The Banking Crisis

Just about everyone has made reference as of late to the financial crisis, so I'm going to put in my two cents. 

Initially, as with everything, people wanted to blame Bush and lenient regulations that were promoted by his administration and party.  Then people started to get it right and blamed the money managers and CEOs of AIG, Lehman's, Freddie and Fannie for overextending themselves into risk averse loan situations without consideration of the ramifications. Then people went back to blaming Washington, which is a generic cop out strategy, to not put the blame exactly where it lies. Many factors were involved. Yes, it involves many greedy bankers, yes it involves the FED, and yes, it could have been prevented. However, I am horrified by the solution.

The US first bails out Freddie and Fannie, then it lets Lehman Brother's go bankrupt. The next day they bail out AIG, and now they have devised a plan to loan 700 billion dollars to ad liquidity and save the entire financial industry in America and the world. What that amounts to is a free ride for these companies. It's like saying, "Well I know you were irresponsible for more than a decade and a half, causing millions of people to lose their money, but we'll bail you out anyway and you can live happily off your 7-8 figure pension or severance." But, this bail out is not just helping American companies. Paulson has included foreign companies who have a lot at stake here as well, because as he correctly claims "It is a global problem." However, that being said, it should be a global solution, not the American taxpayers bailing all these companies out. We are marching towards socialism. We will soon have a completely state run financial system. And, the best part about it is no one consulted the American people. I suppose they didn't have to, but it sure ads insult to injury. 

Who really should get the help from this crisis are all the people who put money into this failed system, not the system. The lenders screwed up royally and can't pay back their debts, so why should we the people who lost our money to them, bail them out? I know some will argue, "desperate times call for desperate measures," but I would have stopped at Freddie and Fannie. 

Oh, and on another note, the former CEO of Fannie works for Obama, gave a load of money and picked his VP.

The New Housing Market

In recent months the housing slump has brought bankers, investors, speculators, and homeowners to their knees. This aura of invincibility that used to reign has faded into confusion and insecurity. Houses, just like any other commodity can lose value. Shocking. However, there is a glimmer of hope. The housing market is showing its resilience.

The latest option for people to pursue these days is one that we all should have been made familiar with as young children: The cardboard box house. Don't throw away that old refrigerator box! That's prime real estate. At a low initial cost to the owner, all it takes is a little permanent marker and a flower pot or two to make it's value soar. Cardboard box houses are also good for the environment, being reusable and mobile. They do suffer from being less than effective in rainstorms, but there will always be new cardboard boxes to buy, gut out, renovate, and resell. The possibilities are endless!