Beginning of the End !

Oil barrel prices have been at an all time high, over $100.00 per barrel for the last two weeks straight. Foreclosures are setting records across the nation, Countrywide Financial, the nations largest mortgage lender has an inventory of nearly 40,000 foreclosed homes. The dollar is not as strong against the yen or the euro, and Moody's Economy.com states that we have begun a mild recession.

From the coast to coast gas prices are changing at the pumps on a daily basis. People in California are reporting gas prices of $3.99 per gallon, people in the Southeast report gas at $3.29 per gallon, people in the Northeast report gas prices at $3.45 per gallon.

The trucking industry is taking a major hit with most of our domestic goods needing to be shipped by truck and the average price of diesel at $3.79 per gallon. Truck drivers can't keep up with the fuel sur-charge with the price of fuel changing on a daily basis.

People are taking money out of their food budgets, just to keep fuel in the cars to keep them going to work. Elderly are taking money from their medicine budgets just to keep gas in their cars. People are not buying things like electronics or automobiles or houses or others items that drive our economy, which is driving us more into a recession.

Since the only commodity that is moving on the stock market is the barrel price of oil, other stocks are plummeting downward. The federal governments response is to lower the prime interest rate, but all that does is also lower the interest rate at what you can invest your money in T-Bills, C.D., and T-Notes. A 6 month T-Bill you can invest in now for an interest rate of 1.39%, but that same T-Bill 6 months ago you could invest in and get a rate of 4.56%.

So how did we get to this point? In the years leading up to this many people were approved for mortgages that should not have gotten one. They were given mortgages with little or no down payments with what was called ARMs (Adjustable-Rate Mortgages), which means that the borrower goes in with a low interest rate and mortgage payment, but in a few years it balloons and will fluctuate to whatever the going interest rate is and could push up the borrower's payment as much as $600.00 per month.

With almost 50% of our nation living on credit card debit, and the amount of ARMs that were given out during the Bush administration to keep our economy thriving, it soon caught up with us. JP Morgan Chase saw a 38% jump in foreclosures in the past 2 years. Freddie Mac and Residential Capitol have seen a 20% jump since September. With each foreclosure in your neighborhood it lowers the price of your home 1.5%. As home prices fall homeowners find that their homes are worth less than what they owe and many are just giving up. Many lenders are trying to contact delinquent borrowers only to have the keys to the home mailed back to them.

People are giving up and sending in the keys to their homes. People can't afford to buy new things to keep other Americans working. People can't afford to keep gas in their cars and buy food for their tables. People can't afford health care or the medicine that is prescribed for them. Is this the beginning of the End?

The next President and administration has a lot to work on, no matter who he or she may be!!

Frank WOLF TM © 2005
Watchdog - Taking a BITE out of corruption.

Copyright © Frank J. Ball Sr. March 16th, 2008
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