"Bailout" or Windfall?

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Real Estate Agent with Associate Broker at Berkshire Hathaway Home Services Georgia Properties 256152

There was an article in the Washington Post yesterday about how "Main Street" could actually profit from the "bailout". The proponent of the theory and author of the piece is Bill Gross, who is the founder of the investment management firm PIMCO.

While the media insists on calling this bill a Wall Street bailout, insinuating that taxpayers will get nothing in return for $700 billion, the facts are that the people being bailed out likely have never seen Wall Street. Gross uses the figure of 65 cents on the dollar to value mortgages that will be turned over, so they do have some value. He concedes that it may be higher or lower, but value will be present.

Without detailing his entire article, which can be found by a Google of Bill Gross Washington Post, the point he makes is that the fed could actually liquidate these properties over the course of time and make money doing it. While I'm not sure that I believe we will sustain a profit, it is very plausible that we will not lose anything close to the entire takeover.

He advocates a stronger oversight than originally called for, which makes sense since Henry Paulson walked away from Goldman-Sachs two years ago with a $140 million parachute. That would be the same company currently on the financial deck, so I'm not sure I totally trust his abilities by himself.

I am hopeful that the program will clean up both the financial and the real estate industries. It is long overdue. I am also praying that those who decided to enter the real estate business for the easy money, will go back to work at whatever didn't teach them a work ethic to make them succeed.

Check out www.PickensCountyLines.com and www.RonBarnesRealEstate.com

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Rainer
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Jane Page Thompson
Aiken Properties - Aiken, SC

I think there is a lot of regulation needed to fix both industries and totalitarian oversight will be required- Clinton's deregulation has caused this current situation, we need to controls back.  Have you seen the Riff Plan?  I think that is the name, I saw it last night- an economist has proposed taking the 700 billion and dividing it up among every US legal citizen over 18 which would put $400K plus in their hands, charge a 30% cap gain to give the Gov, 25 billion back right away and let the individuals payoff mortgages, college debt, & car loans feeding cash into banks and then spurring the economy from the grass roots, not bailing out the top 1%.

Sep 27, 2008 07:42 AM #1
Rainmaker
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Ron Barnes
Associate Broker at Berkshire Hathaway Home Services Georgia Properties - Jasper, GA
"Most agents claim they're #1 ... I THINK YOU'RE #

It's funny how economists always have the answers, but they still can't tell us what is going to happen. When I worked for GE, Jack Welch was still there, and he was a wizard, so when Jack Welch and Warren Buffet both tell us what we need, I listen to them first and everyone else whenever. Thanks for the interesting comment!

Sep 27, 2008 09:41 AM #2
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Rainmaker
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Ron Barnes

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