http://www.bloomberg.com/apps/news?pid=20601109&sid=aGvwttDayiiM&refer=home

So I'm gonna be interviewing Paulson on Monday if anyone has any good questions to ask :)

What a crock of shit, I'm totally feeling that we're getting raked over the coals on this one. I'm no conspiracy theorist, but you have to wonder if Bush and Co had this in mind all along - one last way to stick it to us before leaving office.

So I'm gonna be interviewing Paulson on Monday if anyone has any good questions to ask :)


I would ask him: If as you explained in the beginning and have stated many times since, the root of the problem is the housing crisis. Why not place a moratorium on foreclosures and get all of these defaulted and soon to be defaulting mortgages renegotiated to affordable levels which would create a steady cash flow to the banks. Instead of throwing more and more cash at, well, you won't even tell us who?

I just want to know who's brilliant idea it was to give the banks a bailout when they are the ones who got us into this situation in the first place. How does that help the end consumer in any way?

Would it not be more beneficial to the people and economy as a whole instead of bailing out huge corporations where employees have ridiculously high salaries, and actually help the average tax payer whom is the one feeling the pinch the most? I would have much rather seen these funds allocated evenly across each tax paying family - that would have equated to roughly every eligible household receiving about $250k ....... what would YOU do with $250k? Hmm let me see... I know myself personally, along with many other, would pay off their mortgages. So, what would that do? Well, that would put the money right back into the banks anyway which would achieve what the government tried anyway, and also free up these households to have more free cash to disperse back into the economy. Another positive - I think so!

Something tells me that auto-sales would pick back up also... I dunno, thats just a hunch. But considering I owe about 130k on my house... and if I got 250k ... do the math. Mommy and Daddy would most likely both have new vehicles as well - and some new clothes... and etc etc.

Sometimes the logic our government uses, just baffles me.

yeah Im with immort give the money to the people not these banks and in other news regarding the Rescued borrows ~~

Many modified mortgages in 2008 defaulted in 6 months, a top federal regulator says. A new study raises concerns over the quality of such loan adjustments.

WASHINGTON, D.C. -- More than half of delinquent homeowners whose mortgages were modified earlier this year ended up redefaulting within six months, a top bank regulator said Monday.

Some 53% of borrowers with loans modified in the first three months of 2008 and 51% of those with loans modified in the second quarter could not keep up with payments within six months, according to U.S. Comptroller John Dugan, who spoke at a housing conference.

The report, which will be released in full next week, covers nearly 35 million loans worth a total of $6 trillion - or 60% of all primary mortgages in the United States.

The high redefault rate raises concerns about the long-term effectiveness of loan modifications, which many are pushing as a key solution to the nation's financial crisis.

A record 1.35 million homes are in foreclosure, while the number of borrowers who have fallen behind on their payments soared to a record 6.99%, the Mortgage Bankers Association said last week.

Meanwhile, 1.7 million homeowners have been helped in 2008 through the Hope Now Alliance, a coalition of lenders, servicers, investors and counselors working with delinquent borrowers on modifications and repayment plans.

Dugan said the Office of the Comptroller of the Currency is asking servicers for more details on the loans in his report to determine what went wrong. He wants to know whether the modifications reduced the monthly payments to affordable levels or whether the borrowers had too much other debt to keep their head above water.

"These answers are important, because they have important ramifications for the foreclosure crisis and how policymakers should address loan modifications, as they surely will in the coming weeks and months," Dugan said.

Other regulators speaking at the conference questioned the quality of the loan modifications, saying that early efforts to restructure loans were not very effective. Many simply tacked on the missed payments and penalties to the end of the loan.

"The quality of the modifications are not what they should be," said FDIC Chairwoman Sheila Bair, a vocal proponent of adjusting loans by reducing interest rates, extending loan terms and deferring principal. Also, verifying income is very important.

Modifications that include an interest rate reduction have a 15% redefault rate, said Bair, citing a recent Credit Suisse study.

Last month, Bair unveiled a plan to address the foreclosure crisis by modifying loans to as low as 31% of a borrower's gross monthly income. This could be done by setting interest rates to as low as 3% or extending loan terms to 40 years. Principal could also be deferred free of interest to the end of the loan.

To entice servicers and investors to participate, Bair's plan calls for the government would share up to 50% of losses should the loan redefault. But that guarantee only kicks in after the borrower has made six monthly payments to better ensure the mortgage modification is sustainable long-term. It would cost $24.4 billion, which Bair has said could come from the rescue funds.

