THE SKY IS FALLING!

Well, most of the financial guru's think the ship will right itself, but it's going to have an anchor on it that's twice its size. Doesn't make for a speedy recovery in the financial markets, does it?

I am perplexed about why the housing market has been so devastated. I bought my first house on an FHA loan about 35 years ago. My Dad loaned me the down payment and it was a fix upper in Lakewood, Colorado. (Didn't realize how much a "fix upper" it was until I was in it.) Here's the thing, though, there were stringent guidelines of debt to equity and personal credit reports that had to analyzed and evaluated. It was TOUGH to get a loan!

For the past 45 years, I was a Corporate Credit Manager for a manufacturing company that built steel buildings. Because we set guidelines on who would be given open terms, we had the best asset management of any of our competitors. It's not that difficult! You have to have a policy that will be followed and employees who understand the ramification of not following it.

How, may I ask, did these huge financial institutions allow loans that would not conform to any sensible person's analysis? Why would the secondary mortgage companies, who sell these mortgages to the larger banks, be allowed to give people a loan on adjustable interest rates to those who had no downpayment, a bad credit report and living paycheck to paycheck? And WHY did the larger banks accept them? This is reprehensible! These people should serve jail time! And, if their incentive to do this was encouragement by politicians who wanted to boast greater home ownership, then they need to join them in their cell!

There are numerous factors in this decline and, if you go back farther, you could even point to the excess in California where Realtors/investors bought up houses during a decline in new building and began the roller coaster of never ending, obscene higher prices. Unfortunately, this trend has turned east, but the difference is that there have been builders meeting the demand for new houses at reasonable increases so the after market has been fairly stable - at least in the southeast with the exception being Florida. Their market, as California, has been crashing.

I think this market will eventually right itself, but it may have been more prudent for the government NOT to bail it out. However, being an election year, you know that won't happen. More importantly, I suggest not just new rules and regulations, we need a viable oversight of all financial transactions. I don't want to put a cap on how much a CEO can earn, but I want those CEO's to have some accountability for their company's failures! How wrong is it that some of these birds are walking away with millions in their pocket while their employees hit the street with little or nothing? Come on, does that sound equitable to you?