> RoMunn wrote: > pretty much the entire country is over-extended. Yeah, but when there's a problem with bad loans there's 2 solutions, right?
Either you bailout the lender, the borrower, or both. The problem right now, in a nutshell, is that no lender knows how sucky any borrower is, thus they have no confidence in their risk, thus they don't want to lend. To try to address this confidence problem the government is going to buy up the crap with the theory being that if lenders know the government is buying crap a borrower is less risky and therefore worthy of borrowing to. But. I'm guessing Dana would argue the other solution: fix the borrower. That is, since the core problem is bad loans on lenders books you fix the problem by fixing the bad loans; either by adjusting the principle, the interest rate or both. By keeping people in their homes you keep prices from falling and screwing more banks while at the same time giving people their nest egg and keeping ownership in society up. And since you've fixed the bad loans at the borrower, banks can feel confident that other potential borrowers won't have exposure any longer, thus won't be a risk, and thus they can lend to them. Obviously right now the government is selecting to bail out the Wall Street NOT Main Street. So how do we explain this for people claiming to care about Main Street? Because they all know that $700B will barely begin to cover the problem and they're hoping that the next tranche won't be needed until the next President is in office and thus removes the political volatility. Just my 2 cents, though. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:272450 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
