Credit Crisis, Mortgage Meltdown, Economy Short Circuit: ACTION NOW PLEASE!

It is as though everyone has their head stuck in the ground, which is the most polite way of putting it.

Look at the figures coming out — even PRIME borrowers are going delinquent. Lenders are struggling to regain capital requirements for lending, The Federal Reserve is essentially having no effect on the downslide, retail spending is at a forty (40) year low, and the U.S. dollar has never been worth less than it is now. Housing prices are trending lower for at least another 15% drop and inflation is on the way up each month. Real unemployment and underemployment is at an all time high, and regardless of employment status at least 2/3 of the country’s citizens can’t make it on their current standard of living. All of these indicators are still trending down in a reverse hockey stick if you want to graph it.

My point is not just that the sky is falling, my point is that this crisis must be treated as seriously as it presents itself.

Extreme measures must be put in place NOW to mitigate or prevent tens of millions of American citizens from being displaced from their homes, jobs, and way of life.

The entire foreclosure scheme must be frozen. All debt must be restructured to a level that borrowers can pay with money left over to buy consumer goods. That includes subprime, prime and all other debt. Failing loans must be restored to a status that provides relief to financial insitutions seeking to comply with capital requirements for lending. The holders of CDOs must be given some of the relief to restore some measure of confidence in the U.S. financial markets, and the players who sold these securities should be given immunity if necessary in exhange for their complete cooperation in achieving these objectives.

This issue is not “who gets the bailout”, the issue is how do we get all the players back in equilibrium. The issue is NOT who is to blame. The issue is who is needed to fix the situation. The answer is everyone.  

Fundamentally there are a number of obvious regulatory, monetary, legislative and enforcement issues that need to be visited and corrected. But let’s get serious. These corrections will fix nothing in the current crisis. The “stimulus package” represents a tiny fraction of a tiny percent of the crisis we are in. We need bold actions now not by candidates who will hold public office in the future but by those with the power and authority to do it. We need leadership by people of courage who are willing to take risks to stem the incoming tide of inflation, foreclosures, bankruptcies, delinquencies, bank failures, business failures and the further decline of the U.S. dollar.

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