thank you for join me here todai __PUNCT__
i just return from a trip oversea that includ assess the state of affair in iraq __PUNCT__ the middl east __PUNCT__ and europ __PUNCT__
i will have more to sai on those import issu in the dai and week to come __PUNCT__
while i wa travel oversea __PUNCT__ our financi market experienc anoth round of upheav __PUNCT__
thi market turmoil leav mani american feel both concern and angri __PUNCT__
peopl see the valu of their home fall at the same time that the price of gasolin and food is rise __PUNCT__
alreadi tight household budget ar get tighter __PUNCT__
a lot of american read the headlin about credit crunch and liquid crise and ask __PUNCT__ how did we get here __PUNCT__ in the end __PUNCT__ the motiv and behavior that caus the current crisi ar not terribl complic __PUNCT__ even though the alphabet soup of financi instrument is complex __PUNCT__
the past decad wit the largest increas in home ownership in the past __NUM__ year __PUNCT__
home ownership is part of the american dream __PUNCT__ and we want as mani american as possibl to be abl to afford their own home __PUNCT__
but in the process of a huge __PUNCT__ and larg posit __PUNCT__ upturn in home construct and ownership __PUNCT__ a hous bubbl wa creat __PUNCT__
a bubbl occur when price ar driven up too quickli __PUNCT__ specul move into market __PUNCT__ and these player begin to suspend the normal rule of risk and assum that price can onli move up __PUNCT__ but never down __PUNCT__
we seen thi kind of bubbl befor __PUNCT__ in the late 1990 __PUNCT__ we had the technolog bubbl __PUNCT__ when monei pour into technolog stock and peopl assum that those stock valu would rise indefinit __PUNCT__
between __NUM__ and __NUM__ hous price rose by nearli __NUM__ percent everi year __PUNCT__
the normal market forc of peopl bui and sell their home were overwhelm by rampant specul __PUNCT__
our system of market check and balanc did not correct thi until the bubbl burst __PUNCT__
a sustain period of rise home price made mani home lender complac __PUNCT__ give them a fals sens of secur and caus them to lower their lend standard __PUNCT__
thei stop ask basic question of their borrow like __PUNCT__ can you afford thi home __PUNCT__ can you put a reason amount of monei down __PUNCT__ lender end up violat the basic rule of bank __PUNCT__ don't lend peopl monei who can't pai it back __PUNCT__
some american bought home thei couldn't afford __PUNCT__ bet that rise price would make it easier to refin later at more afford rate __PUNCT__
there ar __NUM__ million famili home in america and those homeown ar now face the realiti that the bubbl ha burst and price go down as well as up __PUNCT__
of those __NUM__ million homeown __PUNCT__ onli __NUM__ million have a mortgag at all __PUNCT__ and __NUM__ million ar do what is necessari __PUNCT__ work a second job __PUNCT__ skip a vacat __PUNCT__ and manag their budget __PUNCT__ to make their payment on time __PUNCT__
that leav us with a puzzl situat __PUNCT__ how could __NUM__ million mortgag caus thi much troubl for us all __PUNCT__ the other part of what happen wa an explos of complex financi instrument that weren't particularli well understood by even the most sophist bank __PUNCT__ lender and hedg fund __PUNCT__
to make matter wors __PUNCT__ these instrument __PUNCT__ which basic bundl togeth mortgag and sold them to other to spread risk throughout our capit market __PUNCT__ were mostli off __PUNCT__ balanc sheet __PUNCT__ and hidden from scrutini __PUNCT__
in other word __PUNCT__ the hous bubbl wa made wors by a seri of complex __PUNCT__ inter __PUNCT__ connect financi bet that were not transpar or fulli understood __PUNCT__
that mean thei weren't alwai manag wise becaus peopl couldn't properli quantifi the risk or the valu of these bet __PUNCT__
and becaus these instrument were bundl and sold and resold __PUNCT__ it becam harder and harder to find and connect up a real lender with a real borrow __PUNCT__
capit market work best when there is both account and transpar __PUNCT__
in the case of our current crisi __PUNCT__ both were lack __PUNCT__
becaus manag did not fulli understand the complex financi instrument and becaus there wa insuffici transpar when thei did try to learn __PUNCT__ the initi loss spawn a crisi of confid in the market __PUNCT__
market player ar increasingli unnerv by the uncertainti surround the level of risk __PUNCT__ liabil and loss current in the financi system __PUNCT__
bank no longer trust each other and ar increasingli unwil to put their monei to work __PUNCT__
credit is dry up and liquid is now sever limit __PUNCT__ and small busi and hard __PUNCT__ work famili find themselv unabl to get their usual loan __PUNCT__
the net result is the crisi we face __PUNCT__
what start as a problem in subprim loan ha now convuls the entir financi system __PUNCT__
let start with some straight talk __PUNCT__ i will not plai elect year polit with the hous crisi __PUNCT__
i will evalu everyth in term of whether it might be harm or help to our effort to deal with the crisi we face now __PUNCT__
