fche: what rskrishnan said.

Washington tends to bail out the banks first, the homeowners second - after all the financial sector has among the biggest lobbys. The noises of bailouts to homeowners tend to remain noisy, with very little real signal in them. Talks about an interest rate freeze are just words, and with the worst yet to come (in 3-4 years when the rest of the iceberg comes up).

Any concrete piece of news you see/hear is about Bank xxx being bailed out by some “pooled fund”.

And it’s not just the USA … UK just bailed out one of their banks by “nationalizing” it. It might be a prudent move but I suspect there was a bit of “Oh Mommy it’s raining, and my feet got wet” as well!

I would vote for a bank bail out with some punitive elements thrown in to discourage future speculation. Right now there is no downside to reckless investment for the banks, and they keep any upside that shows up. The fall in stock prices don’t actually affect the bank, or it’s ceo/coo/cfo/investment policies - since the stock price is reaction to a fait accompli of sorts - the deal is already done.

Ah well … maybe I should run out and start a bank for geeks!

Really? All the recent bailout noises from Washington were about letting (some of?) these troubled (”can’t pay”) homeowners keep their homes. (The Federal Reserve is doing stuff to help banks, but that’s a separate matter.)

(Again, it’s not necessarily a bad idea to bail out the banks, but it should ideally be done in a way which discourages them from acting this way in the future. So far that is not happening.)

That effect must be even more unintended than the encouragement of risky behaviour by uncreditworthy consumers, who after all purchased these credit/property products.