A Look at  The Federal Bailout(s) November 22, 2008 December 13, 2008
AKA:  E mergency  E conomic  S tabilization  A ct of 2008 AKA:  TARP, or  Troubled (“Toxic”) Asset Relief Program
AKA:  E mergency  E conomic  S tabilization  A ct of 2008 AKA:  TARP, or  Troubled (“Toxic”) Asset Relief Program And make...
Overview <ul><li>International,   National  and some  Local  History and Fallout;  </li></ul><ul><li>Implications; </li></...
The Current Economic Situation <ul><li>Unemployment </li></ul><ul><li>Stock, Commodities, Bond Values </li></ul><ul><li>Ho...
The Current Economic Situation Unemployment Sept.  Oct.  Nov. Stock Market Friday Closes 1,523.57 741 6.32% +47.59 800.03 ...
The Current Economic Situation Unemployment Sept.  Oct.  Nov. Stock Market Friday Closes 1,523.57 741 6.32% +47.59 800.03 ...
Fun Stats <ul><li>? </li></ul>? ?
Fun Stats Date Value ?6 1/14/00 Start of Clinton Bull Market ?5 8/12/82 Start of Reagan Bull Market ?4 12/6/74 Dow: All Ti...
Fun Stats 11,723 1/14/00 Start of Clinton Bull Market 776 8/12/82 Start of Reagan Bull Market 577 12/6/74 Dow: All Time Lo...
So What Happened? <ul><li>An unswerving, if somewhat nationalistic  belief in the American Dream had us looking the other ...
Precipitated by a  ^ Sub Prime Meltdown Global Swiss, Saudi Arabia, Qatar, Israel . $2.5B write down with money raised fro...
The Scope of the Challenge US Purchased by BofA for $50B 5,200 jobs lost Merrill Lynch 9/08 Germany E$6B in write downs on...
The Scope of the Challenge US $32B takeover by FDIC at the time was second largest bank failure in US history; eventual co...
The Scope of the Challenge Reinvents itself away from investment banker;  Goldman Sachs 9/08 Japan Nomura purchases in “ex...
The Scope of the Challenge ?? Dutch, Tawain Gives up $11B equity after spinning off Taiwan Life Ins grp ING 9/08 France, B...
The Granddaddy of them all <ul><li>___________________  </li></ul><ul><li>Representing assets of </li></ul><ul><li>__$____...
US Seized and sold to JP Morgan after a $16.7B run on the bank; est $19B in bad debts; WAMU  (At $307B in assets & $188B i...
Fun Stats <ul><li>? </li></ul>? ?
“ Who Said It ” <ul><li>“ The notion of a bubble bursting and the whole price level coming down seems to me as far as a na...
“ We Never Saw It Coming ” <ul><li>“ The notion of a bubble bursting and the whole price level coming down seems to me as ...
Financial Market <ul><li>Job Losses –  130,000 jobs lost </li></ul><ul><ul><li>JP Morgan   3,000 </li></ul></ul><ul><ul><l...
Financial Market  130,000 Jobs Loss
LenderImplode.com <ul><li>Since late 2006, 304 major U.S. lending operations have &quot;imploded“ </li></ul>
“ We got a big problem”  -  George W. Bush, September, 2008
More Signs of the Times <ul><li>2 year bond falling due to high demand fearing long range “deflation.” </li></ul><ul><li>3...
Signs of the Time <ul><li>Sax 5 th  3Q loss worse than expected; </li></ul><ul><li>Home Depot 3Q down 30% from expectation...
Who’s Doing Well? ? ? ? ?8._____  _______
Who’s Doing Well? Wal-Mart  doing nicely realizing 50% of all retail gains; last yr only 10% of retail gains; Early econom...
Drastic Solutions in Drastic Times
?9. Can You Name This Man?
OK Just In Case You Were Sleeping <ul><li>There’s a man lose … </li></ul><ul><li>…  </li></ul><ul><li>with a wooden Stake!...
