There are healthy banks out there, especially outside of New York. They are doing pretty well given the magnitude of the mess. They are financing new tractors, covering the inventory ’til the end of the month, depositing my receipts and giving me cash when I ask for it. My local banker is still the best analyst I know on conditions in the local market, and what I need to do next in my business.

Contrast that to Wells Fargo and BofA where they admit that they had people do mass signatures of critical legal documents because the management couldn’t be bothered to spend the time doing it right. Forcing these guys to go back and jump through every hoop, pay every fine, and absorb the losses will be instructive to them and beneficial to the country.

It has mostly been repaid. Fannie and Freddie will be very costly, but then they weren’t exactly bailed out — they were practically nationalized.

So when you add up the net cost of all those bailouts, how does that compare to the ongoing cost of the Bush middle class tax cuts? The whole mess has been very expensive, but it is silly to pretend that the government has ignored the middle class while lavishing trillions of dollars on the banks. If anything, the reverse is true.

/sarcasm off

I don’t know what you mean by “all that money from the Treasury/Fed”. The government has been running a trillion-plus deficit, putting the majority of that money into the hands of the middle class through the Bush tax cuts, unemployment benefits, Social Security/Medicare/Medicaid, and similar programs. The “bank bailout” money has mostly been repaid.

Moreover, the biggest reason we are not out of the woods yet is that the stimulus actions have prevented us from hitting bottom. That is trading a sharp crash (admittedly one that could have been truly devastating) for a prolonged malaise. Look at the unemployment rate, housing prices, and the oversupply of housing, and you see an imbalance that will take several years to play out. There is no hope of a quick recovery from this, there has never been such a hope.

I realize that blaming it all on the banks is popular, but the general public played its part. Nobody forced people to overextend themselves on credit. Nobody forced them to overpay for houses, borrowing 5x their annual income and more. Nobody forced them to play the fool. Do I sound unsympathetic? Maybe, but so what? Does it really matter whether I’m sympathetic or not? THERE IS NOTHING ANYBODY CAN DO AT THIS POINT BUT SURVIVE WHILE THE SITUATION SLOWLY REBOUNDS.

I fully agree that Wall Street will find new ways to exploit the ignorant, new ways to ruin our economy. However it will play out DIFFERENTLY from the last cycle, as it always does. It isn’t the danger that we see coming that ruins us, it is the danger that everybody has forgotten about. And that is why THIS danger isn’t going to be a problem for another 30 years (or longer). People will remember for at least that long.

We (I can say we, you had/have an effect the world and this crisis affected me, my mortgage and my pension/RSP funds very much) are not in any danger of a repeat of this mortgage mess for at least another generation? You and the rest of the world will not even be OUT of the mortgage mess in the next generation. And there is still a very good chance of a real crash, because believe it or not the stooges who said it was all over were wrong. And who will resolve it? the banks???

Had all that money from the Treasury/Fed been put into the hands of those who really needed it to get the economy working, the crisis would have been over long ago! yet it was put into the hands of those who helped fuel the problems in the first place… people know that TFF and they will be claculating once the shock is over. And they won’t be happy…

Treasury is going to have to sweat because at some point, the people will understand that at the root was bad Government policy, fiscal mismanagement, lack of regulation and disregard for the taxpayer and mostly, disregard for the law. (and that was begun by Bush but Obama’s watch is also ineffectual)

The Governemnt has intervened already in favour of the banks. They want it all to go away. But in doing so it is at the expense of pensioners and homeowners and those who were actually hurt by the crisis. Governments and banks are sitting pretty saying there is no crisis just a little misunderstanding with some paperwork. That was intervening to placate via the press.

It may take some time, but at some point, a group with a great lawyer is going to successfully enforce the buyback clauses of the AAA securities. Pensioners who lost 1/3 or more of their pensions will be looking for help. The houses that are being robo forclosed upon are sitting and more are homeless. There are no new jobs and the the Fed/treasury will keep churning out money to add to the debt. People are running out of hope and the Government will have no choice but to intervene.

The Government was part and parcel of the mess… and they should be concerned about trusts, securitization and the law.

Michael Barr was a Govenment spokeperson in this matter. Why is it OK to make promises to placate the complainers, when you have no plans on even staying to see it through?

And lastly TFF, unchecked greed and the Capitalist need for speedy money will ensure there are TEN more ways to rip off the the ‘willfully ignorant.’ It’s happening right now as the SEC simply can’t keep up and will those who helped make the new regs be hired as consultants so they can be skirted and loopholes found? Of course. Why would anyone stick around to actually see it through when it won’t do what it was set out to do…

The government has the obligation to assure that all laws are followed. The Treasury review is targeted towards that. It is NOT designed to repair the relationship between investor and trustee, or between trustee and servicer. Those relationships should be negotiated between the affected individuals, not dictated by regulators.

A common response to that is, “Look at the mess they created when left to their own means!” But I would suggest you are closing the gate after the horse has already scampered. The caution of MBS investors over the coming decade will exceed the degree of willful ignorance that they displayed over the LAST decade. There will be further banking crises, but the next will assuredly take a different form than this one. We are not in any danger of a repeat of this mortgage mess for at least another generation.