Thursday, February 26, 2009

Been there, done that

Remain calm, all is well.

Now, I really don't think all is well, but here's my point...we've been here before economically. During the 80's, I had a CD that paid 15%. I also had a loan that I paid 17% on. I'm not talking about a credit card...I'm talking about a bank loan.

We have been through real estate crises before...if you lived in Texas in the 80's, you've seen much worse than what we're seeing now. My roommate from college moved into a house in Houston in 1982, paying $140,000 for that house. 5 years later, his house was worth about $80,000. He lives in that house today, and the value is back over what he paid for it...much higher, even with the recent downturn.

My point is...there is no reason to panic. Concern - yes...panic - no. We should recreate the Resolution Trust Corp (RTC) and put the bad loans in the RTC. I don't like it...but it's better than the billions that Obama wants to throw at it...and the cram-downs he wants to do. At least in an RTC-like entity, the government could hold those homes and make some money on them when the economy turns around.

Let's stop all this caterwauling and just calm down. We'll get through this recession. Sure, some folks will lose their homes to foreclosure...that's what happens when you don't pay your mortgage. They'll move into apartments or rent houses. But we'll get through it.

The administration is scaring the shit out of people in order to push through all of the left's pet projects. Let's take a deep breath, let it half out, take steady aim, and shoot this plan out of the water.

Did you notice that the guy in the video is Kevin Bacon?

1 comment:

Sabra said...

Been a long time since I've seen Animal House!

Remain calm. What is the market down today? I am calm. DH? Not so much.