I agree 100% we keep talking bailout lets talk educate. What about the ones of us who have done it right? We pay for it!

why is this sooooo obvious to everyone except the benighted running this country? (and the greedy wanting their handout!)

We certainly have become a pathetic bunch in the past 20 years!!

I know that this is all tongue-in-cheek, but… seriously. They’re bailing out these borrowers who knew they were getting themselves into trouble – I want some help with the mortgage that I got (which is a sensible, low-interest, 30-year fixed…), just on the principle of fairness. No help for me, no help for them!

Absolutely on the mark!! Why don’t news agencies tell the story of the vast majority who have fiscal responsibility?

Seriously, is the fed going to bail out everyone. As much as it hurts in the short run, we’ve got to let this economy correct itself. Is it really the government’s fault that stupid people took out ARM’s. Do they not understand what ARM stands for. Bernanke and Big Brother need to do us all a favor and let things take there natural economic course.

Right on, brother Bing!

I’d also like to request from uncle Ben:

-Bail-outs for the federal budget. Perhaps we could borrow some more money to pay back all the money we borrowed? I get 0% offers in the mail (although less of late) so I’m wondering if the government could take out about, say, a billion credit cards and get it interest free? All you have to do is moved the balance around every so often. It’s awesome!

-A bail-out for my dog. Ever since I couldn’t unlock the poor, trapped equity in my house any more, my dog has to eat (shudder) dog food. She’s used to steak. Please, uncle Ben, bail out my dog. She’s really hurting right now.

-A bail-out for Africa. If we could stop them fighting each other by sending over bazillions of troops, we could have them make cheap crap for us. The Chinese have got so expensive recently.

Thanks Ben!

The solution to essentially make everyone in the US “above average” – a goal that every politician promises but fails to deliver – is to continuously print money at the Treasury and disburse it to all citizens and non-citizens in the US whenever they request it from their atm machines which would allow them to have all the houses, cars, plasma tvs, rib-eye steaks and iphones that they desire. To ensure that the currency doesn’t weaken (which would foil this plan) we would mandate that foreign currencies peg their currencies to the dollar at a rate that only US politicians can determine. Obama seems to really understand this whole concept more than the others which is why I plan to vote for him at least 10 times – if we all can’t be above average what is the point of having a society?

I have paid every debt I ever contracted.

I live in a house I can actually afford – while the nations janitors borrowed $500K they knew they could never repay.

AND NOW MY TAXES WILL GO UP TO KEEP THEM IN THOSE HOUSES….?

Let’em die along the side of the road.

People ask why they are doing this? Simple. It is planned, it is rigged, and the rich will get richer wiping out the middle class. Do you think our gov’t is blind…..? They may act like it, but they know what they are doing!

Banks and mortgage insitutions are not the only ones to be blamed in this housing crisis. Blame, and more heavily, the people that bought these houses on pure speculation and greed. And, please don’t label them stupid as if they didn’t know what they were doing. They knew what they were getting into. They thought they could make a killing by flipping. Others were foolish enough to max the increase in equity and buying a Merc or BMW. And now they are crying foul that they were misled? Yeah, right.

Oh and let’s not forget that one of the reasons so many ’sub-prime’ borrowers can’t make their payments is because real (as-in after inflation) worker income in this country has not increased in nearly twenty years. The past twenty years during which we have seen a mass exodus of high paying middle-class jobs overseas. Remember that when you sell out the working middle class you are also selling out the econommic backbone of America.

Bernanke only bails out Wall Street banks. After all, isn’t it the purpose of government to make sure the rich get richer at the expense of everyone else so they will feel even richer? Guess you’re out of luck.

What about jerks like me that have no credit card debt, an old-fashioned, 30-year fixed mortgage that I pay on time each month for a small home, and an 8 year old car? Hey, I’d like to live in a McMansion! I’d like to buy a Prius!

I agree. In the mean time, those greedy loan dealers who made millions on the sub prime loans are going free. I could see no reason for bailing out ANY large firms. We might have a slightly deeper recession, but that’s a small price to pay. In the long run, it will teach those miscreants to think twice.

sanjosemike

Glad someone is finally speaking up for me! I missed out on taking a subprime mortgage because I thought there would be consequences if the rate jumped. I know, I know, that was pretty stupid of me. But so many other stupid people seem to be getting a bailout, so why not me?

You got that right, Brian. Why is it that those of us who live within our means, save what we can, invest for the long haul, and spend responsibly (and still manage to have a pretty good time) always end up getting screwed? Bailing out the idiots and the greedy will just devalue what the rest of us who play by the rules have worked for.

Mr. B, could you also do something about tornados and earthquakes? Oh, and why do French Fries have to be bad for you? Could you do something about that too?

I also agree 100%. This blog could have easily been titled “Dear Santa…” since neither of them have the power to fix the compounding crisis.

great satirical piece!

why don’t we just call it a redistribution of wealth and sack the rich for the benefit of the poor?

Thank you Bing! It is too bad that your irreverent sarcasm will not be heard by Bernake and Co. If only they examined the US census and the incomes of US population that can afford and don’t own already a home and then compared that number to available supply of homes in 200,300,400,500K range they would know that no bail out will fix the problem. The prices have to come down….Sad that even Republicans are trying to defy basic principles of capitalism.

AMEN !!!!!!!!!!!!!!!!
Sorry, you gotta reap what you sow

I have followed all the rules. I tried really hard to save that 20% downpayment, only to find out the house price went to the sky – thanks to the greedy bankers and stupid buyers. Now that the cycle kicks in and price loose a bit, guess what, the Fed tries to save the the housing market. If everyone deserve a house, then what about me? At mean time, Fed is printing more money, and lowering the interest. For my hard earned savings, it’s a double whack. Silly me…

Benidiot is a mornon. I voted for GW and now I hate him.

