I have to say, I was a little shocked that the bailout plan failed today.
Not that I don’t think some version of it won’t pass in a few days. But there is outrage over this bill. People are pissed that our tax dollars, for generations to come, will be spent bailing out the greedy bastards on Wall Street. Apparently Congress was receiving calls from constituents at a rate of 9-1 disapproving of the bill. Congress failed to pass it, good for you. You listened to the people that are going to re-elect you.
So, let’s play a little game shall we. Let’s imagine that Congress figures out that this bill is crap and lets everything be for a bit. What does that really mean. Well, for one, the market is going to correct itself and there are certain companies that will go out of business. Big companies. REALLY big companies that own mortgages and insurance on mortgages. Does this mean that you’re going to lose your house? If you’re one of the millions that makes their monthly payments, probably not. If you do not meet your payments, are you surprised if you lose your house? You shouldn’t be. But, this also means that people will not be buying a lot of houses and the abundant supply of houses on the market are going to stay on the market for a long time. So I wouldn’t plan on moving anytime soon. I know that I’m not moving for at least 2 years, maybe more if this market keeps up.
So what happens if your mortgage company fails. Free house? No, that’s not going to happen. Someone will buy up the loans and you’ll start paying them instead.
What this really means is that people are going to have to be more financially responsible. It will be harder to get a loan for a small business, house or car. You’ll have to make sure that you have a good credit history. You remember that, the thing that people have been saying for years is something that you need to have.
In the coming months/years, the market will consolidate, re-group and start kicking ass again. It will be tough, jobs will be lost. The companies that do not have the strong financial backings will go out of business. These are companies that have been running in the red for years. Going out of business shouldn’t be that big of a surprise for them or you if you work for one of them.
Unfortunately, Congress will not let the correction happen. They’re going to step in and possibly make this a worse situation. They’re already busy regrouping and will probably be voting on another financial bailout on Wednesday or Thursday. Don’t worry folks, Congress will be sure to make this bill just as bad as the first.