Adnrea

Nationalization of the U.S. Mortgage Problem

I think you're missing a key component here, another Depression Era bill - Glass-Steagall. The separation of banking and investing worlds brought about with that Act was demolished in 1999 with Gramm-Leach-Bliley, which I didn't like back when it was being discussed, didn't like when it passed, didn't like when Clinton signed it, and haven't liked as I've seen the banks and brokerages become intertwined over the last several years.

The bottom line is that anyone in government who says they didn't see this coming is flat lying. They needed this fake affluence from inflated home values to keep people spending and now it's come home to roost. The GSE's were between a rock and a hard place as their mandate was to increase home ownership, but there were points over the last several years where our public servants could have stepped in and didn't because it wouldn't have been all happy faces and warm fuzzies.

And now, LEH, MER & AIG? All mortgage related and probably too big to fail (B of A definitely will be soon). Socialism, indeed.