Well – that happened a bit faster than I had anticipated, but nonetheless a very bold and positive statement made by Treasury Secretary Hank Paulson suggests that the blinker is on and it is clearly signaling a “right turn” at the “T in the road” – great news!
I would encourage my readers to take the time to listen to his speech that was broadcasted live this morning around 10:15 AM EST. To sum it up for you all – here is my brief analogy of what was said this morning:
Think of the current financial systems as if you have a clogged drain in the kitchen sink (the clog is mortgage assets that have zero liquidity on the banks’ balance sheet – and the sink itself is the bank). This clogged pipe is making it extremely difficult for banks to extend all types of lending – including mortgage options or the support of our industry. Now, the Fed is a Roto-Rooter (plumber) on their way to unclog the pipe!
When the clog is released, water (money) will flow rapidly and we will start to see the financial system regain stability and normalize faster than you may think. Once that occurs – we have “made the right turn” and the expansion of our country’s economy will be headed in the right direction.
Yes; this will cost the tax payers money – without question. However, it is extraordinarily necessary that without it the great citizens of the United States would have far greater worries to contemplate if the clog was not released.
I am confident that I will have the opportunity to heavily debate this with my readers and colleagues in the near future, but I for one believe that we are making the “right turn”
