Well the federal bailout is not working as intended, as banks are keeping all those billions under their own mattresses or buying smaller banks instead of starting up the loan express to keep the economy running.
Since the Fed thinks this is okay, I have a box full of losing lottery tickets I would like to redeem. Should I send them to the Fed or Congress?
Meanwhile on main street companies are cutting back, folks are not spending like drunken sailors, and housing values continue to fall. Mortgages are a large part of the income picture across the economy, and producing payments is what keeps values up and lending continuing.
Foreclosures are up and will continue as the CDO/CDS market refuses to understand that exotic mortgage products may have looked good in the short term, the party is over, and the value of housing is cratering. Short term thinking about long term investments. Tracking down these folks who created this monster and issuing them a shopping cart and a cardboard sign is a first step toward making amends, but is only a first step. RICO indictments would be good too.
Toilet paper has more value and utility than the CDO/CDS market paper.
There have been reports that have put the blame on the crisis on outmoded computer modeling software. This is truer than most folks know. Companies resist change especially in the IT department. Building a house of cards on a house of cards always ends badly.
Foreclosure Relief
I guess that not every banker in the universe is as dumb as a box of rocks. JP Morgan has decided to stop foreclosures and rewrite loans to get them producing income. Gee why didn’t they think about this on Capitol Hill? Too fucking busy trying to distance themselves from their campaign contributors, and trying to get reelected.
There is good news here. Rewriting these mortgages will create a much stronger economy, and change the way that credit is rated as folks will make their payments. The house flippers will get strangled, and home ownership will stablize. Someday my house may be worth more than I paid for it.