BUT <ul><li>… he’s from Goldman Sachs </li></ul>
The  ^ Solution <ul><li>Emergency Economic  </li></ul><ul><li>Stabilization  </li></ul><ul><li>Act of 2008. </li></ul>First
The  ^  Solution <ul><li>Term  </li></ul><ul><li>Asset-Backed Securities  </li></ul><ul><li>Loan Facility </li></ul>Second
Emergency Economic Stabilization Act of 2008 <ul><li>Authorizes Treasury to spend $700B to  </li></ul><ul><ul><li>Purchase...
EESA of 2008 <ul><li>Managed by the Office of Financial Stability within the Treasury Dept. </li></ul><ul><li>Consults wit...
Actions thus Far <ul><li>Allowed: </li></ul><ul><li>Immediate access to $250B </li></ul><ul><li>Additional access to $100B...
Creates  TARP ? <ul><li>To purchase toxic assets so as to free up banks to lend and re-open the credit markets. </li></ul>...
? So What Do the Economists Think? ? ? ? ? ? ?
Economists Seem to Have Four Concerns  <ul><li>Fairness : this seems to be a subsidy to Investors at taxpayers expense; </...
4. But Do Something :  There is widespread agreement that further erosion could have caused “massive systemic failure of g...
What if your  >>_____________________<<  failed just when you needed them?
That Brings us to the  ^ Solution  <ul><li>Actions Allowed </li></ul><ul><li>About $800B </li></ul><ul><li>To rejuvenate c...
Consider a microcosm for a Second and let’s make it personal…
So a Bailout was probably necessary.  Now what?
Worth Watching <ul><li>The Fundamental parts worth watching include: </li></ul><ul><li>Secretary Paulson’s long-bridled co...
Watching the Moving Parts <ul><li>The Original intent was: </li></ul><ul><li>Purchase distressed assets; </li></ul><ul><li...
New Foreclosures  <ul><li>  </li></ul>Nationwide numbers were 2,795,420 new filings and 479,461sales YTD through July. Thr...
The Latest Senate Banking Committee Chairman, Chris Dodd says Congress may have to reconsider some parts of the financial ...
?10. So What’s This Gonna Cost? <ul><li>$700B </li></ul><ul><li>$1.5T </li></ul><ul><li>Over $5T </li></ul><ul><li>Over $9...
How does this add up?  Maybe $8.5T (as in Trillion) <ul><li>Fed Reserve Programs Max Committed </li></ul><ul><ul><li>Comme...
How does this add up?  Maybe $8.5T (as in Trillion) <ul><li>FDIC Programs Max Committed  </li></ul><ul><ul><li>Loan Gts $1...
How does this add up?  Maybe $8.5T (as in Trillion) <ul><li>Treasury Dept Programs Max Committed </li></ul><ul><ul><li>TAR...
Total?  Over  $8.5T <ul><li>Fed Reserve Programs Max Committed </li></ul><ul><ul><li>$5.6T $2.1T </li></ul></ul><ul><li>FD...
Other Solutions to Watch <ul><li>Allow homeowners to borrow at Fed Funds rate; </li></ul><ul><li>Sheila Bair head of FDIC ...
We should be careful what we ask for.
Issues/Concerns <ul><li>Right now someone else owns the housing value melt-down, (i.e, China, Japan, Europe) </li></ul><ul...
But <ul><li>The key Consideration is embedded in who we are as Americans. </li></ul><ul><li>Entrepreneurs </li></ul><ul><l...
Some Presidential Numbers: 6.1% Inflation (CPI) N/A Unemployment rate 22.7% GDP growth $180 GDP (in billions) ECONOMY SNAP...
Also out There <ul><li>Mortgage Debt Relief Act of 2007. </li></ul><ul><li>Tax relief applying to certain mortgage debt fo...
Meanwhile:  Conserve and Control Replaces Conspicuous Consumption <ul><li>We may not need Victory Gardens again, but </li>...
