Funny Money and how it will effect you

[liberal N proud]

This is a mainstream media article but it does point out some important things"

Impact of Wall Street bailout becoming clearer
Q&A: What this means for your job, your mortgage and your taxes
By John W. Schoen
Senior producer
MSNBC


What happened to all the money these lenders lost? Where did it go?
In many ways, it never existed. As lenders kept pushing mortgages to people further down the income ladder, they added buying power — based on credit, not real income — pushed up home prices much faster than incomes. Mortgage brokers pressured appraisers to inflate home values. Those higher values forced new home buyers to stretch further to buy a home; lenders were happy to sell credit to shaky borrowers.

The scheme was based on the belief that rising home prices would let stretched home buyers cash out their new equity and refinance into a new loan before low "teaser rates" reset, trapping them into loans they couldn't afford. When home prices started falling two years ago, adjustable mortgages reset to their true cost, and homeowners began defaulting and losing their homes to foreclosure. Those homes are being dumped on the market at fire-sale prices, pushing home prices even lower.

<snip>

Is there really $700 billion in bad mortgage-related investments?
No one knows. For one thing, these investments were not regulated: None of the Wall Street banks that issued them, nor the investors who bought them, have to report their holdings. More than $2 trillion in residential mortgages were issued annually at the height of the boom earlier this decade.

It’s also impossible to put a value on whatever investments are out there because there’s no open exchange for them to trade on. Even if there were, each bundle of mortgages is different, so it’s hard to compare apples to apples.

What’s all this going to cost?
No one knows that one either. A lot depends on what kind of deal the government strikes when it buys up these bad investments. If, for example, the Treasury buys them for 60 cents on the dollar, and they end up losing more value, the Treasury eats that loss.


Is this going to raise my taxes?
Most likely.

http://www.msnbc.msn.com/id/26837854/


Raise taxes, hmmm, Then if Obama is in the White House they will have that to use against him in 2012 and any Dem beyond. That is if there is still a United States of America in a democratic form after this.