The hell with these people caught up in their on Foreclosure mess, they get bailouts for being irresponsible, and I get nothing for being responsible. Show off time is over; it’s payback time!!

AWESOME post!
TOTALLY agree.

How about all those who took the risks AND those people who signed the LEGAL contract, be held responsible for their actions?

THANKS for a great post!

As a regulator will the Fed now
- announce a cap on leverage [ after all Fannie Mae just put in a credit score requirement for individuals]
- require canceling of bonuses at firms who borrowed from their window[s], till the Fed has inspected every institution, pronounced them healthy, received repayment of it lent etc.
Oh No. That’s against free market principles….

My wife and I work hard, we save, we put money into 529 plans for the kids, we bought a house we could actually afford, and now we need to pay out for all the people that can’t live within their own budget. No tax rebate comming to us for being responsible — I guess it’s better to be a fool with your money and then ask big brother to bail you out.

Why does it seem the responsible people are paying for this. I have yet to be late on a mortgage payment, yet my neighbors who took out loans they couldn’t afford go into foreclosure and drop the price of my home by 30% when I want to move. When I applied for a mortgage they lender was willing to give me much more than I could afford, yet I said no thanks. I want to afford my mortgage.

Hey Fed…How about a payout to those of us who took a mortgage we could afford? This will make up the the losses in our homes value as a result of foreclosures.

Why don’t you address this to Senator Kennedy. After all he would like or maybe demand the same things you are suggesting.

The doubling and tripling of home prices never made any sense to me (average American guy) and the markets reaction still doesn’t make sense. What the hell. So go ahead Mr. Bernanke – print 10,000 dollars for everyone; including the CEOs who’ve walked away with tens of millions.

Have you written your congress man? The Senate Finance Committee? Your representative? Quit posting to blogs about how upset you are about it, and let someone know that can do something about it! http://www.knology.net/~aquaabyss/voice/

I agree with this 100%! Had I known that there would be a bailout I would have been irresponsible as well! Stupid me waa responsilbe, did my research, shored up my credit, and got into a mortgage I knew that I would be able to afford. Their was an educated risk that these borrowers took and they lost. I have a question regarding the people who are getting bailed out as well as those who are just “walking away” from their responsibilities, how is their credit rating after this happens?

Oh yeah, bail me out too. Anyways, the fed can print a few Trilloin $ without any problem. That way we can pay off everyone’s mortgage in this country. No more foreclosures and subprime mess to deal with. How sweet! Just print more money and turn thi9s country into another Zimbabwe.

The recoverable oil in ANWAR would only replace imported oil for 18 months, yet it would take years to get it here. Additionally, you state only 2000 acres of ANWAR would be needed, but those 2000 acres are scattered within the whole ANWAR, they are not in a small segregated portion. Therefore, all of ANWAR will be used.

You talk of reducing our dependence on foreign oil. What happens when all domestic sources are gone? YOU SHOULD BE TALKING OF ELIMINATING OUR DEPENDENCE ON OIL (yes that includes domestic sources). Oil is to precious to burn as transportation fuel, think of the shortage for synthetics in the future, some of which have not been invented.

Do you realize the majority of oil is used to power diesel trucks to move freight. What would happen, if the Federal Government funded a Maglev train from Los Angeles to Las Vegas, then through St. George along our Southern boarder east to Dallas then on to Atlanta and finally on to the East coast.

All our freight could be moved by Maglev trains running on AMERICAN MADE ELECTRICITY.

As a secondary benefit, this spending would spur the economy, and would result in an asset that pays back a return to society, a return that is available for purchase by the public. This is important to have Government projects provide a return and goods and services available for purchase by the public.

The reason is that unlike Military, Immigration, Homeland Security or Police Force spending, which adds more money to the economy, but does not provide additional goods and services available for public purchase, this type of spending is not INFLATIONARY.

I REPEAT, GOVERNMENT SPENDING ON THE MILITARY IS INFLATIONARY, GOVERNMENT SPENDING ON CAPITAL PROJECTS THAT PROVIDE GOODS AND SERVICES AVAILABLE FOR PUBLIC PURCHASE ARE NOT INFLATIONARY.

Someday, I pray the Lord will open the eyes of the Republicans that seek to steal the publics oil in ANWAR, and that these Republicans will refocus their efforts on meaningful causes that will enable future generations of Americans to be GREAT!!!!

Bernanke, bail me out too!!! I lost all my life saving by shorting oil stocks. My financial adviser suggested me to shorting oil stock and I just listened to his advice. This is entirely not my fault! Bail me out NOW!!!

Also why is only a corporate ‘bail out’ on the cards? How about underwriting / writing off / subsidising consumer debt (the real ‘asset’) and letting the banks pay the price for any derivatives related shenanignas????

I see that as being a much more effective use of tax payers money to directly benefit tax payers!

Speak up to the 3 canidates who want to be President next year.
They seem to want to bail someone or some foreign country out with your hard earned money

So we reward the traders on Wall Street who gambled and won big with borrowed money. We should all be able to make a bundle and if we lose we can have taxpayers foot the bill! The greed is obscene and shouldn’t be tolerated or encouraged.

