cheridave
Orange County, CA
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I got part of my answer in todays paper....
THE ASSOCIATED PRESS
The federal government’s $700 billion bailout of the financial industry could help homebuilders and mortgage lenders, but is unlikely to bring fast relief to anybody trying to buy or sell a house anytime soon.
The Treasury Department’s future purchases of sour mortgages and other securities from banks are designed to inject cash into the credit markets and restore confidence among shaken investors and consumers.
But that may only have a slow and gradual impact on home prices, record foreclosures and the 10-plus-month supply of unsold homes.
“What the bailout does is it keeps a bunch of really bad future events from happening,” said Scott Shane, an economics professor at Case Western Reserve University. “It doesn’t make ...what’s going on today much better.”
Many analysts say U.S. home prices – down 20 percent from their peak in July 2006 – still have further to fall, and must hit bottom before demand picks up. The long-awaited bottom in prices could be a year or more away.
“This is a step... to put the grease back into the machinery,” said Gerard Cassidy, an analyst with RBC Capital Markets. “This is not the panacea.”
The nation’s economic picture continues to worsen. The Labor Department said Friday that employers cut payrolls by 159,000 in September, the largest loss in more than five years, while unemployment remained at 6.1 percent. The cuts included 35,000 construction jobs.
Don Hubble, president of Hubble Homes in Meridian, Idaho, called the government rescue “just imperative” because “we have seen loans getting harder and harder to acquire” to pay for construction expenses on new homes.
The 12-year-old builder slashed its workforce by more than half, to around 50, as housing demand slumped.
Jerry Howard, chief executive of the National Association of Home Builders, also praised the plan, but said lawmakers need to do more.
The bailout package “does not address the root problem of housing prices in its totality, and Congress is going to have to look at doing something to help establish a floor in the housing market,” Howard said.
It remains a difficult situation for builders and mortgage lenders alike because credit remains tight.
Though the bailout is attracting most of the attention, another change in the mortgage market announced last week is likely to have a more immediate and direct impact on consumers.
Mortgage finance companies Fannie Mae and Freddie Mac are rolling back fee increases imposed to shore up their finances this year.
Unlike the bailout, which likely will take months to play out, “it’s something that directly impacts mortgage lending right now,” said Guy Cecala, publisher of Inside Mortgage Finance, a trade publication in Bethesda, Md.
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topflite51
In The Desert of Nevada
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Joined: 05/13/2004
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cdc wrote:Since the Federal Gov't bailed out the financial institutions, I wonder when Congress is going to start a thorough investigation? Haven't you heard? They completed their thorough investigation on Friday and went home. 
 David
Just rolling along enjoying life
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Frankjake
the Beaver State
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Damm, I take a 3 week motorcycle ride and the whole world goes down. I checked my WAMU checking account, it still has money in it. My credit cards still work, my house still has it's 4.85% fixed rate mortage and I'm still making the payments. Doesn't seem like this "bailout" is going to have any possitive affect on me or my family. I wonder what the national crisis will be next month, and the month after that.... Government wants to keep the people "afraid".
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lwmuddy
Murrells Inlet, SC
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NOVEL IDEA.
If you don't make enough money to make car or house payments, then they won't sell them to you.
Refinancing a home, you can't really afford in order to purchase a boat or RV, that you can't really afford. Who would have imagined it?
Some peoples standards of living may have to be downwardly adjusted.
It's going to be a fun time. Doesn't it just make you LAUGH?
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8.1 Van
Millstone NJ
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Global stock markets plummeted as concerns about the credit crisis fueled fears about a world-wide recession.
CNBC
FKA PSDExcursion
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Skid Row Joe
On the road in America
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Joined: 04/26/2006
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Now is the time to borrow more before rates go up, or they run out of money, and you can't get credit. Just a real good idea to keep your credit rating up by borrowing more, at a critical time like this. I know of one guy that has everything finaced, I mean everything, so it would be a good time to replace all his old equipment with new ones, at the prevailing rate.
I have a sweet tender nature, however I enjoy sharing my thoughts and opinions. 
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rvf
Old, Broke, all used up, and a
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Joined: 06/18/2004
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This is my take on what is happening...I don't think I'll be proved wrong...
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Hannibal
Gas Station
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We have more currency in the world today than a couple of years ago. Unless it evaporated or was sent to the moon, the money exists somewhere. Where did the money go? That's where it needs to come from to fix it. Not from tax payers. The money never existed and is only an abstract of balances owed??? Then how can we replace money that never existed? Let it correct itself. Those at the top are very resilient and know how to make money. They WILL figure it out. As it is, they've figured out how to manipulate the general public out of over a trillion bucks, this time. I think the money is being systematically pushed to the top. Now they're sweeping in the scraps. Give us crumbs and we'll think we're getting our share... We've been scammed, conned and hoodwinked. Sounds like my kids...
