What color is the sky on your planet? We’ve turned the corner? Which corner is that?

Yes, commodity prices are correcting. Crashing…I don’t think so. You obviously don’t know bubbles when you see them. Commodity prices had been rising because market speculators started piling in once the word got out that commodities were HOT. Now they correct for a little while while everybody piles out and moves to the next “big” thing. What that is, is anybody’s guess at this point. But mark my words, once the speculators get trapped in their own wrong way bets, they will once again pile into commodities as a value play. Gold, Oil, foodstuffs, etc will skyrocket yet again. This is classic “bear market” gyration activity. The actions of the Federal government have clearly shown that the financial markets are severely broken. What else would explain the constant interventions necessary to “save the day”? Folks, we are in for a long world of hurt BECAUSE the government is interfering with the necessary processes that NEED to happen to clear out all the bad financial decisions that have been made over the last decade. This mess isn’t going to get cleaned up overnight. Look at the stock market activity, it’s literally STUPID, UP 200 points one day, DOWN 200 points the next. This is not a sign of a turned the corner economy. The market desperately needs to be purged of all the bad debts that are still sitting out there buried in the balance sheets of banks, hedge funds, investment houses, etc. All the buried bodies have not been found yet. My guess is that 50% of the bad $$$ has been exposed, that leaves the other 50% still to come into the daylight. NOBODY wants to see it, much less acknowledge that it’s still out there but it is. The financial industry has grossly overlevergered itself and all those CDO’s, derivatives, etc, etc need to still be purged. It is going to hurt, and hurt bad, but there is never GAIN without PAIN. Why is the government stepping in so heavy handedly?, because they KNOW what’s out there and it scares the living SH-T out of them. They are also running out of magic silver bullets to kill the werewolves too.

It a’int going to be pretty here for the next 1/2 dozen years going forward. Foreclosurs will continue to rise, wages and incomes will continue to shrink, which will exascerbate the housing turmoil (who is lining up to buy overpriced houses anymore), food prices will continue to rise, energy prices will continue to rise. Inflation and deflation have both found comfortable niches in the US economy and until prices adjust to wage income, the system will remain out of whack.

Turned the corner…I don’t think so. Not yet, anyway.

Does this “takeover” put any additional money into the hands of failing mortgage holders? … No. Mortgage failures and foreclosures are still red hot and going to get hotter.

Does this “takeover” really stabilize the mortgage markets? No. Houses are still grossly overpriced compared to the ability of the common man to be able to comfortably afford, so until the price to earnings ratio of the common man gets back into alignment, the mortgage machine (and industry) will continue to remain broken.

Will this “takeover” be kind to the holders of the common stock of Freddie and Fannie…Nope, they’ll get wiped out. The regional banks holding the stocks will be hit hard too.

This action will have a decimating effect to our economy for a long time. Hank Paulson has openly shown that the US Government is BANKRUPT (morally and ethically) and took this action strictly to guarantee our debt to foreign nations (lest they dump our Treasury bonds and very suddenly sink our feeble economy into a DEPRESSION level economy). Remember, the US Government has NO MONEY whatsoever, the government TAKES money from it’s citizenry, and/or creates (with the printing press) money out of thin air (which destroys our dollars value BTW), so in effect the government is mortgaging our nations future (our children’s future) with their bull headed actions of today. We are in for a long period of economic malaise, unfortunately.

FYI: I am an optimist (more of a realist) and we will as a Nation ultimately recover, but it’s going to be a long slow period of recovery with many, many years of just muddling through. Sighhhhh!

It’s no fun at all watching my 401K drop 22K in value in the last 2 months. So much for the strong “performance” on Wall Street.

Every way I look at this credit ‘crisis’, what is good for Wall Street is bad for the rest of us.

Second, in response to your question, yes, this event will probably put a floor under the equity and debt markets in the USA and may put a floor under the economy, too.

And, last, I want to ask for your help: try to educate other journalists to stop calling this event a ‘bailout’. With the way that media personalities throw around the terms ‘bailout’, ‘crisis’, ‘crunch’, ‘meltdown’, etc. you’d think there was an election in progress or something ;-} . This was a takeover (your word), takeout or takedown, but hardly a bailout. Both FNM and FRE closed today solidly below $1, just a stop on their way to 0.

Congratulations to James Lockhart and Hank Paulson for having the guts to go in, kick ass, and clean house. They had to kill a little bit of disfunctional capitalism to save the rest of it while the system is still barely alive. But, based on what I’ve read so far, we the people the taxpayers will probably make money on this deal.

We have a great country, but the next president and congress are going to be very busy trying to rehabilitate the barely-alive US capitalist system.

You are a doofus. You have no concept of economic principles and should stop writing about anything financial.

Have you ever considered writing comic books?

Henry has just declared that Fannie and Freddie are both BANKRUPT, that the US has just absorbed that debt (doubling our National Debt in one fell swoop) and you think that that is a Good thing? Dumb!

What can we all expect when we have the most fraudulent banking system on planet Earth – namely fractional reserve banking of fiat paper money, with the evil Federal Reserve at the head of this Beast?

This may be the beginning of the end for THIS little “crisis,” but hang on to your hats when the Federal government eventually stops being able to borrow money to buy votes, and gets exposed as the $60 Trillion debtor it really is !

There is no way I am buying now – not when there is so much more depreciation coming our way as the supply continues to trump demand.