Sorry Bing but no freebee loan today, I checked your credit sheet and it tells me you are a working stiff not a corporate entity. Had you encorporated yourself you would be entitled to a space at the trough with the other swine.
Benny B. your friendly loan officer and printer of vast amounts
PS.
As a working stiff you are entitled to pay off the national debt. I expect this may take a generation of two. So procreate procreate, do it soon there may be a Tax in the works on that too.

corporate and public welfare (going to private individuals) are evenly wrong and unconstitutional, although recent FED actions might help in the short run, I think tinkering with the market (any market) only brings unintended consequences and eventually higher cost — compared to just letting the “issue/problem” run its course. Long term, it is yet another Big Brother move to control our lives and only encourages both corporations and individuals to ignore or re-price risk. “Government insurance” or bails outs, come with a costs and I equate it to “inviting the fox into the hen house”.

Dear Mr. Bernanke:

Please send me a check for a ga-zillion dollars, as I have been very good this past year and surely deserve it. Also, I would like to join a social organization called the Emperor’s Club and need some extra cash for the membership dues.

Love,
Tatarska

PS: I left a glass of milk and a plate of cookies by the chimney for you. Enjoy!

Oh Stanley, you think so small.

If we’re really going to bail out home “owners,” shouldn’t we also give them each a $1,000 a year Starbuck’s credit? Maybe a new Blu-ray disc player with every renegotiated loan? A tax break for all their fast-food receipts at the end of the year?

Seriously, how do you people expect me to load my iPod with legal rips if you won’t give me a 100% rebate on the player? 99 cents a song adds up fast with all that capacity.

It’s getting so I won’t be able to afford a measley salad for dinner, much less a triple-meat-as-condiment burger to whorf down while I watch “The Real Housewives of Orange County” on my new Hi-Def TV.

True, why bailout? Why symphatize with these people facing foreclosures? These are about GREED & ignorance, mostly GREED. Ignorance is never an excuse. People got GREEDY buying homes they couldnt afford, refinanced to buy expensive cars, build pools & plush backyards, had luxurious trips, etc, spending beyond their means to keep up with Joneses. Showoff time is over, it’s payback time. Min Pymt, Int Only, ARM,100% Loan = Foreclosure. Now theyre in trouble, want help & play the blamegame for their own GREED. They think their addiction to easy money is free & can just get away with it? Pay up or give it up! They never own their homes anyway – banks owned them.Why bother taxpayers who did their homework, stayed in modest homes & live within their means. We’re all suffering from inflation bec of these greedy people. Let the rest of us who arent greedy watch how GREED bring people down. GREED & IGNORANCE never lead to American Dream.

Why bailout? So these people can continue to show off their fake wealth? They never own those homes anyway, the banks owned them.

The sooner we get these people out from “their” homes, the sooner our economy can start recovery.

if i play stupid long enough can i get bailed out for buying the wrong car…the salesman talked me into it…i didnt know. how about i just quit paying my mortgage, play stupid and ask for a bailout, will you help me…i mean come on why should those in adjustable mortgages get the bailout…what about the average joe that actually reads what they are getting into. they will lay me off and i wont be able to pay, but im not stupid so i lose my house…right?
where the heck is accountability

Re: “Please Mr.Bernanke” – many a true word is indeed spoken in jest.
It strikes many people in the UK that the US finance markets and Wall St. especially have become
not only cloud cuckoo land but also and more worryingly, the place of no come backs for unwise or even foolish policies because of dear Mr.B. What on earth will history say of this man? Recession and hyper inflation will be his legacy at best.

The US will, until it (and the UK,Japan,et al) takes its medicine
be a dangerous example to the world to follow!

I want to know where I can send my unpaid bills and stock loses? Oh, wait; I do what I’m supposed to do and besides, I’m not a part of the government buddy system for bail outs. I forgot, I’m only part of the free market system if I’m losing the shirt off my back to the big guys. You know, ancient Rome had a two class system, the rich, and everybody else. Look where that got them. Is the US to follow Rome’s history?

If the banks would just lower interest rates enough, I would happily refinance my house at a 5.50% or lower. I could then pump my extra $100 per month into other sectors of the U.S. economy. Why do I feel like I am being punished because I pay my mortgage, have very little debt, and a savings account?

Let me add social security to this one. If Bernanke can bail out big banks, then why not SSN?

Yeah, you poke fun at this situation but this is very serious. I do agree on education had it been done first then maybe it might not have come to this, it is now to late and we need to fix the problem rather than joke about it. You never know when a situation will come were you will need help, so be careful about being judgmental.

Chris, I agree with you totally. Though, sometimes the hardest thing to see is your hand right in front of your face. Everyone wants bailed out and not to have to be responsible for themselves. Personally, lets not bail them out. Don’t we live in a capitalist society, those who can do and those who can’t well the rest of us should not have to bail them out for their mistakes. After all if we keep putting the burden on those who can and never make those who can’t responsible for their actions why should any of us care? The government with take care of us, just like they have taken care of Social Security, Medicare, the deficit, … Their successes are so many it is hard to list them all.

Brilliant! Are you sure that you are not an economist? You have the best grasp on our economic needs that I have read. What? The guy in the next office claims this article is satire. He is wrong… isn’t he?

If these Politicians really care about us then why don’t they lower the Federal tax on gas. That type tax cut would benifit EVERYONE and not just their rich friends.

The issue is that you must learn to spare some money instead of spending more than you earn.You have stopped for 2 to 3 decades now to appreciate the real value of money .And dont blame Mr Bernanke but his predecessors and especially Mr Greenspan my friends.

Excellent Blog! We need to do a lot of things to get our economy back on track…but here are just a few items where we could start:

1.) Stop printing money out of thin air which contributes to the rise of inflation and further de-valuation of our dollar.

2.) Stop using articficially low interest rates which do nothing but continue to stimulate mal-investment and bad decision making in businesses and individuals taking on too much debt

3.) Shrink our global empire. We US citizens are not here to fund a global task force that polices the world. We should be spending/saving that money here at home.

