Captain - When are we going to LAND??
Posted September 23, 2008
I feel like I’m sitting at 37000 feet waiting to land and the Captain has just announced that we’ll be circling for another three hours. Talk about feeling like you’re in a holding pattern. That’s where we are right now in housing and economic terms. Have you noticed that we haven’t heard about inflation or a recession at all in the past couple of weeks? While The Federal Reserve and Treasury have excellent intentions, I’m not certain that the proposed plan on the table to buy all illiquid assets on the balance sheets of lenders is what we need right now.
We have two major issues facing us – the imbalance of supply/demand (we have too much supply and not enough demand) and the lack of consumer confidence – housing is certainly not suffering from an interest rate hangover. Rates are very good currently... But if people aren’t certain about their jobs or futures, then they’re definitely not making large financial decisions right now.
So what is the answer? Will Washington deliver the necessary solution? Either short or long term? The debate over what is fair to taxpayers could be had for years… and getting bi-partisan support for this $700 Billion infusion isn’t moving as quickly as Paulson/Bernanke would like… but what did they really expect?
The goal seems to be by the end of the week for some solution to be introduced to the public… to me it’s a confidence play both to Wall Street and Main Street – but instead of confidence we could see more anger and resentment than anything else.
Stay tuned for a VERY interesting in-flight movie script!
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.