Conserve and Control <ul><li>Loan Modifications </li></ul><ul><li>Short Sales </li></ul><ul><li>Financial Control </li></u...
<ul><li>Loan Modifications </li></ul><ul><li>Short Sales </li></ul><ul><li>Financial Training and Control </li></ul><ul><l...
Hope Never Hurts -Cornel Hunter
Thank You <ul><li>? </li></ul>? ? ?
Test Results <ul><li>0 to 3 correct answers: keep the day job </li></ul><ul><li>4 to 7 correct answers: stay after school ...
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Equinaire's TARP Overview

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A look at the "first" Economic stilumulus package and a look back on how it all happened.

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Equinaire's TARP Overview

  1. 1. A Look at The Federal Bailout(s) November 22, 2008 December 13, 2008
  2. 2. AKA: E mergency E conomic S tabilization A ct of 2008 AKA: TARP, or Troubled (“Toxic”) Asset Relief Program
  3. 3. AKA: E mergency E conomic S tabilization A ct of 2008 AKA: TARP, or Troubled (“Toxic”) Asset Relief Program And make room for: TALF, Term-Asset Backed Securities Loan Facility
  4. 4. Overview <ul><li>International, National and some Local History and Fallout; </li></ul><ul><li>Implications; </li></ul><ul><li>Pending Cures: </li></ul><ul><ul><li>USA </li></ul></ul><ul><ul><li>You and Me </li></ul></ul><ul><li>Outlook. </li></ul><ul><li>Drastic Solutions call for Drastic Times! </li></ul><ul><li>Q&A Throughout. </li></ul><ul><li>From Wall Street to main Street: The Modification Option – Equinaire’s new AmeRestart </li></ul>
  5. 5. The Current Economic Situation <ul><li>Unemployment </li></ul><ul><li>Stock, Commodities, Bond Values </li></ul><ul><li>Housing Starts & stats </li></ul><ul><li>Foreclosure Activity </li></ul><ul><li>Market Confidence </li></ul><ul><li>…A Bumpy Ride </li></ul>
  6. 6. The Current Economic Situation Unemployment Sept. Oct. Nov. Stock Market Friday Closes 1,523.57 741 6.32% +47.59 800.03 S&P 13,780.11 7,449 6.14% +494.13 8,046.42 Dow 52 wk Hi 52 wk Lo %B(W) B(W) close November 21, Florida Texas California National 6.4 5.1 7.7 6.1 6.6 5.6 8.2 6.5 7.0e 6.7 .70% 6.14 ?2 S&P .75% 64.59 ?1 Dow %B(W) B(W) close December 12 ,
  7. 7. The Current Economic Situation Unemployment Sept. Oct. Nov. Stock Market Friday Closes 1,523.57 741 6.32% +47.59 800.03 S&P 13,780.11 7,449 6.14% +494.13 8,046.42 Dow 52 wk Hi 52 wk Lo %B(W) B(W) close November 21, Florida Texas California National 6.4 5.1 7.7 6.1 6.6 5.6 8.2 6.5 7.0e 6.7 .70% 6.14 879.73 S&P .75% 64.59 8,629.68 Dow %B(W) B(W) close December 12 ,
  8. 8. Fun Stats <ul><li>? </li></ul>? ?
