You're tryin to be funny, I hope. AC has about as much financial savvy as a Barbie Doll, but with more botox and tighter skirts.

I think we are have a serious, America-as-we-know-it decision here: Capitalists or Non-Capitalists. As much as it pains me to say (and experience) I would rather see a full collapse and rebuild rather than a patch-it-up-and-see-what-happens. An economic collapse in the USA would deeply alter how we “do business”. Some will argue that we may not be able to get back if there is a full collapse. I say I DON'T WANT TO GO BACK. I want a new and improved capitalist structure. Make our governmental leaders earn that paycheck for once.

I have zero faith in this proposed bailout/whatever.

http://www.whitehouse.gov/news/releases/2008/09…

Right now I think I'm most on board with Gingrich and Pence: handle the valuation process by changing the mark to market process (instead of as Treasury suggests is necessary, have the govt act as a buyer and setting up auctions to determine value.) The crisis of valuation is mainly on paper and the mark to market can be adjusted to solve that problem (I think Gingrich suggests a three year rolling average, which seems reasonable.) Along with that, they're suggesting a zero capital gains tax (Pence says temporarily) to get quick influx of private capital to buy the distressed properties once they're revalued. Then also put massive effort into energy plan to stop the hemmorhaging of capital that we're experiencing from oil purchases abroad.

That seems like the rational conservative fix for the problem- along with some of the regulation reforms I suggested above to stop future problems.

BUT why not help from the bottom up? Rework the loans and assist those in foreclosure to keep their houses? I'm not talking about cases where the owners have no chance of keeping their payments current– just those who are on the brink-

That's got to be the first time I've ever heard that here. But if Coulter and Clinton are on the same page on anything then perhaps the world is about to end.

“Bill Clinton on Thursday told ABC's Chris Cuomo that Democrats for years have been “resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac” (video available here, relevant section at 2:45).”

But I think you continue to underestimate the degree to which the subprime mortgage problem was the catalyst for the meltdown. The toxic assets being held are right at the middle of all of this, and those assets are illiquid because there's no way to value something that no one wants to buy. The private companies affected by this are involved because of Fannie/Freddie subprime lending programs- the subprime mortgages were then bundled into bond like instruments which were traded by the other financial institutions that you mention.

Perhaps the point could be made that those instruments should never have been created, that this would have been a point at which regulation should have been applied- but no one from either party ever spoke out against them to my knowledge. And despite the public perception that Wall Street is tight with Republicans, the truth is that the Wall Street firms always back a winner and that means recently they've been major financial supporters of high ranking Democrats.

Another area that needs to be investigated is the rating agencies; there appears to have been some very shady bundling of the 'tranches' and the method of rating them, which obscured the actual risk. Again though, I don't recall anyone ever speaking of need for that specific reform.

In other words, your claim that the Dems favor regulation and GOP resists is a vast oversimplification and that partisan spin will prevent us from ever shining the light of day on who contributed to this mess.

BTW though, TSteel is right about the high rollers who bought houses with some of these loan instruments. From what I understand though, the minority lending concerns were the initial impetus for pushing for these subprime loans (and zero down, interest only, etc) and then that left a loophole for those who didn't fit into the minority or low income category to exploit. Again, the fact that it was being exploited was never a complaint until now, when all of the Monday morning quarterbacks are noting it and pointing fingers.

http://newsbusters.org/blogs/noel-sheppard/2008…

http://www.anncoulter.com/

That is precisely my point- consumers have been encouraged to get over their heads in debt — then derided for doing so. Bad judgment all around.

And my biggest problem is that requiring regulation only of entities that require backup from the govt seems inadequate—we see in this bailout that private entities will benefit from tax payer monies as well.

Just had to break the “not mentioned yet” streak, DLS.

That being said, there were not problems with bad loans shortly after the Act was passed. What we saw instead were in two cases, institutions exploiting deregulation (S&Ls in 1980s, other institutions in 1990s and 2000s, particularly during the housing bubble of recent years, with easy credit). The housing bubble compounded this (inducing more bad borrowers to take loans they could not repay). Both financial disasters coalesced and became public disasters during Bush presidencies, incidentally.

What we see proposed now by the Democrats is the morally and financially wrong thing to do: effectively provide federal support to squatters, letting homeowners stay in homes when they face foreclosure, demands for mortgage interest freezes (this is Third World dictatorial as well as far-left crazy advocacy, and obliges the federal government to repay the difference plus penalties to compensate the lenders for the “taking” and for interfering with contracts), and similar nonsense.

If the federal government takes over actual properties, the homes should of course be foreclosed (occupants evicted) and the homes refurbished and improved before being sold later at a profit.