No one has the details but the analysts have it all it figured out; or at least they want you to think they do. In fact, the economic collapse that was averted or perhaps delayed was too close for comfort. Now that the government has announced it will bail us all out, perhaps we need to review what got us here.
In the first place, the sheer numbers of the dollars involved is nearly impossible to understand. There have been attempts by comparing the number of dollars laid on top each other would go to the moon and back or something silly like that but even that is not adequate so we will come at it from a different direction.
We have seen one financial institution buying out another which usually means a company which is stronger is buying the weaker company and in turn taking on the weaker company's problems. So the government stepping into the problem this past weekend was a realization that is was the only institution that could take over and hopefully survive as it took the problems of the institution as its own. It is pretty scary stuff as the buyout will be difficult for the government to move on for some time. The obligation our government is assuming on our behalf is absolutely huge.
It is difficult to grasp how many mortgages are going broke at least for me. Living in the Midwest, there are not huge mortgage problems. Sure there are some houses that left unsold; there are talks of people struggling financially but nothing like the level of failed mortgages that could bring down so many companies. So, we cannot understand the depth of it all but we need to have some kind of handle on this.
All of what we thought was done correctly is now seen as false. The rating method to judge the quality of mortgages was a farce. It was filled with payoffs and self serving payments for short term profit. There was no concept of right or wrong except that those doing wrong knew it was wrong since their actions worked to avoid detection. However, all wrong is at sometime revealed. That time for the mortgage fraud is now.
There is no easy solution. Our government is trying to get us past it but we do not know if the proposed solution by the Bush administration will work and if it will even become law. There are many changes coming to us and the changes will come before we even know how close to economic failure or how severe our situation had become. There is a lot of learn and we need to pay attention. We need to better informed so read and try to understand what is happening.
I do not have a solution. I only have more questions and hope those in power will do what is in our best interest.