  9. 9. Fun Stats Date Value ?6 1/14/00 Start of Clinton Bull Market ?5 8/12/82 Start of Reagan Bull Market ?4 12/6/74 Dow: All Time Low 14,164 ?3 Dow: All Time High
  10. 10. Fun Stats 11,723 1/14/00 Start of Clinton Bull Market 776 8/12/82 Start of Reagan Bull Market 577 12/6/74 Dow: All Time Low 14,164 10/9/07 Dow: All Time High
  11. 11. So What Happened? <ul><li>An unswerving, if somewhat nationalistic belief in the American Dream had us looking the other way: </li></ul>
  12. 12. Precipitated by a ^ Sub Prime Meltdown Global Swiss, Saudi Arabia, Qatar, Israel . $2.5B write down with money raised from Qatar Sovereign Fund; Saudi Arabia; and Israel’s Koor Ind Credit Suisse 2/08 France E$7B write down of US subprime Societe General 1/08 UK $45B bailout of a $2.5T Asset institution HSBC 11/07 Swiss $4B write down of Subprime mortgages USB 9/07 UK $42B rescue by Bank of England Northern Rock (Lender) 9/07
  13. 13. The Scope of the Challenge US Purchased by BofA for $50B 5,200 jobs lost Merrill Lynch 9/08 Germany E$6B in write downs on a $2.6T in assets Deutsche Bk 7/08 US, Japan Announces “an issue” – Japan freezes Asian assets Eventually losing 13,900 jobs 10/08 Lehman Bros 6/08 Scotland L$12B “right issue” Royal Bank of Scotland 4/08 US After 85yrs, sold to JPMorgan/Chase for $2/sh – eventually $10/sh; JP Morgan later bought WAMU for $1.9B Bear Sterns 3/08
  14. 14. The Scope of the Challenge US $32B takeover by FDIC at the time was second largest bank failure in US history; eventual cost of $4B - $8B IndyMac 7/08
  15. 15. The Scope of the Challenge Reinvents itself away from investment banker; Goldman Sachs 9/08 Japan Nomura purchases in “exclusive talks” Lehman, Asia 9/08 Japan Mitsubishi, UFG takes 10% -20% stake for $9B with at least one representative on their board Morgan Stanley 9/08 After BK filing, Barclay’s UK pays $1.75B Lehman, N. America 9/08 UK UK’s largest mortgage lender taken over by Lloyds using L$11.5b in gov funding HBOS, PLC 9/08
  16. 16. The Scope of the Challenge ?? Dutch, Tawain Gives up $11B equity after spinning off Taiwan Life Ins grp ING 9/08 France, Belgium, Dutch, Luxemborg, French bank agrees to take over Fortis buying out Belgium’s interest BPN, Paribas 9/08 Iceland Iceland’s 3 rd largest bank nationalized; Glitner 9/08 US $12B bailout; sold initially to Citi Wachovia 9/08
  17. 17. The Granddaddy of them all <ul><li>___________________ </li></ul><ul><li>Representing assets of </li></ul><ul><li>__$__________________ </li></ul>? ? ?
  18. 18. US Seized and sold to JP Morgan after a $16.7B run on the bank; est $19B in bad debts; WAMU (At $307B in assets & $188B in Dep’s, biggest bank failure in US history) 9/08
  19. 19. Fun Stats <ul><li>? </li></ul>? ?
  20. 20. “ Who Said It ” <ul><li>“ The notion of a bubble bursting and the whole price level coming down seems to me as far as a national nationwide phenomenon, is really quite unlikely </li></ul><ul><li>“ Housing activity will remain healthy for some time to come” </li></ul><ul><li>“ The idea that we’re going to see a collapse in he housing market seems to me improbable” </li></ul><ul><li>“ It’s impossible for prices to go down this year” </li></ul><ul><li>At this juncture, the impact on the broader economy and financial markets of the problems in the sub prime market seems likely to be contained” </li></ul><ul><li>“ We got a big problem” </li></ul>
