>>>>>>>>It could get worst than that. John McCain gets elected. He dies shortly after and Palin becomes your President. Be afraid... Be very afraid
>>>>>>>
>>>>>>>Or even worse - Obama and his 140 days of senatoral experience gets elected and starts driving financial policy!
>>>>>>>
>>>>>>As it stands now 'financial policy' is a competition in spending. One guy asks for $700B and many others say: No! It does not protect US taxpayers in adequate way. We should spend $800B and it will be much better (probably for taxpayers). I think that Obama experience fits nicely to this picture.
>>>>>
>>>>>It does sound that way. People should look at this as a preview of Obama spending style.
>>>>
>>>>Frankly, I still hope that one of candidates (e.g. VP candidate) finds some guts to call this 'bailout' and/or 'stabilization measure' the way it really is: blackmail and selling out whatever left from free market (and undermining freedom, in general) to prop up couple WS names and spending couple hundred billions on the way, so elected representatives from both parties could feel better.
>>>
>>>Oh, come on. The free market is at the moment FAILING UTTERLY. Even Alan Greenspan says this is the worst economy he has seen in his lifetime, "by far." Something has to be done.
>>
>>In general, I don't think that people responsible for liquidation of free market, i.e. government, should:
>>1) Blame free market for their own actions.
>>2) Put in charge to fix and make free market improvements.
>>Specifically, this whole thing started when Freddie & Fannie got created. It gave every mortgage banker good excuse to make any kind of loans because F&F were going to buy these loans no matter what, i.e. without looking what is this loan about, who borrows the money etc. What kind of outcome may come from this great business idea? Perennial and recurrent problem that got 'fixed' by throwing billions of dollars out to plumb next hole. The most shameful part is that these free market fixers may always count on crowd chanting "something has to be done", and having no shame and lot of hypocrisy to blame free market for this. Please, note, that this crowd never concern itself with a question what should be done. They readily delegate this difficult part to Washington insiders with experience.
>
>I agree with you that a big part of the problem was the creation (actually the privatization) of Fannie and Freddie. As you say, the original lender is able to book their profit as soon as they make the loan and spin it to F&F. They have no vested interest in insuring the loan is a good one, i.e. borrower capable of repaying even if there is a downturn. Borrowers are equally culpable, spending beyond their means in blind faith that rising prices will carry them through. What we have now is a perfect storm of underwater loans and in many cases underwater borrowers.
>
>Your faith in the free market seems greater than mine. I think we are seeing all too clearly the danger of a market with insufficient oversight. If you want to say the government should have provided more oversight, I'll agree with you about that, too.

The only oversight needed is an oversight over government. You seem to be praying to the wise and mighty government that will solve all problems. Governments are made of people, called bureaucrats if you don't know, who have neither vested nor any other interest of solving anything except securing their position on top distributing money and services to prols. Your idea about more oversight fits nicely to these scheme.