Bair's efforts have been widely praised, but the Bush administration has yet to act on it.

As the housing crisis continues to spin out of control, lawmakers, economists and community activists are increasingly demanding that financial institutions and the Bush administration do more to help homeowners by modifying loans to affordable monthly payments.

In recent months, banks and federal agencies such as the Federal Deposit Insurance Corp. and Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) have stepped up efforts to adjust loans so that payments are no more than 38% of a borrower's monthly income.

Rep. Barney Frank, D-Mass, who heads the powerful House Financial Services Committee, said Monday that Congress will not give the Bush administration the $350 billion left in the $700 billion financial system bailout package unless loan modifications are part of the plan.

However, other regulators said that federal money may be better spent on economic stimulus and job creation since a growing number of foreclosures are caused by unemployment. In those cases, loan modifications won't help.

The unemployment rate soared to 6.7% and is expected to go higher with companies announcing massive downsizings almost daily.

"I have to wonder whether or not focusing on job creation..is a better way to focus federal dollars than on a loan modification process that may be only partially effective," said John Reich, director of the Office of Thrift Supervision.

If i understand economic right, and Malse and the smart people crew will correct me if i dont, you cant flood the consumer market with all that cash.

It would break the system. For example, people would all go out and by the beautiful 50 something inch samsung 7 series TV. Since the demand was so high the prices would start to raise and they would become more and more expensive, basically leading to inflation.

Cars for example, the Dodge Dakota i want to buy in two weeks I am getting for DIRT!! because no one wants trucks and SUV's, but flood the market and boom cars all go back up to inflated prices, in effect putting people back where we are now, lots of wants not enough cash to get them.

Same with houses, you give everyone 250k a LARGE chunck are going to get a house and pay for it cash so it wont help the banks at all. I live in an apartment, in Winter Haven for 150k i can get a 2800-3000 sqft house and then have 100k to furnish it. No bank sees my money.

Most of those whose mortgages were modified defaulted due to job loss. The whole thing has turned into a huge clusterfuck. It has become the norm to sell layoffs as efficiency, it is a ridiculous notion.

If i understand economic right, and Malse and the smart people crew will correct me if i dont, you cant flood the consumer market with all that cash.

It would break the system. For example, people would all go out and by the beautiful 50 something inch samsung 7 series TV. Since the demand was so high the prices would start to raise and they would become more and more expensive, basically leading to inflation.

Cars for example, the Dodge Dakota i want to buy in two weeks I am getting for DIRT!! because no one wants trucks and SUV's, but flood the market and boom cars all go back up to inflated prices, in effect putting people back where we are now, lots of wants not enough cash to get them.

Same with houses, you give everyone 250k a LARGE chunck are going to get a house and pay for it cash so it wont help the banks at all. I live in an apartment, in Winter Haven for 150k i can get a 2800-3000 sqft house and then have 100k to furnish it. No bank sees my money.

An aside, why not think about not getting that new Dakota and get the house instead? You probably shell out as much on rent payments as you would on a mortgage, and with mortgage rates well on their way to 4.5% interest you probably won't see an opportunity like this for a few decades.
I was able to get a 4 BR 3.5 Bath house outside of DC for less a month than a 3 BR apartment would rent for, a huge tax write-off (all the interest paid on my mortgage), and I'm building equity and personal wealth while the Dakota will depreciate in value the minute you drive it off the lot.

So I'm gonna be interviewing Paulson on Monday if anyone has any good questions to ask :)
Question 1: How many of the recipients of bailout money are giving out employee bonuses this year? (I've heard that $70B of the bailout money is going out as bonuses this year)

Question 2: The Fed has been approaching folks in DC trying to get approval of some sort to issue their own debt directly, bypassing Treasury completely.
Bloomberg story (http://www.bloomberg.com/apps/news?pid=20601103&sid=am8eBgidYgsI&refer=us)
some commentary on this (http://www.marginalrevolution.com/marginalrevolution/2008/12/financial-innov.html)

Question 3: TARP has been used to purchase bonds and other financial instruments from banks that are effectively worthless (some were trading for 9 cents on the dollar) at par value. Why not purchase GM and Chrysler bonds? Some of the GM bonds are trading with an effective yield of 30%, some at nearly 60% (http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ5ckc2seT.g=).