4.) Let the free market work…no bailouts. If people and businesses made poor investment decisions…tough cookies, learn to live with your poor decisions.

Many factors contribute to our current situation and in my attempt to sum it up in a single word…”accountability” or lack thereof on the part our politicians, business leaders, banks, and ourselves. The free market should sort this mess out…Mr. Bernanke your attempts to prevent a recession only make the inevitable much worse for us all.

Forget about it, Ben only bails out his big banking buddies. You know the guys that already have 3 jets? God forbid they can’t buy another one so here’s $30 billion taxpayer dollars so things don’t get too scary down there on Wall St. -See ya at the foodbank!

Lower everyones mortgage 50% across the board.

I know, let’s give over a $trillion dollars to the military each year!

Oh wait, we really do that.

You simplify the issue excessively in this article. You need to deal with facts. There are only 2 things the federal Government should have done when dealing with a housing and banking crisis. The 1st is nothing. If you want the market to correct itself and run its course, then let it! If it’s going to crash, then let’s get it over with. Banks, homeowners, everyone will need to be accountable for the bad decisions they made. How it affects the rest of the economy and people who did not make bad decisions we’ll have to see. It’s risky but everyone will learn their lesson and won’t do it again. Hopefully the crash doesn’t drag everyone down with it.

The second option is to bail everyone out…the homeowners, lenders, wall street firms, everyone! You can’t throw a little water on a big fire. Either put it out or let it burn. Otherwise you’re just prolonging the agony for everyone, including those who made the right choices.
I don’t know what the correct answer is but I do know this. Why in the world would the banks work with home owners to keep them in their houses if they see a bail out coming. It clearly costs them billions more when they foreclose on houses and have to sell them at a significant discount. It makes more financial sense to lower the interest rate or principle amount, keep folks in their homes and continue to collect the payments every month. That’s a no brainer! So why isn’t it happening? Because the banks and investors aren’t stupid. Why should they give Joe home owner a break when they hear lots of talk about bail outs! Why should we reduce the principle of a loan when there’s a risk that Joe home owner might default a year later when the market is worse? So they wait for the guaranteed money from the Government then reduce the principle in exchange for FHA’s guarantee that if Joe defaults, Uncle Sam will write them a check. The investor gets 80 cents on the dollar instead of the 50 cents they would have gotten if they foreclosed.

If you’re going to put out the big fire, be prepared to bring lots of water. Otherwise, stay home and let it burn quickly. Let’s just hope that the neighbors(people who made sound financial choices) have lots of water on hand if the fire spreads to their house!

My message to the Government: either have the big bail out or don’t, but SHUT UP about it and let the markets out of limbo.

Response to Christopher Johnson:
The reason the “benighted” have no clue what is happening to the little guy is because they have plenty of money. These guys don’t have to worry where the next paycheck is coming from, they don’t have to deal with creditors, Their gas is paid by the institutions they work for, their meals are paid for by others. The president had the perfect response to the oil crises about two weeks ago. When he was told that the price of gasoline was at an all time high he simply said “really? I didn’t notice”. That should tell you all you need to know.

Let’s rely on, then blame, the government for everything! Damn Fed!

The government can bail out as much as they like — housing is still toast. How sad they don’t get it — fundamentals, fundamentals, fundamentals!!!

Hey, I’m Ms. 6-pak and I get it!

I agree totally. Yesterday, I called my senators and voiced my opinion against a bailout for subprime loans. Education is fine, but a bailout would be irresponsible of our government. My neighbors hold an ARM that they got 2 years ago. THis is their third refinancing in 6 years. They have no equity, and continually told us neighbors we were foolish to go for the fixed 30 yr mortgage. Now, they are in trouble, the boat they bought with the second refinancing is for sale, and yet they are COUNTING on this bailout. Who will pay their credit card debt off also? Car loans? It is time for the 95% of mortgage holders to call their senators and representatives and put their verbal foot down. Why should I pay more, I have been financially responsible. I have two kids going to college in 2 years, somebody want to foot that for me?

The concept of credit and interest has been around for hundreds of years (as in B.C. hundreds). How is it that we as a consumer economy haven’t figure out how to manage it yet ? Mind boggling to say the least.

I guess you really don’t understand the role of the Fed? Let me educate you. The Fed, if needed, should work to save banks and not the indiv investor. Management of US monetary policy is the Fed’s role. Guess how they administer that policy? Through the banks….duh

Thank you for writing this. Brightened up my morning with some good humor. Now if Obama and Clinton would just read this …but no, it might give them some more ideas.

I agree as well, if I hear once more about bailing out folks who bought homes they could not afford to impress all there friends I am going to be sick! Let the banks foreclose and then lets make it a lending policy that once you have a foreclosure on your record, you cannot finance a home for a minimum of 10 years, this would teach everyone a lesson although not help the housing market much. When it comes to housing there is only one simple rule…IF YOU PAY YOU STAY, IF YOU DONT, YOU WONT!!! Is this that difficult to understand?

Christopher, it’s obvious to them, too, but they are too busy pandering to the masses that they think they think they are fooling and too busy trying to buy votes so they and their party can stay in power to give a few minutes of thought to how they are absolutely ruining our financial systems, nullifying contract law, etc. Short term potential gain is more attractive to them than long-term destruction of money, trust, etc. It truly is time for a third party made up of rational, thinking people.

You forgot credit card debt!

