Now, what does this all mean? The essential question that we need to ask ourselves, and our economists, is have we seen the worst of this mess? Are we at a turning point as far as the recession is concerned? Well, in my opinion yes and no. I think we have seen the worst of things, regarding financial markets and the economic downturn. Do I think we are recession free? No. We have to be very careful of the road ahead, we could eventually see a stagnant economy leading to elevated risk of inflation. However, I do believe that investor confidence is being restored, and as long as we are able to clean up the bank balance sheets, then we should be in good shape. That is the main purpose of this TARP initiative produced by the U.S. Treasury. It will offer incentives for private investors to purchase up to $1 trillion in bank's troubled assets. This is extremely essential for economic growth for a couple of reasons. Once the banks are able to clean up their balance sheets, and rid themselves of these toxic assets (which they are having trouble pricing), then credit lines should free up. With the banks possessing stronger balance sheets, they will be able to loan more through credit as opposed to trying to remain as liquid as possible. The other thing that will certainly help is the purchasing of foreclosed properties. The worst thing for a bank's balance sheet, besides the so called toxic asset, is a foreclosed home. They are desperate to get them off their hand, and so I believe with a little government incentive (i.e. a $15,000 tax credit), a very low mortgage rate of around 4%, and an excellent bargain, foreclosed properties should start selling soon.
Lets jump to the political arena for a bit. President Obama has been under heavy criticism as of late regarding his demeanor and overall attitude in the past few weeks. You know, I often hear two views, either Obama is too gloom and negative or he is overly joyous and smiling too much. I think that is a bit ridiculous. But I will tell you what I have a problem with. I have a problem with our President showing up on the tonight show with Jay Leno, and then proceeding to imply his bowling score of 129 is "special olympics worthy". You know what's ironic about this? The there is a group trying to eliminate the word "retard" by the end of March, and here you have the President of the United States suggesting his bowling capabilities are comparable to that of a special needs participant in the special olympics. To me, his smiles and jokes are a sign of arrogance. Here we are in the most serious fiscal calamity since the Great Depression, and Mr. Obama is touring Los Angeles and appearing on late night talk shows? Mr. Obama, you are a government employee, you recieve your pay and mandate from the masses, and in-turn you should be spending every single minute of your working day trying to solve this country's economic problems. Not shooting the you know what with Jay Leno.
The real issue for me is I just don't trust the guy. I'm sorry, I just do not believe a word coming out of his mouth. And although I am willing to give him a shot before I judge him and his policies, I refuse to refrain from being critical of policies and things I do not agree with. Every time I see him on TV or listen to him speak it is a flashback to mid 2008 during the campaign trail. And I don't think I'm the only one, one poll has 14% of independents changing their opinion regarding agreeing with Barack Obama's policies. Well, unfortunately time will tell whether he is the right guy for the job. For now, its a reality we must face. I still wish he would debate Bill O'Reily or Sean Hannity, it would be amazing.
0 comments:
Post a Comment