  21. 21. “ We Never Saw It Coming ” <ul><li>“ The notion of a bubble bursting and the whole price level coming down seems to me as far as a national nationwide phenomenon, is really quite unlikely.” Alan Greenspan Fed Reserve Chairman, 2003 </li></ul><ul><li>“ Housing activity will remain healthy for some time to come” David Lereah, NAR’s Chief Economist, 2005 </li></ul><ul><li>“ The idea that we’re going to see a collapse in he housing market seems to me improbable” John Snow, Treasury secretary, 2005 </li></ul><ul><li>“ It’s impossible for prices to go down this year” Garry Watts, Orange County Assoc of Realtors, 2006 </li></ul><ul><li>At this juncture, the impact on the broader economy and financial markets of the problems in the sub prime market seems likely to be contained” Ben Bernanke, Fed Reserve Chairman, 2007 </li></ul><ul><li>“ We got a big problem” ???? </li></ul>
  22. 22. Financial Market <ul><li>Job Losses – 130,000 jobs lost </li></ul><ul><ul><li>JP Morgan 3,000 </li></ul></ul><ul><ul><li>Deutsche 900 </li></ul></ul><ul><ul><li>Citi 52,000 e </li></ul></ul><ul><ul><li>RBS 3,000 </li></ul></ul><ul><ul><li>Morgan 2,000 </li></ul></ul><ul><ul><li>Amex 7,000 (10%) </li></ul></ul><ul><ul><li>Goldman 10% </li></ul></ul>
  23. 23. Financial Market 130,000 Jobs Loss
  24. 24. LenderImplode.com <ul><li>Since late 2006, 304 major U.S. lending operations have &quot;imploded“ </li></ul>
  25. 25. “ We got a big problem” - George W. Bush, September, 2008
  26. 26. More Signs of the Times <ul><li>2 year bond falling due to high demand fearing long range “deflation.” </li></ul><ul><li>30Yr dropped below 4% </li></ul><ul><li>More recently, the 3 month T ’Bill dropped to zero yield; </li></ul><ul><li>S&P - probably the most watched indicator in the world since it’s a broader measure than the Dow – sank to 13 year low; </li></ul><ul><li>Dow below $8k since 2003 </li></ul><ul><li>Citi (after taking its SIV’s onto it’s balance sheet) still losing value by the buckets, rumored to layoff another 52,000 employees. Stock below $4. </li></ul><ul><li>GM at $3.06, Ford at $1.03 </li></ul><ul><li>Feds seizes Downey and PFF </li></ul><ul><li>More recently BofA announced a layoff affecting 32,000 workers. </li></ul>
  27. 27. Signs of the Time <ul><li>Sax 5 th 3Q loss worse than expected; </li></ul><ul><li>Home Depot 3Q down 30% from expectations – actually down 8% versus expected 5% decline; </li></ul><ul><li>Circuit city – BK </li></ul><ul><li>I did look over the LA Times business section this morning… Remember They’re in BK protection… 4 pages on a Friday. </li></ul>
  28. 28. Who’s Doing Well? ? ? ? ?8._____ _______
  29. 29. Who’s Doing Well? Wal-Mart doing nicely realizing 50% of all retail gains; last yr only 10% of retail gains; Early economic indicator may be Starbucks
  30. 30. Drastic Solutions in Drastic Times
  31. 31. ?9. Can You Name This Man?
  32. 32. OK Just In Case You Were Sleeping <ul><li>There’s a man lose … </li></ul><ul><li>… </li></ul><ul><li>with a wooden Stake! </li></ul><ul><li>… And a hammer! </li></ul><ul><li>. </li></ul>Secretary of The Treasury, Henry M. Paulson, Jr.