The interest rate on credit cards is not 6 to 9 times the rate paid by financial institutions for “easy money” they need to stay afloat. Maybe the Fed could cap credit card interest rates for consumers at the same rate as banks pay at the Fed Window. Now if you really want to get the economy rolling, the Fed could assume credit card debt for people who were mislead by greedy retailers that allowed them to use credit cards for purchases without adequately explaining that the money had to be paid back.

Since the $ is in the tank against the Euro, these actions would REALLY spur consumer spending for domestic goods and get our economy moving again.

I’d love to be bailed out.

We have two homes with affordable 30 year fixed rates. No credit card debt, no car payments, pension, 401K and savings.

Nice to see others rewarded for their financial missteps when one works very hard do things right.

Bing, I love your idea. I’ve been thinking for a long time that if the government would just give every citizen of the U.S. (man, woman and child) $1,000,000 it would be far cheaper than all the bail-outs to the as….es who got us into this mess. It would only cost about $300,000,000 (as opposed to trillions) and enable everyone to pay off their mortgages, buy stuff to rev up the economy, improve citizen morale tremendously and be the fairest and most equitable way to distribute all the largesse (which we will borrow from China or the Middle East, of course). However, where the money comes from is a problem for another day!

Katey C.

We are reaching the point of more more people demanding a handout than are paying the bill.

my fixed income does not budge upward.
everything else is going up.up.
soon even my wife and i may not be able to pay our fixed mortgage due to ever increasing taxes. you know,all
politicians are crying poor also.
can our illustrious politicians in washington bail us out. we sure need it!! thanks mr fed.

Once again the master has stated the obvious with wit and style!

I am completely behind this. Brian from Portland is right too. Lets talk education instead of bailout. I have lost money in the markets too. I knew the risk. I suck it up and take my losses…but I am still waiting for my bailout check. Everyone else seems to be getting one!

Heck, while we are at it, why not help pay for truckers’ diesel fuel so they can remain in business, even though the better alternative for distance hauling of freight is our rail system, which we essentially abandonded years ago. Maybe we could remove tax components from the fuel as well. Of course, then we would have to pay more for road and bridge maintenance. Where does this madness end? We have all gotten so used to entitlements (or bailouts) that we no longer depend on ourselves. Business is cyclical, and those that win, good for them, those that lose, be they banks, brokerages or truckers, well they either lose or change the way they do business. No one will subsidize me when my company goes under!!

While we’re all at it, let’s elect Hillary so I can have one of those awesome jobs she’s going to create and “free” healthcare. I’m a sucker and pay for my own healthcare right now. And I also went to school and got an education to get a job.

Forget hard work…I want a handout too.

I am not a banker or an accountant, but I do understand something about our financial system. First being the only thing Federal about the Federal Reserve is it is federally sanctioned. This is not tax money going into Bear Sterns, it is money from other major private banks, backed by money from the Federal Reserve, which again is made up of the largest private banks in the country. The only losers in this are the people who hold stock in Bear Sterns and possibly its employees. The Federal Reserve banks operate accounts that loan money to banks that they use to operate. They use the profits from these loans to provide services, transfers and administration. It a parallel private organizational system, mostly run non-profit with the Federal Reserve using its profits to support the infrastructure of our banking system and maintain funds so they have assets to stabalize the system. The Federal Reserve has much less power than they have had in the previous Century because, though still the largest component in the world economy, the USA does not make up nearly as large a portion of the world economy as it once did. They have to depend on other banks around the world to act in conjunction with them; sometimes they do and sometimes they do not. The system on which our banks operate on is based completely on credit and exchanges. This makes them all extremely interconnected. The Federal Reserve has indirect power over these banks and is authorized by congress to manage the banking system. They can set limits as to how much of the banks assets can be loaned out and how much the banks pay for interest on the money they borrow to provide loans. Being so interconnected one major bank failing will likely cause others to fail as the entire system tightens up and everybody wants to call in everything they are owed. Banks have usually better than 75% of their money loaned. Their business is making loans. Everyone benefits when everything runs smooth, credit is easy to obtain at all levels and inflation is in kept at a slow rate of change. The banks however gain the most. The largest banks, which make up the Federal Reserve, have the responsibility to privately manage the system. They employ funds and structure to minimize fluctuations which strengthens the economy to maximize their profits. They act in their own long-term self interest, which is also in everyone’s long-term interest. I know I do not have enough information to question their judgement.

This is so good! Don’t know whether to laugh or cry.

This is how it feels to be on a runaway freight train without an engineer. Is there no end to the torment of law-abiding, tax-paying, responsible citizens who have worked hard, saved, exercised personal thrift, and who are now expected to pay for everybody else’s horrendous mistakes and miscalculations?

I’m glad I’m Canadian…keep printing money bernanke…Thank you america.

It’s time for tough love I say. People need to learn from their mistakes, even if it means foreclosure and bankruptcy. There is nothing like a little pain to instill some common sense. No bailouts whatsoever.

That’s what is wrong with this country. The screw-ups get rewarded. The responsible get screwed. I’ve alway’s said, with all the social programs, you’re richer being poor in this country.

I have to admit that my patience is getting very thin for all of the bailouts of one failed person, corporation, plan, entity, etc., after another. I well understand the imperative Mr. Bernanke is up against to maintain order and stability in the marketplace and that confidence in the system is a perilous thing at the moment. In this regard he has done very well. However, Mr. Bernanke does not have a lock on the bailout tactics; Congress is doing more than their share of bailing even as they grill the Fed Chairman over his bailout measures. It is afterall congress that is sending rebate checks to much of the American public and proposing to bail out homeowners who got in way over their heads while the nation drowns in debt.

