How we head towards foreclosures! by Silvia Szarkova

Tuesday was a very busy day for Treasury and some Congress members. They had a breaking debate on how to use best the money of 700 billion dollars and how to do it the way it stops the current financial crisis and in addition will stimulate economy.
The financial package of above-mentioned 700 billion dollars was originated to buy bad loans from banks, so they could provide fresh loans, but later was scrapped by Treasury and went to buy equities in biggest banks in United States. Some lawmakers were, of course, upset by this step.
But Henry Paulson, Secretary of Treasure, explains: "The rescue package was not intended to be an economic stimulus or an economic recovery package. It was intended to shore up the foundation of our economy by stabilizing the financial system," the Treasury chief insisted.
Barney Frank, Rep., opposes him: "The fundamental policy issue is our disappointment that funds are not being used out of the $700 billion to supplement mortgage foreclosure reduction," Barney Frank said. "There, I believe, is an overwhelmingly ... powerful set of reasons why some of the ... money must be used for mortgage foreclosure."
Federal Deposit Insurance Corporation Chairman Sheila Bair at the same hearing told lawmakers that it should be essential Treasury offer loan guarantees and credit foreclosures, in other way, in upcoming two years, 4 million to 5 million mortgages will end up with foreclosures. So that is why something must be done.
Paulson then added that this financial crisis is very unpredictable, even banking industry is confused in basics. President of American Bankers Association Edward Yingling told how confusing is this situation for bankers, mainly because customers do not know how to react.
It seems like nobody really knows what to do, but continuing this trend, we really heads to foreclosures and as everybody says that would mean a long and deep depression for U.S. Nobody consider the fact: what if we are already in it, because everything is like we would.


related story: http://news.yahoo.com/s/nm/us_financial_usa;_ylt=AoLU4Cfk1x__R5Jbs286aq2s0NUE

by Silvia Szarkova for PocketNews (http://pocketnews.tv)

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edited by Beata Biskova