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Small Steps

November 23, 2011 – 6:00 pm

I am not sure why we should care that the super committee failed to get anything done. In fact in many ways it might be good news. It is rare that when two opposite sides of the political spectrum agree, compromising, that anything meaningful results. Any agreement is so watered down that all it does is confuse the issue while each side pats themselves on the back.

The best way to solve our debt crisis is to spur economic growth, but of course a little less spending and a little tax increase certainly wouldn’t hurt. The Fed is doing its part with extra low interest rates and various efforts to keep liquidity high. However, the elected officials are dropping the ball.

We should not expect anything significant from Washington and maybe we don’t need it. The sickest part of our economy is housing. Maybe if they could just focus on that one problem agreement could be reached. Letting homeowners with a record of solid mortgage payments refinance to the lowest rate for those mortgages already backed by government agencies, Freddie and Fannie, would be a good start. Does it really matter if the mortgage is higher than the value of the house when the government already backs the loan? Wouldn’t the loan be more secure if the homeowner is paying less in mortgage payments every month? Wouldn’t all that money they are saving per month be spent in the economy on other things and wouldn’t that help GDP growth and maybe produce some jobs? Or maybe a slight loosening to the draconian qualifying rules would help. If you have tried to refinance or buy a new home lately you know what it is like to get a mortgage. The banks have gone from being overly loose in their standards to overly tight and some of that reason is onerous Government rules and regulations.

We need no super committee just a little focus and agreement out of Washington; instead we get politicians worrying about themselves with the election coming up next year. I say we vote all of them out and start fresh.

Good Trading,
Steve Peasley

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