I for one agree strongly with Brian’s comment (from Portland, TN) that the problem here, particularly on the consumer side, is one of education. We are quick to blame those dastardly mortgage brokers yet it is the homeowners that signed the mortgage papers and accepted the terms…terms that anyone with basic elementary and high school math under their belts should be able to understand (no I do not work in the mortgage industry). So is it education, crooked mortgage brokers, or was everyone simply blinded by greed wanting ever bigger and more elaborate homes? To get rich quick?

For whatever it is worth, I downsized my home during the recent boom years and used the equity to have a lower mortgage on a smaller home so that I might actually be able to pay for my home during my remaining working years. It seems in the mean time that a lot of people were busy doing the opposite; piling on debt that they could not afford. The idea of taking out an adjustable rate mortgage when interest rates were at historically low levels and had nowhere to go but up seemed like suicide to me so here I sit on my 30-year fixed rate mortgage pay a little more interest today but a lot less over the long run. I plan, and I save, and do not buy things that I cannot afford so the result is I carry no consumer debt unless it is at 0% and then will only buy under those terms if I have the money saved to pay the debt off immediately if necessary (like losing my job in a recession). I buy pretty nice but used cars so that I do not have to carry huge car loans and I have a home that I can afford to make monthly extra principle payments on so that I will not have to figure out how to make the mortgage payment after I retire.

Even with this seemingly responsible approach I do not have a whole lot saved for retirement (though I do save continually) and wonder how I am going to make that work in about 20 years. I also have only a modest amount of savings. BUT…I am financially stable because I have been fairly conservative and did the simple things I was taught in school or heard on TV from the likes of Suzie Ormond and her ilk. I have done everything I could to do things right as a middle class American. I’m not rich but I am OK for now.

Sooo…the result is Uncle Sam is not sending me a $600 bonus check though my girlfriend who has a lifetime of financial irresponsiblity behind her is getting one; no one is offering to lower the principal amount of my mortgage because my home has lost value (though it certainly has); and no one is proposing to lower the interest rate on my mortgage (though that would sure be nice). On the contrary, far from receiving any benefits, this financially responsible tax payer and others like him are going to have to pay for all the bailouts of those who were either greedy, ignorant, duped, or however you care to describe it. And frankly I do not like it one bit because today I am being squeezed by higher energy and food prices just like everyone else.

Sound like sour grapes? You bet! I am a public school educated, C-student, middle class American of average intelligence yet somehow I managed to learn along the way that you do not buy a house you cannot afford, you do not pay userer’s interest rates for disposable and depreciating assets you should have paid cash for anyway, and that there is considerable power in compounding or amortized interest and that it can work either for you or against you in a big way. This is not rocket science (which I could never understand even on my best day).

When did the American work ethic turn into the American entitlement? When did making financially foolish decisions, whether as an individual or corporation, become safe or guaranteed against failure?

Lest I sound completely calous I personally believe strongly in charity and helping anyone in need and try demonstrate and live by this continually in my daily life. However, it is very hard to feel charitable for people and companies who acted out of greed, ignoring all the warning signs and have failed for it. I don’t want to see anyone tossed out on the street as a result of this mess that we as a nation find ourselves in yet when did it become role of government to bail out folks who gambled and lost? No one came rushing in to replace my retirement fund and other savings when it lost 80% of its value back in 2000 because I got greedy and bought tech stocks at the peak of their pricing. Come to think of it…hey!…where is my reimbursement check for that Uncle Sam????? I’m an American…I am entitled!!

Here is a radical thought…how about we all be a little bit responsible for our own actions in this country and quit looking for government handouts and quit suing everyone to cover for our own mistakes, carelessness or ignorance? The land of the free also requires that it be the land of the responsible. When we don’t act responsibly we lose our freedom to make intelligent decisions and the government steps in to regulate yet another facet of our lives that we obviously cannot be trusted to manage for ourselves. Just watch what happens to lending and investment regulations going forward after this mess.

Is there anyone running for President on a platform of personal responsibility? They would get my vote.

I find it interesting that US citizens, businesses, and governments (local, State, and Federal) can no longer envision an existence without easy access to borrowed money.

We’ve borrowed our way into a prosperity that is unsustainable. Eventually, probably in my lifetime, a day of reckoning will come.

Does any rational person actually believe that all the personal, organizational, and public debts in this country will ever be repaid?

I remember a morning when I opened my newspaper to read that international banks had refused to lend any more money to the USSR. It promptly disentegrated.

I wonder what is in store for us.

It is not so much the Fed. It is congress trying to bail out the people who don”t take the resposibility to pay their mortgage first.

Welcome to Rome my friends, the empire that ate itself from within. Remember the gladiators glorified with excesses,our sports people tread similar ground. The cheap imports from all reaches of the then known world delivered to the footsteps of the capital at a cost of slaves etc. The list goes on, history merely but repeats. The Roman civilization was exported but Rome imploded within. Cheers!!

Apparently Congress is ready to enter into the mortgage lending business. They, like the media, are whipping up all the sad sack stories and neglecting the fact that the rest of us who have acted responsibly with our cash and credit DO NOT want to bail out the irresponsible.

Most of the mainline media are posting articles about the AA”down and out” -people who are still living in a nice home with two newer cars parked in the driveway and who took out ARMs they could not reasonably afford.

While I feel very sorry for all who are feeling the financial sting of our collapsing economy, I have to say that I was super offended with some of these stories.

A gal on tv the other night was lamenting her situation (nice home with a monthly NO INTEREST payment of $2500; $70,000 job). She was mananging to make the mortgage payment but was having to shop at the Food Bank. She actually told the reporter on camera that she had to take off her Tiffany bracelet and jewelry and leave her trendy expensive leather designer handbag at home when she went to the food bank. Furthermore, a worker at the food bank offered and apparently did pay one of her utility bills for her.

