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$700 Billion Bailout: The Emergency Economic Stabilization Act and What It Means to You, Your Money, Your Mortgage and Your Taxes



$700 Billion Bailout: The Emergency Economic Stabilization Act and What It Means to You, Your Money, Your Mortgage and Your Taxes

Paul Muolo

ISBN: 978-0-470-47163-0 December 2008 208 Pages


The book is an analysis of the controversial Emergency Economic Stabilization Act and explains in easy to understand language what the bailout bill means for individuals. $700 Billion Bailout answers questions such as:
  • What does the bill say, exactly?
  • Who is making decisions about how the $700 billion will be spent, and what does it mean now that the government is investing directly in our banks?
  • Who’s footing the bill?
  • What is the impact on homeowners, businesses, retirement, and taxes?
  • Where do I put my money in the meantime?

Veteran reporter Paul Muolo shows both the challenges and opportunities of the credit crisis and proposed bailout, including its impact on:

  • Mortgages: While rates may be lower, there will be more fees imposed on mortgages. Lenders will be far more cautious in lending, and people who cannot meet their mortgages are likely to lose these homes. This may create a “contrarian” plays in foreclosures and vacation homes..
  • Stocks and Other Investments: Is now the time to get into the stock market or is it safer to stick with CDs, bonds, and gold?
  • Taxes: With the tax breaks, there will be less tax revenue leading to a huge shortfall to the government over the next few years.

He will offer insight into these areas and many others, including how the structure of the bailout bill allows for unprecedented authority that has altered the financial landscape, perhaps permanently.   Will the plan work, and how we can prevent this from happening again remains to be seen, but with $700 Billion Bailout Paul Muolo gives us a critical tool for deciphering perhaps the most sweeping piece of legislation since the Patriot Act.

Author’s Note The $700 Billion Bailout Bill: What Is This Monster? ix

Introduction Original Sin: The Emergency Economic Stabilization Act of 2008: The Patriot Act Meets the World of Finance 1

Chapter 1 The Big Hoist: Will the $700 Billion Bailout of the Mortgage and Credit Markets Work? (It Had Better) 11

How the $700 Billion Bailout Machine Will Work and Who Will Enforce It 14

How TARP Will Work 16

Will the Taxpayers Ever Get Their $700 Billion Back? 24

Should Fannie and Freddie Be Eliminated? 28

Chapter 2 The Three Most Important Things You Need to Know Now—Mortgages, Rates, and Housing 31

The Bailout Bill: First, the Good News 36

Call Up Your Lender and Shout, “I Want to Restructure My Mortgage!” 41

The Bad News: Getting a Mortgage Is Going to Be Much Tougher 46

A Word about Interest Rates 48

Falling Home Values 50

The Wealthy Will Not Escape Unscathed 51

The Silver Lining: Falling Home Prices Mean Bargains for Some 52

How Will We Know When Home Prices Have Stopped Falling? 53

Chapter 3 Where to Put Your Money Now (Hint: Not in a Vacation Home) 55

The Day the Flipping Stopped 58

The Contrarian Play in Vacation Homes 61

Investing in Foreclosures 62

Stocks: Is Now the Time to Get In? 63

Once You Decide to Jump In . . . 67

Safe Havens: Ginnie Mae and Treasury Bond Mutual Funds 68

A Word about Gold 70

The Safest Haven of All: CDs and Savings Accounts in Federally Insured Banks, S&Ls, and Credit Unions 70

Chapter 4 Taxes and Politics: EESA Digs a Deeper Money Hole for All of Us 73

What Tax “Bennies” Were Actually Given Away? 76

What Do All These Tax Breaks Mean for the Consumer? 81

The Last Word: Politics 83

Epilogue The Last Word: If I Ran the Regulatory Zoo 87

Excerpts from the Emergency Economic Stabilization Act of 2008 91

Glossary of Terms and Agencies 177

About the Author 187