The bailout, which was rushed through Congress, hasn’t helped the markets.  I was against the bailout until I saw the panic caused by NOT passing the bailout.  After it started through the Senate, it looked to me like Wall Street was holding Congress hostage, threatening to pull the rug out from under them if it didn’t pass.  And the tide of American voter turned to support.  That’s when my mind was changed to be against it again. 

Over the weekend, Fox News and 60 Minutes did great pieces on how we got to this point.  It was difficult to understand, but the problem was two-fold.  People like Obama, working with ACORN, and Congress basically threatened banks with the blockage of mergers and other means of business if they didn’t make loans to more minorities.  In order for this to happen, they were forced to make risky loans to lower or no income people who would never be able to pay back the loans.  Democrats in Congress looked the other way because they were being paid off and it was a goal of more homeownership.  Republicans didn’t want to seem racist, so they balked but really never did anything about it.

The other half of the loan side involved speculators just hoping to make a buck by flipping a house, so they took out interest-only or balloon-payment loans.  With more people going in, housing starts go up, and prices skyrocket.

Wall Street saw what was happening on Main Street and decided to make a buck off of it.  With the help of Fannie and Freddie, mortgage backed securities including these risky loans were sold all over the place like hot potatoes.  Along with that, Wall Street came up with a scheme of getting these sold by selling “insurance” along side of them.  But, it was called a “swap” instead, sidestepping regulations that required the money be available by the insuring institution to pay it off. 

So, once interest rates started rising on ARMs and payments for the speculators were getting high, people started selling.  Housing prices fell, and people started defaulting.  The swaps were called in, and the swap companies started defaulting on those payments.  The banks, the insurance companies, and the investment houses who all held these investments weren’t getting paid anymore.  They started failing one by one.  All the foreign banks holding these started failing, too.  Banks couldn’t lend out money because they didn’t have it or didn’t trust borrowers.  Everything froze up, and the Dow is now below 10,000. 

We have practically socialized our financial markets.  All because 6% of American homeowners defaulted on their mortgages.  Yes, 6%. 

I’m a little worried about this, but what truly scares me is the fact that Americans think that Barack Obama can fix it.  I normally have faith in most of America, but not now.  How STUPID can they be?  This guy has almost no experience.  He’s been studying up on foreign affairs thinking that’s what would get him elected before Iraq turned then the economy failed.  He keeps being asked what he will cut from his spending plan, and all he does is enumerate what we NEED to spend. 

Americans are STUPID if they think Obama will keep his plan to socialize health care, cut the taxes on 95% of Americans, as well as 95% of small business owners (he likes that 95% number), all the while raising taxes on the people who create the jobs and make this economy move (people forget businesses don’t pay taxes — they pass on the cost to the consumer).  I guess you can consider it a tax cut if you go from paying $10,000 in taxes per year to paying $0 because you have no income.

Americans balked at spending $1 trillion on bailing out Wall Street, but I guess they’re OK with spending another $1 trillion on themselves.  But, not really.  Most won’t see the benefit of any of this $2 trillion, but they’ll certainly be asked to pay for it. 

On top of that, Americans are going to give Democrats even more power in both sides of Congress.  These are the people that got us into this mess, and Americans are going to vote for them?  I mean, c’mon, Al Franken in the Senate?  Charlie Rangel will keep his seat?  Jefferson in LA ($$ in the freezer guy) is going to be voted in again?  I-D-I-O-T-S!

I feel like I’m living is some sort of weird alternate universe.  We are all going to be screwed six ways to Sunday, and American sheeple are going to follow the Democrats right over the cliff.