  33. 33. BUT <ul><li>… he’s from Goldman Sachs </li></ul>
  34. 34. The ^ Solution <ul><li>Emergency Economic </li></ul><ul><li>Stabilization </li></ul><ul><li>Act of 2008. </li></ul>First
  35. 35. The ^ Solution <ul><li>Term </li></ul><ul><li>Asset-Backed Securities </li></ul><ul><li>Loan Facility </li></ul>Second
  36. 36. Emergency Economic Stabilization Act of 2008 <ul><li>Authorizes Treasury to spend $700B to </li></ul><ul><ul><li>Purchase distressed assets </li></ul></ul><ul><ul><li>Make capital injections into banks </li></ul></ul><ul><li>Originally 3 pages when it started in the House; </li></ul><ul><li>Became 110 pages by the Senate; </li></ul><ul><li>After another $150B in “unrelated provisions” it became 451 pages by the time it was signed; </li></ul>
  37. 37. EESA of 2008 <ul><li>Managed by the Office of Financial Stability within the Treasury Dept. </li></ul><ul><li>Consults with: </li></ul><ul><ul><li>Bd of Gov’s of Federal Rsrv. </li></ul></ul><ul><ul><li>FDIC’ </li></ul></ul><ul><ul><li>Comptroller of the Currency </li></ul></ul><ul><ul><li>Director of Office of Thrift Supervision </li></ul></ul><ul><ul><li>Secretary of HUD </li></ul></ul>
  38. 38. Actions thus Far <ul><li>Allowed: </li></ul><ul><li>Immediate access to $250B </li></ul><ul><li>Additional access to $100B with Presidents Authorization </li></ul><ul><li>For the Final $350B, President must notify Congress. They have 15 days to stop it by legislation. President can veto. Congress can override. </li></ul><ul><li>Done: </li></ul><ul><li>Money dispersed to 87 banks in 30 states; </li></ul><ul><li>Some measure of secrecy of any troubled banks; </li></ul><ul><li>Tres Secy to develop Foreclosure assist plan </li></ul><ul><li>Svcrs encouraged to do loan mods and HOPE. </li></ul>
  39. 39. Creates TARP ? <ul><li>To purchase toxic assets so as to free up banks to lend and re-open the credit markets. </li></ul><ul><ul><ul><li>Pro’s: market intervention is vital to prevent further erosion in credit markets; </li></ul></ul></ul><ul><ul><ul><li>Con’s: Problems created by excess credit and debt are not solved by a massive infusion of excess capital and debt; </li></ul></ul></ul><ul><li>Think of it like standing at the top of a sliding board with a smoldering fire underneath: </li></ul><ul><ul><li>Pro’s want to go down on the slide side, legs first; </li></ul></ul><ul><ul><li>Con’s think investors should jump off the top of the staircase, head first. </li></ul></ul><ul><ul><li>And Main street only knows that parks are where the bullies are… </li></ul></ul>
  40. 40. ? So What Do the Economists Think? ? ? ? ? ? ?
  41. 41. Economists Seem to Have Four Concerns <ul><li>Fairness : this seems to be a subsidy to Investors at taxpayers expense; </li></ul><ul><li>Ambiguity : Mission and oversight are unclear including which assets and at what terms; Oversight and accountability is also unclear; </li></ul><ul><li>Long Term Effect: Gov’t intervention in free markets fundamentally weakens them; Exposes US to global scrutiny; </li></ul>
  42. 42. 4. But Do Something : There is widespread agreement that further erosion could have caused “massive systemic failure of global financial markets.”
  43. 43. What if your >>_____________________<< failed just when you needed them?
  44. 44. That Brings us to the ^ Solution <ul><li>Actions Allowed </li></ul><ul><li>About $800B </li></ul><ul><li>To rejuvenate consumption and mortgage credit; </li></ul><ul><li>Restore confidence in stock market by offering support in the asset-backed markets (Credit cards, SBA loans, auto and student loans) </li></ul><ul><li>Allowed Are: </li></ul><ul><li>$200B in new Gts </li></ul><ul><li>$100B in direct debt purch Fannie, Freddie & FHLB </li></ul><ul><li>$500B of MBS to Fannie, Freddie and Ginnie </li></ul><ul><li>Actions Taken </li></ul><ul><li>Has Obama’s support </li></ul><ul><li>Film at Eleven – more to follow; </li></ul>Second Term Asset-Backed Securities Loan Facility, TALF, 11/25/08
  45. 45. Consider a microcosm for a Second and let’s make it personal…
  46. 46. So a Bailout was probably necessary. Now what?
