No End to Recession without a Solution to Housing Crisis

Mortgage & Housing Crisis

New Orleans    I’m going to keep this short and sweet, and the message will be clear.  The economy in the USA is showing some signs of improvement.  More jobs are coming into the statistics.  The President is getting a bounce in his step.  This is all good news.

Obama will have trouble winning without these trends continuing to improve.  And, that is nowhere near as important as the fact that working families are still in terrible shape throughout the country!

I don’t believe that we can get out of the recession or that Obama can salvage this mess without finally booting Treasury Secretary Geithner and bending Wall Street and the banks to the rack and at last getting them to right size the mortgages to the appropriate water level since millions now owe more than their houses are worth.  Doing so will allow there to finally be a real loan modification program rather than all of the promises and fakery – run by the banks! – that we have seen for the last three years plus.

Standing next to a fellow from my high school class that I hadn’t seen for decades the other night, he mentioned he ran a fairly good sized bunch of mutual funds out of Omaha, Nebraska.  I kidded him about Warren Buffet.  He said the dude was amazing.  We talked about the fact that his daughter was working for Buffet’s daughter and actually helping her get something right about the philanthropy she was doing, and we even both agreed that it was too bad that Buffet had moved his money over to Gates rather than putting his own stamp on the funds, since he would have spent them better.  I asked what his reading on the economy was, and he quietly shook his head and said, “housing, it can’t get settled until housing gets settled.”  I said I couldn’t agree more.

Later I looked him up on Google to see what the story was on the funds he managed.  It turned out that my friend and classmate Wally Weitz manages $4 billion worth in these funds and has for almost 30 years.   One link claimed Fortune magazine called Wally, “the other Sage of Omaha.”

Damn!  I knew I was right, now I think it’s unanimous, if folks are seeing this from the top, the same way it feels at the bottom, then somehow the White House needs to finally get the message and get it done.

 

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