Obama Is Seeing Rays of Hope as Foreclosure Crisis Weakens

Posted on April 22, 2009
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Obama is optimistic and upbeat. With his eyes he is seeing rays of hope as the foreclosure crisis weakens. Many pundits may not agree with him.

On Friday 10th April President Barack Obama promised to introduce more measures to grapple with the foreclosure crisis although he admitted that the economic health of the nation was “still under severe stress.” He was seeing “glimmers of hope” across the nation.

Speaking to reporters at the White House after being told about the condition of the economy from his group of advisers he said, “We’re starting to see progress. And if we stick with it, if we don’t flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track.”

The economy seems to be benefiting from the $787 billion economic stimulus package as well as better mortgage rates and an increase in loans being given to small entrepreneurs. However he admitted that unemployment and lay offs were hitting Americans. Many have lost their residences to foreclosures and have seen their savings vanish. Thus he said that there is lots of work yet to be done.

Specifically he did not say what extra steps would be taken to help tackle the ongoing financial crisis that will ultimately lead to the economy turning around.

Although his tone was enthusiastic he did not say that the recession was declining and when pressed by questions he parried by saying, “I’m saying we’re seeing progress.” There were obvious signs that the Obama team continued to be worried about the weak state of the financial system. It is reported that the government has asked the banks not to talk about the ‘stress tests’ the government has ordered. It has been done because the administration wants to find out if the banks require further capital.

The Treasury is concerned that if the matter about the tests being taken of 19 jumbo banks of the country got leaked the investors would begin to panic more about the health of the system itself.

The plan of the stress test came from Treasury Secretary Timothy Geithner to calm the jitters. He wanted to show that the banks had enough capital to make up for the losses of the past two years – even if the economy slides down further, unemployment increases and real estate prices continue to fall. If the test shows that the funds of the bank are insufficient then capital would be raised from private sources or many be more bailout money would be doled out.

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