Again, I don't want to dabble too much into politics in this blog, but I find it amazing that some crucial information is not being widely discussed by the various talking heads on TV news.
The payoff for delinquent mortgages in the US is between $60 and $100 trillion. Pay this off and a lot of the crisis goes away.
One big problem is that the derivatives total up to about $80 trillion. The US GNP is about $14 trillion. A lot of those bad loans are wrapped up in that $80 trillion derivative packages.
The reason we got into this mess is that back in the late 70s, the federal government initiated the Community Reinvestment Act (check it out on Wikipedia) which penalized lending banks for not giving loans to low income borrowers. Many of the mortgages applications were filled out with false information (i.e., income, job status, etc.) The mortgage people made the commissions and then sold the mortgages which got repackaged and sold as securities. A lot of those securities are owned by investors (and banks) in other countries (i.e., China)
This was all legal and stupid. What a mess. Giving out money for votes. Our Congress is the main culprit. The voters need to make some adjustments.
Just my two cents worth.
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