  47. 47. Worth Watching <ul><li>The Fundamental parts worth watching include: </li></ul><ul><li>Secretary Paulson’s long-bridled control and shifting attention; </li></ul><ul><li>The TARP targets – how much is main street versus wall street; </li></ul><ul><li>Those Banks blessed with portions and their use of the funds; </li></ul><ul><li>Current AND New Administration announcements & hints. </li></ul>
  48. 48. Watching the Moving Parts <ul><li>The Original intent was: </li></ul><ul><li>Purchase distressed assets; </li></ul><ul><li>Make capital injections into banks; </li></ul><ul><li>11/14 update: </li></ul><ul><li>Stock Purchase of financial firms; </li></ul><ul><li>Fed financing for investors in securities back by consumer debt such as car loans, student loans and credit cards; </li></ul><ul><li>Big Three Discussions </li></ul><ul><li>Subsidies to mitigate mortgage foreclosure; </li></ul>
  49. 49. New Foreclosures <ul><li>  </li></ul>Nationwide numbers were 2,795,420 new filings and 479,461sales YTD through July. Through October, 2008
  50. 50. The Latest Senate Banking Committee Chairman, Chris Dodd says Congress may have to reconsider some parts of the financial plan it approved. Ford, Chrysler and GM seek $25B to “retool.” Question: Does trading the corp. jet for a PR road rally show they understand Main St sentiment? Question : Why has this become a political play when the election is safely behind us? ? ?
  51. 51. ?10. So What’s This Gonna Cost? <ul><li>$700B </li></ul><ul><li>$1.5T </li></ul><ul><li>Over $5T </li></ul><ul><li>Over $9T </li></ul><ul><li>Who Knows </li></ul>? ? ?
  52. 52. How does this add up? Maybe $8.5T (as in Trillion) <ul><li>Fed Reserve Programs Max Committed </li></ul><ul><ul><li>Commercial paper program $1.8T $271B </li></ul></ul><ul><ul><li>Term Auction Facility (for Bnks) .9T $415B </li></ul></ul><ul><ul><li>Fannie/Freddie Debt Purchase .6T 0 </li></ul></ul><ul><ul><li>Citigroup bailout $291B $291B </li></ul></ul><ul><ul><li>AIG and other Credit extensions $123B $123B </li></ul></ul><ul><ul><li>Bear Sterns Asset Gt to JP Morgan $29B $27B </li></ul></ul><ul><ul><li>Fed Totals incl other $5.6T $2.1T </li></ul></ul>
  53. 53. How does this add up? Maybe $8.5T (as in Trillion) <ul><li>FDIC Programs Max Committed </li></ul><ul><ul><li>Loan Gts $1.4T $0 </li></ul></ul><ul><ul><li>Gt to GE Capital $139B $139B </li></ul></ul><ul><ul><li>Citi Bailout toxic asset Gt $10B $10B </li></ul></ul><ul><ul><li>FDIC Totals incl other programs $1.5T $149B </li></ul></ul>
  54. 54. How does this add up? Maybe $8.5T (as in Trillion) <ul><li>Treasury Dept Programs Max Committed </li></ul><ul><ul><li>TARP $700B $330B </li></ul></ul><ul><ul><li>Txpyr Rebates $168B $168B </li></ul></ul><ul><ul><li>Treasury total incl other prgrms $1.1T $597B </li></ul></ul><ul><li>Federal Housing Administration </li></ul><ul><ul><li>Hope for Homeowners $300B $300B </li></ul></ul>
  55. 55. Total? Over $8.5T <ul><li>Fed Reserve Programs Max Committed </li></ul><ul><ul><li>$5.6T $2.1T </li></ul></ul><ul><li>FDIC Programs </li></ul><ul><ul><li>$1.5T $149B </li></ul></ul><ul><li>Treasury Dept Programs </li></ul><ul><ul><li>$1.1T $597B </li></ul></ul><ul><li>Federal Housing Administration </li></ul><ul><li> (FHA) $300B $300B </li></ul><ul><li>U. S. Government </li></ul><ul><li>Total $8.5T $3.2T </li></ul><ul><li>Plus TALF $800B </li></ul><ul><li>$9.3T </li></ul>
  56. 56. Other Solutions to Watch <ul><li>Allow homeowners to borrow at Fed Funds rate; </li></ul><ul><li>Sheila Bair head of FDIC wants $40B to create a mortgage insuring vehicle to spark refi’s to save homeownership. </li></ul><ul><li>H4H – “HOPE” for Homeowners </li></ul><ul><li>New Administration in it’s first 100 days; </li></ul>
  57. 57. We should be careful what we ask for.
