Pop in agreement, but...

Actually it was not a crime in the Confederate states to teach a slave to read, and many Christians, including Confederate generals, and churches taught them to read, even making schools for them. This too was propaganda (just like "Operation Iraqi Freedom", to justify Invasion and War against Southern States, i.e. Operation Emancipation) from northern presses. More studious blacks agree even today.

It is the Yankee government, and New York presses in particular, that has used what Orwell called Newspeak and virtual illiteracy where [b]...

Pop in agreement, but...

Actually it was not a crime in the Confederate states to teach a slave to read, and many Christians, including Confederate generals, and churches taught them to read, even making schools for them. This too was propaganda (just like "Operation Iraqi Freedom", to justify Invasion and War against Southern States, i.e. Operation Emancipation) from northern presses. More studious blacks agree even today.

It is the Yankee government, and New York presses in particular, that has used what Orwell called Newspeak and virtual illiteracy where "peace" means war and "freedom" means tyranny (on every Congressional bill to, e.g. PATRIOT ACT) to cover their true intentions, and their legal loop holes behind their legislative jargon. Washington has been doing this since 1861!

It is complicated but the main issue is liquidity in lending markets.

Instead of the old way where you got a loan from the bank and paid back the bank and the bank made a profit off the loan a market was created to trade in mortgages.

To continue to lend money for mortgages, mortgage lenders had to sell their mortgages to get more cash to make more loans (making their profit off loan commissions to interest collected over time).

At first, the mortgages that were sold, (sold as investments called CDO's) looked like good investments. After poorly designed loans, because of adjustable interest rates that home owners did not understand, began to go bad the market that traded i these CDO's sto...

It is complicated but the main issue is liquidity in lending markets.

Instead of the old way where you got a loan from the bank and paid back the bank and the bank made a profit off the loan a market was created to trade in mortgages.

To continue to lend money for mortgages, mortgage lenders had to sell their mortgages to get more cash to make more loans (making their profit off loan commissions to interest collected over time).

At first, the mortgages that were sold, (sold as investments called CDO's) looked like good investments. After poorly designed loans, because of adjustable interest rates that home owners did not understand, began to go bad the market that traded i these CDO's stopped. Lenders could not replenish themselves with cash. There was no cash to renegotiate bad loans so more and more go into foreclosure. Less home sells than a big industry of our nation, home building, starts laying off.

Meanwhile, new accounting rules, go into effect (FAS 157), that requires everyone to report their financial investments at the value they are actually worth today instead of at the price they were purchased for. When there is not market for the investments you basically are going to report those investment values at fire sale prices.

So huge losses are reported on the financial news. Consumers begin to lose confidence. 2/3 or our economy is based on consumer spending which is directly tied to consumer confidence.

At the same time, banks are required to maintain a ratio of assets to the amount of deposits. CDO's are assets, but now they have no value. Banks can't make loans anymore because their ratios are already screwed. (This is were banks should have begun to renegotiate with home owners to stop the flood of foreclosures, but they didn't).

So about this same time, as stock markets are starting to decrease, you have Christopher Cox, head of the SEC, revoke the uptick rule which prevents short sellers from jumping on weak stocks and driving them into the dirt. All these short sells (sales orders) make it appear that the market is in panic and free fall. In a panic the populace joins in trying to save some of their retirement. Panic mentality ensues. Consumer confidence crumbles. Consumer spending stops. Business lay off their employees. Employees fearing being laid off spend even less.

So the main problem is how to we get liquidity back into the lending market and restore consumer confidence. Bush tried by just giving banks mo...

So about this same time, as stock markets are starting to decrease, you have Christopher Cox, head of the SEC, revoke the uptick rule which prevents short sellers from jumping on weak stocks and driving them into the dirt. All these short sells (sales orders) make it appear that the market is in panic and free fall. In a panic the populace joins in trying to save some of their retirement. Panic mentality ensues. Consumer confidence crumbles. Consumer spending stops. Business lay off their employees. Employees fearing being laid off spend even less.

So the main problem is how to we get liquidity back into the lending market and restore consumer confidence. Bush tried by just giving banks money, expcting them to lend it. Banks held on to the money to make their asset levels look better.

What probably should be done is to purchase all the CDO's that banks have to report at a loss on their financial statements. Now the banks asset levels would be better and they could get back into the business of lending (and rules should be made to limit banks from buying complex derivative investments with their deposits instead of lending).

The U.S. govt would hold the mortgages and could renegotiate the terms so people stay in their houses. The government would get back a great deal of that money.

Here's the big catch. Most people took their loans out when housing prices were at their peak. Even if they renegotiate their loans it isn't worth it to a home owner in the long run financially. They would be paying off a mortgage so much higher than what their home is worth. They are actually better off to walk away from the loan entirely.

Laws need to be created where you can not make consumer debt into investments, or if you are going to allow that, that the investment itself cannot be repackaged into other investments to where you have 20 investments riding on one mortgage.

That's about as simple as I can make it. And some may differ on my analysis.