NorCalUrban

Yesterday I listened to an excellent episode of the PBS show 'This American Life". In layman's terms they described the current major concerns (mortgage meltdown, commercial paper, credit default swaps) and discussed the pros and cons of the bailout. This was VERY helpful to me as I've been trying to understand the current pickle we're in. I encourage you to listen. You can find it here or on itunes. The episode is called "Another Frightening Show About the Economy". They also recommend the "Planet Money" podcast which gives a day to day recap on what's happening. You can find it here or also on itunes.

Today President Bush signed the emergency housing bill to law. This bill provides for the support of mortgage giants Fannie Mae and Freddie Mac, which insures about half of the nation's mortgages. It also comes in the week where we have just passed a record deficit budget. I cannot but help but wonder if we are in for further hard times. As usual the poor will suffer greatly.  The New York Times reports: The law authorizes the Federal Housing Administration to insure up to the $300 billion in such loans but the Congressional Budget Office has estimated that only $68 billion of that authority is likely to be used. The original lenders will have to pay upfront fees into an insurance fund, and borrowers will pay on-going insurance premiums of 1.5 percent a year to insulate taxpayers against losses from defaults. The budget office has estimated that 35 percent of the refinanced loans will end up in trouble again. Did I read that right? Has the congressional budget office really predict...