  58. 58. Issues/Concerns <ul><li>Right now someone else owns the housing value melt-down, (i.e, China, Japan, Europe) </li></ul><ul><li>Is our skin in the game? </li></ul><ul><li>… But it’s an INTERNATIONAL challenge ! </li></ul>
  59. 59. But <ul><li>The key Consideration is embedded in who we are as Americans. </li></ul><ul><li>Entrepreneurs </li></ul><ul><li>Innovative </li></ul><ul><li>Checks & Balances </li></ul><ul><li>“Refresh Button” - Democracy </li></ul><ul><li>Lead the Hunt </li></ul>
  60. 60. Some Presidential Numbers: 6.1% Inflation (CPI) N/A Unemployment rate 22.7% GDP growth $180 GDP (in billions) ECONOMY SNAPSHOT: 1943 4.2% Inflation (CPI) 3.6% Unemployment rate 9.3% GDP growth $910 GDP (in billions) ECONOMY SNAPSHOT: 1968 5.8% Inflation (CPI) 7.7% Unemployment rate 11.4% GDP growth $1.825 GDP (in trillions) ECONOMY SNAPSHOT: 1976 3.2% Inflation (CPI) 9.6% Unemployment rate 8.7% GDP growth $3.536 GDP (in trillions) ECONOMY SNAPSHOT: 1983 1.8% Inflation (CPI) 5.5% Unemployment rate 4.25% GDP growth $11.466 GDP (in trillions) ECONOMY SNAPSHOT: 2004*
  61. 61. Also out There <ul><li>Mortgage Debt Relief Act of 2007. </li></ul><ul><li>Tax relief applying to certain mortgage debt forgiveness normally 1099’d by lender. Extended to 2012 from 2009. </li></ul><ul><ul><li>O/O to $2MM per year </li></ul></ul><ul><li>Specialized FHA financing to 85% LTV with sacrifice of 50% – 100% of future equity </li></ul>
  62. 62. Meanwhile: Conserve and Control Replaces Conspicuous Consumption <ul><li>We may not need Victory Gardens again, but </li></ul><ul><ul><li>Not a bad idea to reflect back on how our parents’ parents maneuvered back then. </li></ul></ul><ul><li>Increased interest in public transportation and Green initiatives; </li></ul><ul><ul><li>Conspicuous consumption may have seen its day . </li></ul></ul><ul><li>Bankers are entrepreneurs too; We are survivors; </li></ul><ul><ul><li>Consumers trying to get their arms wrapped around personal credit </li></ul></ul><ul><ul><li>New credit vehicles emerging </li></ul></ul>
  63. 63. Conserve and Control <ul><li>Loan Modifications </li></ul><ul><li>Short Sales </li></ul><ul><li>Financial Control </li></ul>Granderson Associates Law Offices
  64. 64. <ul><li>Loan Modifications </li></ul><ul><li>Short Sales </li></ul><ul><li>Financial Training and Control </li></ul><ul><li>www.AmeRestart.Com </li></ul>
  65. 65. Hope Never Hurts -Cornel Hunter
  66. 66. Thank You <ul><li>? </li></ul>? ? ?
  67. 67. Test Results <ul><li>0 to 3 correct answers: keep the day job </li></ul><ul><li>4 to 7 correct answers: stay after school </li></ul><ul><li>8 to 9 correct answers: Economic Genius </li></ul><ul><li>10 (or More) correct answers: go to </li></ul><ul><li>www.obamaeconadvisor.whatever </li></ul><ul><li>You’re needed in Washington!!! </li></ul>

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