What a crock of shit, I'm totally feeling that we're getting raked over the coals on this one. I'm no conspiracy theorist, but you have to wonder if Bush and Co had this in mind all along - one last way to stick it to us before leaving office. Naomi Klein has been writing about this in Shock Doctrine. Effectively, the right wing disasternauts wait for times when there are economic shocks and that they swoop in and fuck up economic systems for their own benefit. One early version of this was her article in Harpers called Baghdad year zero: Pillaging Iraq in pursuit of a neocon utopia (http://www.harpers.org/archive/2004/09/0080197)
The honey theory of Iraqi reconstruction stems from the most cherished belief of the war's ideological architects: that greed is good. Not good just for them and their friends but good for humanity, and certainly good for Iraqis. Greed creates profit, which creates growth, which creates jobs and products and services and everything else anyone could possibly need or want. The role of good government, then, is to create the optimal conditions for corporations to pursue their bottomless greed, so that they in turn can meet the needs of the society. The problem is that governments, even neoconservative governments, rarely get the chance to prove their sacred theory right: despite their enormous ideological advances, even George Bush's Republicans are, in their own minds, perennially sabotaged by meddling Democrats, intractable unions, and alarmist environmentalists.

Iraq was going to change all that. In one place on Earth, the theory would finally be put into practice in its most perfect and uncompromised form. A country of 25 million would not be rebuilt as it was before the war; it would be erased, disappeared. In its place would spring forth a gleaming showroom for laissez-faire economics, a utopia such as the world had never seen. Every policy that liberates multinational corporations to pursue their quest for profit would be put into place: a shrunken state, a flexible workforce, open borders, minimal taxes, no tariffs, no ownership restrictions. The people of Iraq would, of course, have to endure some short-term pain: assets, previously owned by the state, would have to be given up to create new opportunities for growth and investment. Jobs would have to be lost and, as foreign products flooded across the border, local businesses and family farms would, unfortunately, be unable to compete. But to the authors of this plan, these would be small prices to pay for the economic boom that would surely explode once the proper conditions were in place, a boom so powerful the country would practically rebuild itself.

The fact that the boom never came and Iraq continues to tremble under explosions of a very different sort should never be blamed on the absence of a plan. Rather, the blame rests with the plan itself, and the extraordinarily violent ideology upon which it is based.

Torturers believe that when electrical shocks are applied to various parts of the body simultaneously subjects are rendered so confused about where the pain is coming from that they become incapable of resistance. A declassified CIA “Counterintelligence Interrogation” manual from 1963 describes how a trauma inflicted on prisoners opens up “an interval—which may be extremely brief—of suspended animation, a kind of psychological shock or paralysis. . . . [A]t this moment the source is far more open to suggestion, far likelier to comply.” A similar theory applies to economic shock therapy, or “shock treatment,” the ugly term used to describe the rapid implementation of free-market reforms imposed on Chile in the wake of General Augusto Pinochet's coup. The theory is that if painful economic “adjustments” are brought in rapidly and in the aftermath of a seismic social disruption like a war, a coup, or a government collapse, the population will be so stunned, and so preoccupied with the daily pressures of survival, that it too will go into suspended animation, unable to resist. As Pinochet's finance minister, Admiral Lorenzo Gotuzzo, declared, “The dog's tail must be cut off in one chop.”

That, in essence, was the working thesis in Iraq, and in keeping with the belief that private companies are more suited than governments for virtually every task, the White House decided to privatize the task of privatizing Iraq's state-dominated economy. Two months before the war began, USAID began drafting a work order, to be handed out to a private company, to oversee Iraq's “transition to a sustainable market-driven economic system.” The document states that the winning company (which turned out to be the KPMG offshoot Bearing Point) will take “appropriate advantage of the unique opportunity for rapid progress in this area presented by the current configuration of political circumstances.” Which is precisely what happened.

Sadly, the interview tomorrow is for a documentary unrelated to the financial mess we are in ... and I bet if any of the above questions are asked the black button will be pressed and we're going to be escorted out of the Treasury rapidly.

Correct me if I am wrong but is this bail out structured more towards unfreezing the credit bind through injected liquidity so that banks will lend to businesses and other banks in order to encourage growth or perhaps just stay afloat? All the bad paper from failed mortgages sucked it up or at least that's what has been circulating as a theory. Granted it would be great to cut homeowners a break to defer foreclosure so they can at least unload their properties or figure out some solution to keeping their homes, but this seems more like an effort to keep the whole economy from coming to a grinding halt. You can't pay the mortgage if your job is lost or your business belly's up.