i have alwai been commit to the principl that it is not the duti of govern to bail out and reward those who act irrespons __PUNCT__ whether thei ar big bank or small borrow __PUNCT__
govern assist to the bank system should be base sole on prevent system risk that would endang the entir financi system and the economi __PUNCT__
in our effort to help deserv homeown __PUNCT__ no assist should be given to specul __PUNCT__
ani assist for borrow should be focus sole on homeown __PUNCT__ not peopl who bought hous for specul purpos __PUNCT__ to rent or as second home __PUNCT__
ani assist must be temporari and must not reward peopl who were irrespons at the expens of those who weren't __PUNCT__
i will consid ani and all propos base on their cost and benefit __PUNCT__
in thi crisi __PUNCT__ as in all i mai face in the futur __PUNCT__ i will not allow dogma to overrid common sens __PUNCT__
when we commit taxpay dollar as assist __PUNCT__ it should be accompani by reform that ensur that we never face thi problem again __PUNCT__
central to those reform should be transpar and account __PUNCT__
homeown should be abl to understand easili the term and oblig of a mortgag __PUNCT__
in return __PUNCT__ thei have an oblig to provid truth financi inform and should be subject to penalti if thei do not __PUNCT__
lender who initi loan should be held account for the qualiti and perform of those loan and strict standard should be requir in the lend process __PUNCT__
we must have greater transpar in the lend process so that everi borrow know exactli what he is agre to and where everi lender is requir to meet the highest standard of ethic behavior __PUNCT__
polici should move toward ensur that homeown provid a respons down payment of equiti at the initi purchas of a home __PUNCT__
i therefor oppos reduc the down payment requir for fha mortgag and believ that __PUNCT__ as condit allow __PUNCT__ the down payment requir should be rais __PUNCT__
so mani homeown have found themselv ow more than their home is worth __PUNCT__ becaus mani never had much equiti in the hous to begin with __PUNCT__
when condit return to normal __PUNCT__ gse __PUNCT__ govern sponsor enterpris __PUNCT__ should never insur loan when the homeown clearli doe not have skin in the game __PUNCT__
in financi institut __PUNCT__ there is no substitut for adequ capit to serv as a buffer against loss __PUNCT__
our financi market approach should includ encourag increas capit in financi institut by remov regulatori __PUNCT__ account and tax impedi to rais capit __PUNCT__
i am prepar to examin new propos and evalu them base on these princip __PUNCT__
but i think we need to do two thing right awai __PUNCT__
first __PUNCT__ it is time to conven a meet of the nation account profession to discuss the current mark to market account system __PUNCT__
we ar wit an unpreced situat as bank and investor try to determin the appropri valu of the asset thei ar hold and there is widespread concern that thi approach is exacerb the credit crunch __PUNCT__
we should also conven a meet of the nation top mortgag lender __PUNCT__
work togeth __PUNCT__ thei should pledg to provid maximum support and help to their cash __PUNCT__ strap __PUNCT__ but credit worthi custom __PUNCT__
thei should pledg to do everyth possibl to keep famili in their home and busi grow __PUNCT__
recal that immedi after __DATE__ gener motor step in to provid __NUM__ percent financ as part of keep the economi grow __PUNCT__
we need a similar respons by the mortgag lender __PUNCT__
thei been ask the govern to help them out __PUNCT__
i now call upon them to help their custom __PUNCT__ and their nation out __PUNCT__
it time to help american famili __PUNCT__
more import than the event of the past is the promis of the futur __PUNCT__
the american economi is resili and divers __PUNCT__
even as financi troubl weigh upon it other part of the economi hold up or even continu to grow __PUNCT__
i have spoken at length in other set about the need to keep tax low on our famili __PUNCT__ entrepreneur __PUNCT__ and small busi __PUNCT__ to make the tax code simpler and fair by elimin the altern minimum tax that the middl class wa never intend to pai __PUNCT__ to improv the abil of our compani to compet by reduc our corpor tax rate __PUNCT__ which todai ar the second highest rate in the world __PUNCT__ to provid invest incent __PUNCT__ to control rise health care cost that threaten the budget of our busi and famili __PUNCT__ to improv educ and train program __PUNCT__ and to ensur our abil to sell to the __NUM__ percent of the world custom that lie outsid u. __PUNCT__ border __PUNCT__
these ar import step to strengthen the foundat of the million of busi small and larg that provid job for american worker __PUNCT__
there is no govern program or polici that is a substitut for a good job __PUNCT__
these step would also strengthen the u. __PUNCT__ dollar and help to control the rise cost of live that hurt our famili __PUNCT__
these ar import issu in thi campaign and the debat with my democrat rival __PUNCT__
but i will get my chanc to talk further anoth dai __PUNCT__
now i look forward to hear from our small busi owner __PUNCT__ the veri lifeblood of our economi __PUNCT__
