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Fannie Mae and Freddie Mac, Lehman Brothers and Merrill Lynch: four names floating around the finance world with implications for all. Folks who thought Bear Stearns was the worst of it have learned different.
A 20-percent drop is supposed to define a bear market; last week”™s Dow Industrial average was close to 24 percent off highs.
Suddenly, arbitragers are out and old-school bankers are in. And every newspaper in the land last week trumpeted a bold new financial landscape.
John McCain and Barack Obama both realize the necessity of handling the mortgage and credit crisis, as well as banking and finance concerns. Here”™s where they stand:
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Barack Obama:
Obama wants to crack down on fraudulent brokers and lenders by creating a 10 percent universal mortgage credit and will seek to eliminate the provision that prevents bankruptcy courts from modifying an individual’s mortgage payments. Obama calls the crisis in the U.S. banking industry a “major threat” to the economy and seeks to create jobs that would assist Americans in paying their bills. If the government takes over mortgage conglomerates, he believes taxpayers and homeowners must come first. He is openly against favoring lobbyists and special interests, saying it”™s essential to strengthen the economy and put the people first. He is calling for a second stimulus package this year, providing a tax rebate to individuals and state assistance for education, health care and miscellaneous costs. He wants to modernize regulations and create a 21st-century market to protect investors and consumers.
Sources: www.barackobama.com/issues, www.cnnmoney.com, www.msnbc.com.
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John McCain:
McCain feels it”™s necessary to restructure mortgage giants and says that he would be committed to making them smaller and more effective for homeowners. He agrees with Obama, in a sense, that there must be change and they must put an end to “cronyism” in Washington. McCain believes there should be no taxpayer-financed bailout of Lehman Brothers, but does believe there needs to be stricter financial regulation. He says his administration would bring accountability and transparency to Wall Street and would reform regulatory bodies of government. He, however, believes that the fundamentals of the economy are strong and promises he would never let America fall into a similar situation again or allow policies that would threaten American ideals, such as small businesses.
Sources: www.johnmccain.com/informing/issues, www.cnn.com
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