White House, Congress, Fed Are Scrambling To Deal With Mortgage Crisis

[Purveyor]

WASHINGTON - After a slow and stumbling start, official Washington is scrambling to try to prevent the unfolding mortgage crisis from pushing the country into recession during an election year. There is a strong feeling, though, that the government will need to do more to avert a financial disaster.

One former treasury secretary advocates temporary tax cuts and emergency spending on the order of $50 billion to $75 billion. Such action could help the U.S. from slipping into what Lawrence Summers, who served under president Bill Clinton, fears could become the worst downturn since the steep 1981-82 recession.

Some Republicans are worried, too.

From both Martin Feldstein, who was president Ronald Reagan's top economic adviser, and former Federal Reserve chairman Alan Greenspan have come calls for deeper government intervention to deal with the threat.

Before it is all over, the government may have to resort to measures last used in the savings-and-loan crisis of the 1990s. Back then, it was a new agency to take over failing thrifts sunk by bad loans. Today, it could mean a government agency to buy up billions of dollars of mortgage-backed securities that investors are shunning.

---EOE---

http://canadianpress.google.com/article/ALeqM5hWT7f4Ay8otp_5aSkfuOBEmRvCSQ

[Xipe Totec]

1. Suddenly Chimpie is looking a lot like Regan... nt

[dantyrant]

7. This is far worse than the S&L crisis was...

We're not even close to being through this banking panic either... Hold on tight after new years.

[Bonhomme Richard]

2. All I am sure of is that we, the taxpayers, are going to .....

carry the burden in order to bail out the bankers/financial interest.
Guaranteed the average guy on the ropes is going to be on his own.

[dysfunctional press]

3. one OBVIOUS action that NEEDS to be taken- RE-REGULATION.

funny how NONE of the congressional corporocrats are bringing up the idea though, huh...:shrug:

[Joe Fields]

4. I'm adamantly opposed to taxpayer funded bailouts of any kind,

for any of the parties in this crisis. Greed and shortsightedness on both sides caused this mess, and the taxpayers should not be the ones held responsible for it.

[helderheid]

5. Scrambling to cover their asses is more like it.

[whistle]

6. How about the Fed infusing $44 trillion in new money and dropping interest rates to zero

...uhmmm, even that won't help a monetary system which is totally bankrupt! No amount of money will save what has been created by the speculators and hedge fund gamblers, but the economy can be saved by freezing foreclosures, keeping the millions of Americans at risk now in their homes, congress taking back control of the money system, dropping this free trade globalization nonsense and implementing an FDR style New Deal program to put millions of Americans back into real jobs along with a Breton Woods style fixed exchange rate money system and meaningful fair trade agreements with countries like Russia, India and China.

[soothsayer]

9. Yeah, where do those trillions come from? we're printing it faster than bernie can

chuck it out of helicopters

[soothsayer]

8. If 96% of mortgages are paid on time, how can the 4% bring down the whole shebang?

[whistle]

10. I think something like 20% of the mortgages had special payment situations

...like balloon pay-offs or accelerated payments and escalating interest rates, etc. which are forcing defaults and thus an excuse for banks to take foreclosure actions.