never.

Economic entanglements are beyond the comprehension of my simple "regular joe" experience. I think this is true of millions of hard working people.

Over $170 billion have been withdrawn from money market accounts this week. People are worried about their safe nest eggs. Money markets are not covered by the government FDIC. One money market fund (I can not remember the name) had their dollar busted.

Shares of money market funds are $1 par. A share is valued at $1. Earnings paid in shares are all at $1/share except when the dollar is busted. This fund reported their money market funds valued at $.97 a share.

These worries have the potential for panic like the run on the banks back in the late 1920s and early 1930s. So maybe it is vital that the government bail out the financial institutions.

I am bothered by the lack of transparency. Who knows what's been really going on? President Bush called for an investigation into F. Mae and F. Mac back in 2003 but it never happened. Evidently the underlying problems have been festering for years.

Greed and power. The government demanded that more mortgage $ be available to the low income families. In fact one place said what was once 5% of mortgages was changed to 20%. This was dictated by the Dems in the 1990s and reinforced during George W.'s first term.

This triggered home financing with little or no down payments and little or no credit history or even income records. Some mortgages were obtain without tax records or even a W2.

Subprime. Zero down. Interest only. Taking equity out and refinancing. All terms used more commonly in the last 15 years. Mortgage rates were low. Housing saw huge increases. More banks and lenders wanted a piece of the pie. Creative financing.

Maybe it was all doomed. A house of mortgage papers only. No real equity. No real value.

Then the cracks began. The banks did not want to foreclose and take back ownership of houses that were worth less than the loan balances. People who were "given" a piece of the American dream were shocked and outraged that it was taken away.

Who won in all this? The greedy top men. CEO's salaries and politician's purses. Greed. One of the loud voices crying for subprime mortgages for the underprivileged was Acorn. One of Acorn's community organizers, B.H. Obama, was pushing and pushing for "fairness" and he reaped the benefit of political contributions as well as mortgages for the poor.

The poor lost. The American regular joes are picking up the pieces and are counted as losers. Generations after us will be paying the price. Most of us who will pay for this house of cards had to have 20% down to buy our homes and tax returns for the last few years and proof of insurance and a credit rating that was more than healthy.

In the end, we did not help the poor. In fact, there will be less and less aid $ and charity $ because regular joes will be paying higher taxes, paying for social security they will never enjoy, and living under the socialist President B. Husein Obama. Democracy will give way to socialism.

'til later