Also, how many people got these homes knowing full well that it was way beyond their means? Granted the banks lured them in, but still. Homeowners and consumers as a whole share the blame with the banks by not practicing lending and spending that was sustainable. Yes, buying out homeowners might get rid of some of the bad paper, but then again has the damage already been done to the point where the banks will fold before they figure out how to qualify people for a.....shooting in the dark here on the amount.....$250k voucher? The government loves its red tape and maybe processing it for several hundred banks might plug the dam faster than figuring out how to qualify millions of consumers. There would have to be a whole bureaucracy formed just to handle it, and all the ugliness that comes with it. Even after all that, most of the property is now worth far less than the amount signed for and the government is not looking to be left holding the bag. They are viewing this as an investment and expect their money back in addition to being able to apply ALOT of leverage over some very powerful people. This is just like the Detroit bailout. Pick which is the lesser of the two evils and then run fast and hard. The evil does not need to have a name or face, as long as the problems get addressed, even if it means granting clemency to those individuals that got us in this mess to start with.

As far as the difference between the bank bailout and auto bailout, they are different things completely. It doesn't seem "fair", but they really aren't apples and apples.

$14 billion spendable dollars that flow into the economy is completely different than what they're trying to do with these massive derivatives in the financial sector. All the people you see who make direct comparisons between the numbers simply do not understand our monetary system (and most don't).

As far as Paulson, what are you supposed to ask him if you can't talk about anything that's been going on since he joined the administration? "Do you miss Goldman Sachs?"

Maybe it's borderline, but how about asking him why the Treasury doesn't issue paper money anymore. With our debt soaring (for decades, not tied to current events), why in the world does the Treasury prostrate itself to the FED and allow our money to continue being created exclusively through debt?

This is the last guy (http://www.presidency.ucsb.edu/ws/index.php?pid=59049&st=&st1=) that had sack enough to go up against the FED.

This is the last guy (http://www.presidency.ucsb.edu/ws/index.php?pid=59049&st=&st1=) that had sack enough to go up against the FED.

Yes, and amazingly enough a sniper, using a very inaccurate rifle with a loose scope who was also barely able to qualify on a rifle range, shot him 3 times while he was in a car moving down a road at a pretty good distance away.

Correct me if I am wrong but is this bail out structured more towards unfreezing the credit bind through injected liquidity so that banks will lend to businesses and other banks in order to encourage growth or perhaps just stay afloat? All the bad paper from failed mortgages sucked it up or at least that's what has been circulating as a theory. Granted it would be great to cut homeowners a break to defer foreclosure so they can at least unload their properties or figure out some solution to keeping their homes, but this seems more like an effort to keep the whole economy from coming to a grinding halt. You can't pay the mortgage if your job is lost or your business belly's up.

Also, how many people got these homes knowing full well that it was way beyond their means? Granted the banks lured them in, but still. Homeowners and consumers as a whole share the blame with the banks by not practicing lending and spending that was sustainable. Yes, buying out homeowners might get rid of some of the bad paper, but then again has the damage already been done to the point where the banks will fold before they figure out how to qualify people for a.....shooting in the dark here on the amount.....$250k voucher? The government loves its red tape and maybe processing it for several hundred banks might plug the dam faster than figuring out how to qualify millions of consumers. There would have to be a whole bureaucracy formed just to handle it, and all the ugliness that comes with it. Even after all that, most of the property is now worth far less than the amount signed for and the government is not looking to be left holding the bag. They are viewing this as an investment and expect their money back in addition to being able to apply ALOT of leverage over some very powerful people. This is just like the Detroit bailout. Pick which is the lesser of the two evils and then run fast and hard. The evil does not need to have a name or face, as long as the problems get addressed, even if it means granting clemency to those individuals that got us in this mess to start with.


Believe me, everything that was done by these guys on wall st and the banks was done quite intentionally. They knew what they were doing, it was a huge ponzi scheme. Think about the run-up to this. Bankruptcy laws change to favor the creditor, not to get the debtor back on track. Things like that.

People have hope, their hopes were prayed upon by these bankers. To lay blame on the homeowners is just wrong.

It would break the system. For example, people would all go out and by the beautiful 50 something inch samsung 7 series TV. Since the demand was so high the prices would start to raise and they would become more and more expensive, basically leading to inflation.


... what?

Please pass what you are on. It sounds awesome.



what would YOU do with $250k? Hmm let me see.

The basic problem with this premise is that you're borrowing X money, putting it through an inefficient (economic term, not normal english) distribution system and then having to pay it back plus interest and costs of implementation next tax cycle.

That being said this is actually probably a better idea than what is actually happening.



