President Bush addressed the media Friday morning and had these comments regarding everything that is happening in the economy and the stock market.

Here are a few excerpts (note: not exact wording):

I understand that people are worried about losing their homes. That is why we set up programs to help “credit worthy” people.

Mr. President, although we Americans greatly appreciate the efforts behind your programs to fix what was allowed to occur under your watch, most of these worried homeowners have no credit and not credit worthy. Thus, this really isn’t a solution. However, it does make for a good sound bite.

Home prices are beginning to fall.

Mr. President, that actually started in July of 2005 when the real estate market topped. We will call that a little slip on the dates.

…..Job growth slowed a bit in December.

Mr. President, it appears that 18,000 jobs created was more than “slowing a bit.” If you removed all of the jobs that the Government created out of thin air, we would be in an employment contraction.

We have had 52 months of job growth.

Mr. President, congratulations on that record. However, that doesn’t pay the bills for those who are in trouble today.

And my favorite…
We are going to see what Washington can do to fix this problem.

Mr. President, the idea of you cutting taxes to fix the problem was as crazy as the band-aid that you put on this country in 2001 with your tax cut programs. We couldn’t afford it then and we cannot afford it today.

Someone please tell me that he really does understand and this is nothing more than the SPIN machine. Politicians must think that Americans are dumb. I know my intelligence has been insulted.

Copyright © 2008 Prudent Money and Bob Brooks. All rights reserved.

Tags: Americans, Bob Brooks, President Bush, Prudent Money, real estate market, Stock Market, Washington

Who am I to criticize? I have no idea as to how I would handle this mortgage/credit/real estate mess. Being in a leadership position is a tough one today.

Let’s look at who is really responsible for this mess. Well, you could blame Greenspan. You could even start to fault Bernanke and Paulson to a degree with their extremely risky solutions to handling the current problem. You could blame the mortgage industry.

Ironically, the one person who should be taking responsibility is never mentioned in the blame game. Let me say that I respect President Bush and think that he not only inherited a tough situation, but has also had one of the toughest situations to preside over in decades. At the same time, he is the leader of this country and he sat back just like Congress and ignored it. He also allowed Greenspan to irresponsibly ignite the process through his policy decisions.

Now the Bush administration is practicing moral hazard by setting up a program that will freeze adjustable rate mortgages. Apparently, neither he nor his advisors have a clue as to the domino effect that this type of program will create.

I realize that they have to do something. However, this is not the answer. The answer is to let the irresponsibility work its way through the system. The answer to every problem that the Bush administration has faced has been to put a band-aid on the problem. Band-aid solutions just allow the problem to fester and become an even larger problem later.

I wish that President Bush would look at the reality of the situation. We need to stop tampering with the markets and let them adjust accordingly. We need to set up strict regulation so that the credit industry cannot continue to rip-off the consumer base. Most importantly, someone needs to put politics aside and lead this country.

All contents copyright © 2007 Prudent Money and Bob Brooks. All rights reserved.

Tags: Bernanke, Bob Brooks, Congress, credit crisis, Greenspan, mortgage crisis, Mortgage Industry, Paulson, politics, President Bush, Prudent Money, real estate crisis

I was very interested to hear what President Bush was going to say this morning concerning the mortgage crisis we are facing in America. I figured it would be more of a political answer than a real solution.

He actually identified the real problem being the adjustable rate mortgage. He also made a point of saying that it was not the government’s job to bail out speculators. (read: we are not going to bail-out the homeowners who are in trouble)

The Government cannot just step in and bail out the mortgage crisis. It would be rewarding mortgage companies and banks for being irresponsible and greedy.

He made some references to a few changes that really would not help all of the homeowners who are facing this ominous situation in the future. He basically offered up the political smoke and mirrors solution.

He made a big speech acknowledging the problem. Then assured the America people that they were going to implement some changes that will help solve the problem. It is the political smoke and mirrors answer. In politics, you just have to look like you are solving the problem when really you are just crossing your fingers and hoping it will blow over. (read:Irag)

The mortgage crisis in America will have to work itself out over time. This is the bursting of a major debt bubble with the mortgage crisis being the final phase of the bubble. You don’t just take 25 years of debt accumulation and expect that the problem is just going to go away. We will have to go through the “de-tox” process.

Tags: adjustable rate mortgage, America, Bob Brooks, debt bubble, Government, Homeowners, mortgage crisis, political, politics, President Bush, Prudent Money, real estate crisis, speculators