>>>>Without the government actions, which indeed will have to be paid by the citizens, things are even worse, american dream or not.
>>>
>>>Because of previous government actions, which are now being paid by the citizens, things are much worse. With the new government actions, which will be paid by the citizens, things will be even worse...delayed, but worse.
>>
>>Please explain... Here in europe, much has done to prevent banks falling. Because of the stock market and it negative sentiment some normally healthy banks were in trouble because clients ran away out of fear the bank would fall over. The government took action to assure those banks still could operate. The injection in european banks is many times bigger than the us did.
>>
>>The alternative would be that normal citizens would lose their savings and small to large companies would go broke because their bank went down. This would leave Joe Doe with the bill which would be much worse than the govermental actions in safegarding those banks. How would you feel to see you company, which you worked upon your whole life, go down because of this? If you believe this is the responsibility of the individual, don't you think the government should not guarantee 100.000 dollar when a bank goes down?
>>
>>I know that most americans are against spending tax dollars on anything except their own matters. The sentiment up here is that that this extreme version american of american capitalism is dead because of the greed of the very few. Time will learn.
>>
>
>The sub prime meltdown at the heart of the current financial mess is the direct result of regulation changes enforced by the government which made sound and time-tested lending practices illegal. The problem was compounded by a regulation change which allowed these new mortgages to be bundled and sold as a security. As such the lenders had no stake in the validity of the loans. Hence the greed, corruption, bubble and meltdown.
>

There is certainly something to that, just as there has been greed on the part of consumers who got themselves into mortgages they couldn't afford except under rosy scenarios. As far as bundling and securitizing mortgages, though, that has been going on for a long time. It took me a while to figure out why every time I took out a loan I got a letter from someone else a few months later saying to pay them from then on. IAC I thought default credit swaps, not ordinary mortgage bundling, were the new wrinkle that helped precipitate the meltdown. They're certainly what got AIG in trouble. (One office in London, according to the NY Times).

Yes, all this stuff should have been better regulated. I certainly hope it will be now.