Sorry, but I was aghast. And you can see these stories every night on the news or on the Internet.

The truly needy in our country are INVISIBLE. The truly responsible in our country are INVISIBLE. The truly greedy and irresponsible are absolutely VISIBLE and AUDIBLE.

Time to inundate Congress with an unrelenting onslaught of mail and e-mail and telephone calls!

All fun to talk about. But don’t count on anything ever changing. The idiot-elites in Washington don’t care anything about those of us that are playing by the rules. Bush, Obama, Clinton, McCain? These are the best we have? Pirates, thieves and liars. We all deserve what we are getting and we’re going to get more of the same. I studied hard and worked diligently my entire life to attain some level of wealth. The elites in Washington are dying to get their fingers further into my wallet and redistribute my “wealth” to stupid people who can’t read their mortgages and to companies led by greedy executives with plainum parachutes!
If we want to stop the madness, we need real change! Stop fueling the fire. Stop paying taxes. I’m really tired of these rich Washington elitists taking my hard-earned money and giving it away! Until they have equal skin in the game they have no right to tell me what should be done with the fruits of my labor!

Many factors contribute to our current situation and in my attempt to sum it up in a single word…”accountability” or lack thereof on the part our politicians, business leaders, banks, and ourselves. The free market should sort this mess out…Mr. Bernanke your attempts to prevent a recession only make the inevitable much worse for us all.

Posted By Brian Hooper, Chattanooga, TN.

Your ENTIRE POST was too rational for an American. Do they allow that much intelligence in TN.

Bless you my son, you have seen the light.

Don’t be concerned!

“Big Ben” is marking time and allowing many deadlines to come and go until he finally announces “RECESSION”!

He’s keeping the “Paulse On” life support and urgent care to sustain our “Affluent Society”!

Prolonging the agony regardless that our economy “passed Away” serves as the “Opiate” called “Tender love and care”!

Distracting our attention from the inevitable outcome: “If God calls you, you should go”; and don’t make him wait!

We must brace ouselves for “Panic Reality” coming down the pike!

Surely someone at Fortune has Bernanke’s email address to forward this to?

You mean… you don’t think Mr. Bernanke reads this blog every day?

Hey. I happen to like Ben. When I go for my checkbook, I don’t look at today’s balance. Instead, I look at a my balance from the previous two quarters, which is about as much as I have in their right now.

Thank goodness that I bought all of those Euros. It was the smartest thing I’ve ever done.

Bernanke, bail me out too!!! I lost all my life saving by shorting oil stocks. My financial adviser suggested me to shorting oil stock and I just listened to his advice. This is entirely not my fault! Bail me out NOW!!!

Posted By NotMyFault, Chicago

Dear NotMYFault
Corporate earnings and profits belong to those in Charge.

Corporate losses belong to the shareholders.

Corporqate defaults and bankrupt’s
belong to the TAX PAYER.

Finacial advisors are like Gypsie palm readers, not responsible to anybody.

Didn’t anybody explain the basic WallStreet rules to you.

Benny B. Printer of Large Amounts

P.S. We are not going into a Reccesion, we are entering a steep correction with the curved shaped of a bath tub.
Shouldn’t last longer than 20 years.

My new company “Rewards to the Good’ will offer you the FREE use of all the items these people bought with the found equity in their refi’s. As a partner in their bailout you in essence are part owner of all the goods! YIPEE you say? Just wait you can have a week at the condo in Palm Springs, a motor home you can zip to the Grand Canyon in, drive a Mercedes to work? Talk about style opportunities to show off to your friends just wait till you see the jewelry and clothes you can borrow.
Ah free market society, got to love it.

I see no reason why people should be getting bailed out.

I think everyone needs to default on all of their bills. It doesn’t matter if people lose their homes, cars, and other possessions. I see no point in paying companies back for money that was borrowed. The companies are going through rough times and there is no need to help them out.

I myself have no phone and I throw most mail bills away. The only bills I pay are rent and cable/internet. My credit cards, cell phone, car insurance, student loans, payday advance loans, and any other bills have been going on unpaid for a year now. I have money in my pocket and that is what makes me happy.

All of my firends are stressed out about being in debt. I constantly laugh at them and tease them. I quit caring and started drinking more alcohol. Debt takes care of itself.

I really do hope that some of the “we shouldn’t bail out the irresponsible individuals who can’t pay their mortgage” people don’t get get called into that meeting room in the far corner of the office. You know, the one they take people to when they are about to be laid off. It doesn’t take much for this crises to hit close to home people. We are all only a few paychecks (in many cases one paycheck) away from understanding the plight of the “lower classes”. Empathy is the most valuable “skill” one can have. Keep that in the back of your minds as you throw your stones out of your window paned house!

“You mean… you don’t think Mr. Bernanke reads this blog every day?”
Posted By Bing : April 2, 2008 4:52 pm

Oh, pardon me. I guess he does, because this morning he’s trying to soothe our nerves by explaining how the Bear Stearns deal isn’t a bailout.

Nice work, Stanley.

“I really do hope that some of the ‘we shouldn’t bail out the irresponsible individuals who can’t pay their mortgage’ people don’t get get called into that meeting room in the far corner of the office. You know, the one they take people to when they are about to be laid off. It doesn’t take much for this crises to hit close to home people. We are all only a few paychecks (in many cases one paycheck) away from understanding the plight of the ‘lower classes’.”
Posted By Ghanee, Washington, DC : April 3, 2008 10:10 am

Uhhh…wasn’t being one or two paychecks away from ruin supposed to be a clue that you couldn’t afford the McMansion?