Investors? They're the cause of the housing crisis. Let 'em fall. People buying several homes to flip only created a false demand and price spike so people who actually need a house to "live in" can't afford it. Now the housing market needs to "correct itself". When prices are back in line with 1999-2002 prices, then the housing market will be fluid once again.
They're (the dept of "they") are already talking about the bailout making loans easier to get. Isn't this what got us into the mess we're in to begin with? Easy credit? Living on borrowed money instead of within our means?
Boring as it may be, we live within our means, work for what we have and save for what we want. We shouldn't be expected to bail out those who don't.
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Frankjake
the Beaver State
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Read it and just wonder......
Here is a click to the article
WaMu CEO, 3 Wks Work, $18M
EmailWritten by gblass on Sep-26-08 1:03pm
From: chisblassternardone.blogspot.com
NEW YORK (CNNMoney.com) -- Washington Mutual Chief Executive Alan Fishman could walk away with more than $18 million in salary, bonuses and severance after less than three weeks on the job, according to the terms of his employment agreement.
But will Fishman follow the lead of another troubled financial firm and turn his severance package down?
JPMorgan Chase (JPM, Fortune 500) grabbed up the banking assets of WaMu on Thursday after federal regulators seized the company, making it the largest bank failure in history.
JPMorgan Chase CEO Jamie Dimon said in a conference call with reporters Friday that no decisions have been made about the fates of WaMu senior executives.
Still, the demise of WaMu is likely to be the end of Fishman's brief tenure at the helm.
Fishman was hired on Sept. 7, replacing former long-time CEO Kerry Killinger, who was ousted as a result of the company's many financial woes.
WaMu did not reply to requests for comment about Fishman's severance package. But some details were outlined in his employment agreement, filed with the Securities and Exchange Commission on Sept. 11.
Fishman had a base annual salary of $1 million, which translates to $19,230 per week. So during his three weeks on the job, he would receive a base pay of about $60,000 before taxes.
His target annual bonus was 365% of his salary, or $3.65 million. In the agreement, it was unclear how much of the annual bonus he would be eligible for, if any.
The agreement said that Fishman could be eligible in 2009 for a long-term incentive award, which would be worth at least $8 million. But the agreement also said this is based on the assumption that would serve as CEO for the "full year" of 2009.
Also, if Fishman has to pay taxes because of any severance he receives as a result of the takeover, then the company would cover those taxes. That would potentially give Fishman millions of dollars more.
Fishman also got a multi-million dollar sign-on bonus. But he may have to pay it back, depending on certain conditions outlined in the agreement.
Fishman's sign-on cash bonus was $7.5 million as well as 612,500 shares of WaMu, which are now virtually worthless. Shares of WaMu plunged more than 90% to 16 cents a share on Friday.
The agreement says that Fishman would have to pay back part or all of his bonus if he ends his employment for any reason other than "constructive termination," or if the company terminates his employment with "cause."
If Fishman is terminated without "cause" - which could mean the loss of a job due to a takeover of the firm - or if he resigns because of "constructive termination," than he would receive a lump severance payment of $6.15 million. This figure is 2.5 times his base salary of $1 million plus the maximum bonus of $3.65 million.
The agreement did not specify constructive termination, but it is generally characterized as an employee voluntarily quitting because of intolerable working conditions.
When you add up his salary, the possible bonuses and the lump sum payment, Fishman could walk away with more than $18 million.
But the CEO of another prominent financial firm in a similar situation recently decided to turn down his severance package after the firm essentially collapsed.
Robert Willumstad, former chief executive officer of insurance giant AIG (AIG, Fortune 500), which the government took an approximately 80% stake in after giving it an emergency $85 billion loan, was dismissed last week after only about three months on the job.
Willumstad has reportedly told his successor that he has decided not to accept his $22 million severance package since AIG shareholders and employees had lost so much money as a result of its meltdown.
Matt McCormick, portfolio manager with Bahl & Gaynor Investment Counsel, said he thinks that Fishman will not be rewarded extravagantly given that the bank failed.
"I will give WaMu the benefit of the doubt that they hired this person to make WaMu work, not to get foreclosed," he said.
But McCormick added that the WaMu failure wasn't necessarily Fishman's fault, because "their goose was cooked long ago."
In the future, employment agreements for CEOs might include more details on restricting multi-million dollar bailouts after brief tenures, McCormick said.
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Beddows
Abbotsford, Canada
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Seems like AIG executives went on a luxury junket at taxpayers expense to the tune of 1/2 a million, a week after they were bailed out for 85 billion. Bring back the guillotine.
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