You're right that executives will prosper no matter what happens. What might be missing is the fact that Fannie Mae, et al, are the cash cows for your local bank. If the feds let them die, your bank might not be able to cover your deposits, because your bank makes money by selling its mortgages to others.
Fortunately, banks were not deregulated, and are required to maintain significant (though not sufficient in a true crisis) cash reserves. Sale of risky loans bundled together was totally deregulated at the end of 2002 (thus, no cash reserves required), in legislation authored by Phil Gramm, McCain's former chief econ advisor. That's the core of the crisis, for these funds are collapsing ...

You're right that executives will prosper no matter what happens. What might be missing is the fact that Fannie Mae, et al, are the cash cows for your local bank. If the feds let them die, your bank might not be able to cover your deposits, because your bank makes money by selling its mortgages to others.
Fortunately, banks were not deregulated, and are required to maintain significant (though not sufficient in a true crisis) cash reserves. Sale of risky loans bundled together was totally deregulated at the end of 2002 (thus, no cash reserves required), in legislation authored by Phil Gramm, McCain's former chief econ advisor. That's the core of the crisis, for these funds are collapsing and they are held around the world in amounts as large as all the stocks traded on the NYSE. And the rub, ultimately, without assistance, would probably be lack of cash for your local bank.