And with it the bathroom sink...

It's no news that we are facing a hard time as a country. It has always seemed strange to me that while at war we were doing just fine- it almost seems justified that the economy would tank. I just fear that it's going to get worse (way worse) before it gets better. For thousands of families that has already meant losing their homes. Here are my morning thoughts on the issue.

The unforgiving market is less a bull or bear and more just people's hopes & fears realized. As we move into another month of economic downturn & stress on the housing market, the credit industry, and rising consumer prices-- one has to ask how did it get so bad? Sure there is a lot of pointing fingers at greedy corporations or lax regulators or just blaming the capitalist system we live in- that is expected and I fully agree we need to examine all those actors and our system- but is there a larger message out there?

I certainly haven't found it yet, but did come across some interesting views over the past few days- especially now that Fan and Fred are set to receive a taxpayer bailout that could wind up costing us more than $1 tillion. That ain't just spending cash, especially when families are feeling the crunch more than ever with rising fuel and food costs, increasing financial consumer product prices, and a continuing foreclosure disaster due to the subprime lending fiasco.

I want to share a documentary from the California Reinvestment Coalition which puts a human face on "foreclosure". In their own words: A conspiracy of greed in the mortgage industry and benign neglect by the Federal Reserve has taken the homes of thousands of Californians and leaves hundreds of thousands more at risk. CRC's documentary shows the need for stronger legislation to protect consumers, and stricter regulation of the mortgage lending industry.


What is clear now is that the way the government and regulatory agencies have been letting lending firms and the biggest banks in the country offer the "American Dream" of homeownership to families is not going to work in a profit driven market. Why not create a new sphere of lenders where growth and socially responsible practices build off of each other. Though perhaps government-sponsored enterprises(GSEs)such as Fannie and Freddie were supposed to have a tinge of that thought, it didn't work as the market took advantage of F&F's status and benefits and they wound up too big to fail as they touch 70% of all mortgages in the country.

Perhaps I'm drawn to explore the financial crises we have been facing over the past year+ as it is a new language to me- something I never thought I would have to understand or participate, but I have been flung face first into a new world where the powers that be operate (thanks work!). I've noticed there is a lot of comparison of the market to human emotions and qualities- anthropomorphizing our financial sector- that may be at the core of driving the bull or bear -ness of our market as it influences investors' will. As humans though, that is how we relate, but it's important to catch this and use the right metaphors or else we get lost in a sea of words amidst a sea of numbers.

What we need is a reorganization of the lending market that is more accountable to the public, whose operations are transparent, and a system that does not leave taxpayers to foot the bill. Joseph Stiglitz's commentary makes these points and smartly points out that there is a pattern of taxpayer bailouts with no regulation or cap on how deep our pockets run- "All of these principles were violated in the Bear Stearns bail-out. Shareholders walked away with more than $1bn (€635m, £500m), while taxpayers still do not know the size of the risks they bear. From what can be seen, taxpayers are not receiving a cent for all this risk-bearing."

So as investors would like to continue taking big risks, consumers and taxpayers are left footing the bill while the head honchos of mega corporations, private equity firms, and financial institutions walk away with larger than life severance packages- or even keep their jobs (as in the case of the TPG-led buy-in into troubled thrift Washington Mutual).

As taxpayers we need to stand up and tell our legislators we will not be responsible for picking up the pieces of risk taking ventures that lack transparency and glide by without any regulation.