I’m guessing it’s more of a crisis to many people who are actually affected by this problem.

what do ya think about Bear Stearns bail-out?

No doubt, and I neglected to state outright that it is certainly a crisis on a personal level to face foreclosure.

I know next to nothing about the Bear Stearns bail out . . . what should I think about it?

check this link: http://tinyurl.com/26w8on

The real question is: if a ‘correction’ is good for the little folks, shouldn’t ‘correction’ be good for the big investors/market-eers?

That would logically follow . . . so in answer to your question, yes. Those poor big investors will find a way to bounce back, I’m sure.

what should I think about it?

If you like privatizing profit and socializing risk, you should be needing a change of shorts, by now.
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JP,
That’s a clever turn of phrase. I guess socializing loss (like Liberals want to do with the sub-prime mortgage crisis) is similar to socializing risk?

Ned Williams:

“Socializing Loss” is a fact of life. All loss (and all risk) is socialized, whether one likes it or not. When people who are unable to meet their obligations are loaned money and then default on those loans, the entire system of banking is affected. My credit card rates ( for credit cards on which I, thankfully, have moderate balances–all of which will be retired in about 30 days) are going up by leaps and bounds. This is true on two or three cards which I have never even used.

The banking and financial sectors in this country are in trouble because they, the supposedly professional people in this situation, elected short term profit (and a lot of it!) over long term fiscal prudence. Were a lot of people foolish to seek or allow themselves to be talked into purchases or re-fi’s on ARM’s with all sorts of mechanisms they didn’t understand would kick in after the “honeymoon”? absolutely. Was it then, their fault alone? hardly.

The public was advised to buy homes or do re-fi’s, by slick ads and “financial geniuses” on television and various talk shows for most of the last six years. While the economy trended donward in most of its indicators, the housing market went full steam ahead. Not just houses, mind you, but outrageous houses. Large, ostentatious homes with amenities that many of the buyers had only dreamed of in previous years. Of course they were silly, stupid or downright delusional to think that they could afford to pay mortgages, taxes and the other costs of home ownership when they had very little money to put down and no cash reserves to tide them over if they lost their jobs or had other “unforeseen” contingencies arise. If, and this is a huge “if” lenders really did due diligence on loans, a significant portion of these loans would never have been written. It is debatable how many of the marginal borrowers would be in the situation they are now in, if not for the defaults (caused by frauds) that put such strain on the monetary system that the ARM’s went through the roof (in relative terms).

Bush’s contribution to this situation was to put his fingers in his ears everytime someone (in or outside group of financial & budget advisers) said there was a systemic problem. By not reining in the lenders whose practices were unethical, predatory and usurious the government gave implicit permission for those practices to continue. The housing “bubble” was the “bright spot” in many otherwise dismal economic reports over the last several years. With the war in Iraq going badly (yes, it really is going badly) and our econony hemmoraging debt to China and other nations, Bush could point to the “housing boom” and ignore the canaries that had keeled over in the coal mine, so to speak.

I have no problem with people learning a lesson about fiscal prudence, although for many this one seems harshly disproportionate for many. There is, of course, much talk about how a significant portion of loans to non-Whites were written for significantly higher interest rates (but it wasn’t, y’know, racially motivated). What would be refreshing to see is a series of prosecutions by the Feds and states Attorneys General to strip the predatory lenders (a number of whom have bankrupted their companies but amassed large personal fortunes) of their assets and let them see the inside of the U.S. penal systems, up close and personal. But, that is unlikely to occur, since laws and regulations generally don’t treat anything except embezzlement of funds as an indictable offense.

But, sure, it’s the borrowers who should take all the blame or, at least, will.

I left a very lengthy comment over at the OP, so I won’t repeat it here. But the gist of it is, in my opinion, that the people losing their houses aren’t the only victims. Nor are the big-time corporate investors/money-lenders. Our economy is very heavily dependent on the “American dream” of owning a home. When that suffers, we all suffer. “Trickle-down economics” is not something that only works when you’re giving tax breaks to the rich folks; when they stop spending money, it hurts the economy (as services such as homebuilding are the only ways in which to keep money here in the United States). Do I really feel sorry for those jerks who got all dreamy-eyed about buying more home than they could afford (when I did not)? No, but they’re the backbone of our economy and we have to support them. That’s not a liberal point of view, I assure you. That’s the fiscal conservative who lives within me writing here.