The basic run-down of all this can be summarized in the housing market. The problem is not specifically that people are defaulting loans, that's a result. The problem is that houses are overvalued to the point that people can not afford them without taking impossible debt instruments. Plugging money in at the consumer end to try to make the lending solvent again is ultimately only prolonging the problem. What really needs to happen is a re-grounding of the financial sector to something, anything, in the real world. Good luck with that in the current atmosphere. We're in a for a long haul on this one.

I do find it amusing that Smidget referenced the Shock Doctrine and specifically Bagdad: Year Zero (almost as good as a Frank Miller novella!) since that is probably the single best illustration of these clown's mindset. You are dealing with people who really believe this stuff, and facts and figures don't get in the way. They been trying disaster economics since the 70s and the failures only make them more fervent that they can get it right next time. Only recently has this string of ideological calamities hit our own shores, South America and Africa are all to familiar with this particular sacrificial altar.

Sadly, the interview tomorrow is for a documentary unrelated to the financial mess we are in ... and I bet if any of the above questions are asked the black button will be pressed and we're going to be escorted out of the Treasury rapidly.


Heh...I know it's just me, but I say ambush the motherfucker and tape it...watch him squirm and then walk out while they escort you out. Be a Hero!

That used to be possible, but since Bush's second year a black box with a button on it is put between my mixers and the microphone(s). Whenever the handler wants they press the button which cuts the audio.

To lay blame on the homeowners is just wrong

No I can't really lay blame on all homeowners. Some actually did buy the home to raise their families in and then enjoy their golden years after. But, who is to qualify them vs. the speculators who bought property just to flip it a few years later.....without even bothering to move in furniture? And what did the market do after that, when speculation inflated a huge bubble to the point no sane person would keep on considering a home purchase? They offered ways to keep the Ponzi pyramid soaring ever higher and people kept buying into it to keep demand high and prices soaring. Someone has to be left with goods when everyone has cashed out and why not the tax payer? Now we have this huge glut of homes, some shoddily built, dragging down the market in a manner that actually reflects supply(massive) and demand(only for those that can pay with cash). Honestly it might be better to just let the whole damn house of cards come crashing to the ground and learn some hard lessons for EVERYONE. The investor. The government. The banks. Take a risk and sometimes they blow up in your face and drag down the whole goddamn planet with you. Live within your means might actually be driven home.

In a "fair is fair" senario, The banks that were crooked fail. The ones that were not survive. The businesses that pumped out shit fail. The ones that didn't survive. The potential homeowner that makes 30k a year who should have bought a simple modest dwelling ( Like a trailer in a decent park) but qualified on a McMansion and bought it probably also deserves to sink, along with all the people who make practicually no income but buy those 50" TV sets and brand new furniture to fill up the house they can't hope to afford. Just because you have the credit extended do you have to use it? Probably the one thing that is keeping any thought of just letting it all come crashing down is that if it does, the regions of the world with the most money to spend, which is the Middle East and to a lesser degree China, will buy everything up at fire sale prices. Given any feeding frenzy on the carcass of the USA will drive up land prices again and for the short term the global economic engine will have stalled out and thus hobble China's and the Middle East's cash cows,do we really want to entertain the thoughts of our rivals winning that way? These are nations that do not have natural resources of their own other than short term solutions. It would be very easy for them to obtain them after a total economic colapse and then dominate the world's economy and culture when they extend the hand to rebuild the world's finances. It makes 9/11 seem like a gnat fart if in the end our whole nation belongs to Dubai. It makes you wonder, if more than 50% of a country's land is purchased by foriegn nations....do you even have a country anymore? Its a small world, but there is still room enough for nations to fuck each other over without too much concern that the ripples of doing so won't endure so long as to be impossible to over come. So yah, the homeowner who got screwed is NOT going to get much attention, because its probably not what the government and big business is really worried about.

So yah, the homeowner who got screwed is NOT going to get much attention, because its probably not what the government and big business is really worried about.


It's not what the politicians or corporations want, but I think what you are going to start to see is that there is becoming a separation between "the government" and politicians.

All in all our government is good, the employees of the different departments are, for the most part, very dedicated to their jobs. It really isn't these people that failed us, it is the politicians and their appointees that did and the corporate culture that did. I really hope that Obama is a different kind of politician one that actually knows he is serving us not the fortune 100.

You are already seeing small incidents of revolt amongst the people, the factory in Illinois, the bank bombing in Seattle (forgot exactly where) and rest assured there will be others. This has the potential to get out of hand really fast if these guys decide to take the payoffs and try to do business as usual.

