From my perspective this situation will get worse before it gets better, notwithstanding the $700G (that is "G" as in Giga, meaning billion) bailout currently proposed by the U.S. government. There are so many problems with the proposal that it is hard to enumerate them.
1. Nobody knows where the figure came from. Guessed at is probably how. The claim is that no one knows how to set a value on the bad mortgage securities, so how do we know how much money will be needed to buy them from the banks which invested in them ?
2. Who is going to make the decision on how to spend this money ?
3. Our government is already operating at a deficit, that is, it must already borrow money, so it then must enter the worldwide credit market and borrow this bailout money.
4. If it does not borrow this money, then it will only be printing money to cover it and I don't have to tell anyone how inflationary that is.
5. There is no provision for any executive pay caps for any bank or financial institution which gets some of this government handout.
6. There is no provision for any type of mortgage holiday or mortgage restructuring.
7. One of the causes of this whole mess is that housing values have fallen. The banks engaged in in shoddy or non existent criteria for granting mortgages, causing excessive demand for housing and driving housing valuations to unsustainable levels for anyone with a middle class income stream. Everyone knows that values can not go up indefinitely, especially at the rates of 25 % per year. The housing values are returning to more reasonable levels dictated by demand for housing. The bailout action by the government will not cause housing values to rise. Housing values will only stabilize and then begin to rise when the supply of houses and the ability of the consumers to purchase them return to an equilibrium state.
8. The other big elephant in the room is amount of credit card debt the big banks are carrying on their books. If their delinquency rates on this debt deteriorate due to further erosion in the consumers ability to service this debt there will be further cries of woe and even more huge losses by the banks.

President Bush was just on the radio warning of a "long and painful recession" if his proposed bailout plan is not enacted quickly by Congress. If he had any guts he would have warned of the dreaded "D" word, Depression. The Congress must act quickly, but do so with the proper controls in place and the money properly targeted and there must be strong oversight. There must be provisions for the willing but unable to pay to restructure their mortgages to levels which reflect the true value of the underlying asset value of the principal domicile. There must also be an enforcement of prudent banking practices enforced by regulators who are not afraid to do their jobs.

I trust it will get better, but not real soon.

Cheers

!!!!!!!!!!!!!!!Congratulations Team!!!!!!!!!!!!!!!!!!!!!!

We have broken the 100,000,000 mark.

!!!!!!!!!!!!!Woot !!!!!!!!!!!!!!!!!!!!!!!!!!Woot!!!!!!!!!!!!!!!!!!!!

-= Together =-

http://www.youtube.com/watch?v=dss4GyoUdO8