I went freelance and moved 600 miles to afford a modest home in a decidedly less prestigious neighborhood and guess what? I can still afford it, even though this crash has wiped out most of my equity. Even if I get laid off, missing one or two paychecks won’t bring on foreclosure, which it would have if I had listened to the Irvine sharks and gotten in over my head.

I knew it was time to go when a boss told me I should work full time, then freelance enough after work to double my annual income so I could afford to sleep in a prestigious ZIP code…it’s not like I would have had any time left to see it in daylight.

BTW the CEO of that company, in the last round, called all employees at each site into two side-by-side meeting rooms. Everybody in one room got laid off, and everyone in the “lucky” room got to hear their friends wail in anguish. The CEO got a $1 million bonus.

I believe there truly are a few victims of predatory lenders or unpredictable, catastrophic events. But if you are in danger because you didn’t read the loan papers or worse, didn’t care because prices kept going up and that would save you, I have no sympathy.

Most people who are in trouble got there because the traditional path of putting 20% (or even 5%) down and later trading up from a small, fixer-upper starter home wasn’t good enough. They wanted the new McMansion (so did I) with a pool and a gardener and private school for the kids and a latte every morning on the way to work and dinner out every other night. They used their homes as ATMs to build home theater media rooms, travertine entryways and make sure there was a Humvee in the driveway. In short, they bought the whole “keeping up with the Joneses” sales pitch. Yes, they were greedy.

Why should people who played by the rules have empathy for that? The greedheads are depressing the values of our homes and 401Ks. We’re losing because of someone else’s bad decisions.

We have caught a nasty virus in this country in regard to finance. Right now, more than ever, leaders and consumers need to “call a spade a spade” and replace this wild spending and speculation with real underlying value. If the American dollar and American assets today represented what they used to historically, we would already own half the world outright, without owing any other country an uterly obscene debt like today.

OMG, do I need a drink after reading all of this. Doom and Gloom. Greed, stupidity, ignorance and the irresponsible. Shoulda, woulda, coulda. Bathtub curves lasting 20 years. ARMAGEDDON!!

It’s cost me over $100 to gas the Yuker over a month now. These responses are more depressing to me than that.

Forget the drink, fire up that wacky tabaccy.

OMG, do I need a drink after reading all of this. Doom and Gloom. Greed, stupidity, ignorance and the irresponsible. Shoulda, woulda, coulda. Bathtub curves lasting 20 years. ARMAGEDDON!!

It’s cost me over $100 to gas the Yuker over a month now. These responses are more depressing to me than that.

Forget the drink, fire up that wacky tabaccy.

Posted By Jessica, St. Cloud, MN : April 3, 2008 2:41

It’s not all that bad, remember 50 years ago everybody was struggling and trying to make ends meet, everybody was poor back then.

It will be just like a time trip with todays modern appliances.

Hmm Light one up for me too while I refect on this.

They should give out $600-$1,200 worth of wacky tabaccy to people instead of checks for the stimulus package. The economy wouldn’t matter after a few good puffs. I could just imagine a few hundred million Americans all stoned at the same time…

They should give out $600-$1,200 worth of wacky tabaccy to people instead of checks for the stimulus package. The economy wouldn’t matter after a few good puffs. I could just imagine a few hundred million Americans all stoned at the same time…

Posted By Yadgyu, Harkeyville, TX

Would not work, all the money would end up in B.C. or Mexico , it’s pathetic when even the drug trade has been out sourced, do you people still do anything in the US for yourself these days.

Thank you Mr. Bernanke, for punishing cautious savers like myself and completely trashing my rates of return on my bank investments.
Its good to know that you are looking out for the risky investor and not me, because I don’t deserve respect apparently.

We are all only a few paychecks (in many cases one paycheck) away from understanding the plight of the “lower classes”. Empathy is the most valuable “skill” one can have.

Ghanee, Washington, DC

I’ve got plenty of empathy for these people. It certainly sucks to be them.

On the other hand, I don’t want to pay for their mistakes, especially if I’m not getting something out of the deal other than retaining them as neighbors. Charity begins at home.

do you people still do anything in the US for yourself these days.

Posted By Jack Hammond Canada : April 4, 2008 4:43 am

Jack, you should get your research a bit more. 40% of all sticky is produced INSIDE the US, primarily in 7 states.

Hey, come to think of it, I think that’s the same stat on oil…Hmmm…..

Thank you Mr. Bernanke, for punishing cautious savers like myself and completely trashing my rates of return on my bank investments.
Its good to know that you are looking out for the risky investor and not me, because I don’t deserve respect apparently.

Posted By Rick Cain, Tulsa, OK

Dear Rick
People like you are the backbone of the country.
Why else would I let big business ride on you. You are the only one who can carry the load. You are appreciated just not respected.

Benny B. The mad money printer

Here’s a question to ponder: If George Washington and his cohorts were alive today, would they be considered terrorists? The actions that they took against the established Government would seem to me to be terroistic in nature? When do you cross the line between Terrorist and National Hero? And none of this “killing lots of people” flippant remarks, I KNOW that terrorist. But ponder the point…

Here’s a question to ponder: If George Washington and his cohorts were alive today, would they be considered terrorists? The actions that they took against the established Government would seem to me to be terroistic in nature? When do you cross the line between Terrorist and National Hero? And none of this “killing lots of people” flippant remarks, I KNOW that terrorist. But ponder the point…

Posted By Rob P. Panama City, FL

Heroes, Terrorists, Insurgents and Freedom fighters are all the same people, just seen from different vantage points by others.