None of this collapse happened by accident, if it did we have some serious idiots in power both corporate and political.

On a side note, if you can watch Jon Stewart interview Mike Huckabee it was great, he pinned Huckabee to the wall on everything from the gay marriage issue to the "privatize everything". Huckabee was droning on about how government can't handle health care and welfare and running a business...From memory he said to Huckabee...so you trust the government with tanks, bombs, nuclear weapons but you don't trust them to hand out cheese to poor people? Huckabee was stumped.

I would have much rather seen these funds allocated evenly across each tax paying family - that would have equated to roughly every eligible household receiving about $250k .......

I think this was discussed before, and it works out to $2500 per household. I think there was some faulty math at work...

I think this was discussed before, and it works out to $2500 per household. I think there was some faulty math at work...

No, it worked out to $2500 per person, household is a different number.

Whoops, my mistake, then.

Seems like this would be a better way of going about doing things. I mean sure, there would be people that would go out and buy something stupid, like a yacht with the money. But I think enought of it would get back to the banks and automakers to make it worthwhile.

Some interesting insight:

http://en.wikipedia.org/wiki/Mortgage-backed_securityThe use of these really took off during the Clinton era, when banks used to refuse to grant a mortgage to certain demographic locations. There was a lawsuit based upon "discrimination towards minorities" because mainly the banks would not lend to inner city residents in bad neighborhoods because there was a huge risk of default and the properties went nowhere in building equity. After the fallout of the lawsuit, the risky mortgages from the inner city would be pegged to 2 solid ones and thus the MBS would be created. Fanny and Freddy were big players in this. As long as the other 2 mortgages were bringing in their payments on properties building good equity, the risky one in the event of a default would not be enough for the security to fail to gain value. The problem was if 2 or more or all mortgages defaulted or that home values greatly erroded in value, such as recent events, and you had built entire investment funds based on all these. At the time of their wide spread use during the Clinton years people were raking in piles of cash from them. A housing boom (and bubble) made even MORE of these MBS to trade and make even more money in addtion to the good times the construction industry was enjoying as well as consumer goods vendors and manufacturers. Our whole US economy for the past ten years was based on this as long as there was positive equity somewhere. Cashing out equity on housing really was all we had. Widespread negative equity resulted in massive losses for those that didn't see the writing on the wall and could not move their portfolio's MBS till in time. So it was not just the people who sold the bad subprime loans that got bit. It was also those who traded in the MBS's they created to hedge them.

Considering some of the mortgages were second or even third mortgages in order to buy additional properties or pay for 50" TV sets, there really was a flood of these. Some states like Florida...which got hit really hard when the bubble burst, can't evict you from your "Primary Residence" when you default, so if people speculated on 2-3 homes but still had a primary residence to fall back on. They would just allow all these speculation properties to default knowing full well they still would have a roof over their heads. The MBS's these mortgages were pegged to then tank hard, because these were not the ghetto properties. These were the high dollar lots from the good neighborhoods in the 'Burbs and the expensive down town high rise condos.

So couple the loss of the hedge, investment, and retirement funds as well as the loss of business created by consumer goods associated with home ownership, brokerage, construction and the huge loss of jobs now along with no credit, you get Great Depression 2.0. Bush is Herbert Hoover 2.0 as well too, since Bush is doing about the same thing that Hoover did back then, which was try to get liquidity back into the banks so that people will have restored faith in the banking system. What is interesting is that the money being loaned by the government is being created based on the faith that A) they will draw a dividend on future profits and B) their efforts will create enough tax revenue to offset the big layout down the road. If it fails our government stands a very good chance of complete financial collapse. Soldiers would go unpaid. No more Medicare and Welfare. No more federal matching funds for education. No more federal money for roads and law enforcement programs. The dollar would tank hard which would probably lead to inflation spiralling out of control. Just plain scary shit.

So that is pretty much why they can't just hand out a check to consumers. The government has to make its money back....with a good profit, for the bail out to even work. Which means its almost important that they have the same crooks that wrang money out of the global economy wring more money out somehow. Otherwise we all have to just sit tight and wait for the glut of homes sitting as unwanted inventory finally sell, which might take quite a while since there is more housing than there are people to fill it so either we all need to start pumping out babies or hope for alot of immigrants that can afford to buy a house. Also, people don't buy homes when they don't have a job. Nor do they have more kids. Nor do they immigrate to countries whose economy is in the shitter. Something else has to jump start the economy, be it new industry, infrastructure construction etc etc in order to create jobs.