Wednesday, September 24, 2008

A week of confusion.

So, apparently this whole $700 Billion problem started last Thursday, and while its certainly not resolved yet, at least today on C-SPAN they clarified what exactly this whole mess is about, and then tonight the president gave a brief clarification in a format that people might actually watch. As one of the representatives explained it to Paulson "There are a small group of people inside the beltway and on Wall Street who understand what is going on. When you throw a $700,000,000,000 figure out to the general public without explaining yourself, thats when you get 85% opposition." I'm paraphrasing of course, but that was the gist of it and I thought "Yes, finally they'll clarify this nonsense!" And they did, sort of. I had to watch and read some more stuff, but it seems like (In case you don't know) all those nasty foreclosures and bad loans and other real estate garbage we've been dealing with for the past year finally reached a breaking point with companies like AIG and Lehman Brothers and Fannie Mae, etc. being the "First Dominoes" if you will. Its like one of those cool displays where 1 tips 2, which tips 3, and soon you've got this giant cool looking V in the middle of your lair. From my understanding, the government wants to buy a good chunk of the foreclosures and such (Thus giving these dying companies that glutted on real estate some money) and then sell them back later for more money. In theory it seems like a good idea, but there's no guarentee it will work, and if this fails we really will be screwed. If we don't do it, tthen it seems like a whole bunch of companies and banks will go under which will also hurt a lot of people.

So the way I see it, and I could be wrong as I'm no expert, is that we're definitely going to have problems if we don't do it, we'll definitely still have relatively lesser problems even if we do (Thats the great thing, it won't really fix the problem, oi) but there's a possibility that the money and strings attatched oversight of that money won't fix the problem. Or we could use a quicksand analogy: We could stay in the quicksand and hope we touch bottom, or we could grab this thing that looks like a vine, but might be a snake and either way we'd have to move around in the quicksand which is going to sink us faster before we can even try to grab it.

To modify a familiar phrase: "Damned if we do maybe damned if we don't."

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