If a business is of such importance to society that its downfall would bring about a downfall in a society at large... doesn't that mean said business should be propped up at least until a replacement can be constructed?

go socialism!

yeah and class-actions are a fact of life, I expect several dozen attys sprained their groins leaping to start them

who's to say your investment didn't lose half its value because of tortious conduct by the govt/FannieMae/FannieMac? A JURY

wonderful, US govt. now responsible for $11 trillion in mortgage debt.  GOVT doesn't know what its doing or what it wants, with Barney Frank cracking the whip we're all in trouble

Here's somethign to consider from examples in Latin America and Asia: a depression where the govt isn't committed over its head is always preferrable to a depression where the govt is already fully committed and needs influx of foriegn capital to survive

guess where we're headed.  Because we wanted to be SAFE

Sooner or later we are going to have a depression, and when we do, we're going to need a wheelbarrow to hold the cash that will buy a loaf of bread.

BW - I'm almost always against government bailouts, so there are probably better people to talk to about the macro effects of this with :-p  I might could limit myself to the simple "effects" and not go into what I think, but I was against the gov't lowering interest rates at the very onset of this whole shindig as well, so I'm fairly confident that I am about as biased as it gets... that said, at this point, it may truly be necessary to do this

Canadian Tire - you are right that this should have been prevented, but unfortunately, it's not months ago - it's years.  As everyone knows, mortgages were being given to (extremely) sub-prime borrowers, packaged, and sold away - under the misconception that "look, you're diversified, riskless!"  Because corporate, profit-taking America thought it had found a new paradigm - just like "oil will never go down, it is a limited resource" and "internet business must succeed - they have only half the bills to pay!"  For some reason, these high risk loans were being viewed as riskless... ridiculous.

However, what you're wrong about CT is the time frame in which this should have been fixed - there was no chance "months" ago - death was already afoot :-p  Years would be the proper terminology, that or it never should have been started :-p

Ill chime in.... now.

I believe its ok......and it goes against every anti-govt. bone in my body.

What needs to happen here, is the Govt. secure all those bad loans that the backed on Freddie and Sally.
These notes need to be extended out to 40 yrs if they must, drop the interest to 2% if they must, and lock these people into the houses they had no business buying.....BUT.... they must sign a contract.   The Contract will read, any capital gains made on the sale of this house in the future, is split 50/50 with the Govt....and its not a tax right off either.....or a credit to be attached to a new home.

problem is....this wont happen.  Because the Govt weenies dont care about solvency, they care about votes.
And the people that manage this will only care about moving bad notes into good notes.  In other words, as many late or almost defaulting notes that can be cleared off the ledger.....the better they look.   Since the Govt. will clear the note, they can default them, or just give a sweet heart deal to those on the border of defaulting.

Im sick about this.

1.  Because I remember the Schumer type Govt. ASSHOLES rolling out, and forcing the Bankers to offer bad loans, and saying Freddie will back them.

I want to know this....... Who signed off on this ??
Was it in a bill that the people had no clue about ??
Was it just he banking and finance committees of both Houses that crammed this into some hidden bill ??  Or were they able to allow the funding and the Executive,...Bush's Group just signed off on it ??

You see, this REEKS of Govt.....  It STINKS.  And Im pissed.
Because, in retrospect, it explains the runaway demand in the market, and is an example that should be studied.

The Lesson is.....when you let the Govt into the private business of any sector....they are bound to F it all up.

Thanks again to a bloated irresponsible Bureaucracy.

While WorldComm and Enron Executives rot in jail, ..... govt. Weenies who signed off on this will shrug and say....OH WELL.

You wont see any DEMANDS for A CONGRESSIONAL INVESTIGATION here...because CONGRESS is directly Responsible.
We can all thank the banking and finance committees of both houses for allowing this to happen.

"As Kramer refers to them, "the Bond Bullies"

good to know, i'm not the only one who listens to kramer

The common share holders  get trashed while the prefered share owners (China,Japan) get bailed out by the american tax payer.

haha

@ Yell,

Well, they are going to shut them down.
Just like the Savings and Loans got shut down.

You think the Govt. will get into the Mortgage game again ??
Doubt it.

Expensive lesson.....just how expensive ???

Hmmm.....

Have heavily considered setting up a fund diversifying across major currencies to protect the worth of their currency for small business and wealthy individuals for about a year now - if anyone's interested, just let me know :-p

"Years would be the proper terminology, that or it never should have been started"
- Figures. It would take the Media a year or two to seriously address a serious issue.

"because CONGRESS is directly Responsible."
- Well, the President had to sign the Bill as well. And while I agree with you (there's a first for everything ) that this will turn into one big [w00f!] up, and Taxpayers will likely lose ultimately 200 or 300B, with out this measure, the results in a years time could be a full blown depression. And as much as I don't like to admit it, if the US sank that low, half the western world would follow.

Yell, hopefully Freddie and Fannie will be killed off, and dissolved into 5 or 6 different companies, or possibility government run finical groups (:S). But you are right about one thing. No company (or such small number of companies) should be allowed to control that much of an economy. Everyone praises the free market for it's competition and how that benefits the consumer, but this is a wounderful example of how the free market has been abused and manipulated.