[Lucius Cornelius Sulla]

Everybody forgives everybody else’s current debt.

Since debts are the assets of banks that would wipe out all banks, all bonds, and all government bills and notes. Not the best plan.

[kc8ukw]

Oh, come now, that’s just pessimism speaking. :)

[JennysCool]

No, see, the banks wouldn’t owe other banks. They wouldn’t even owe the coffee shop tabs for their employees.

Everybody starts at zero!

ONLY THE STRONG SURVIVE!!!

[Danae]

I agree with you. Wiping out all debt would be the wrong thing to do. Eventually the markets will correct themselves, over time. The whole Mortgage bail out thing, I just spoke to my Mortgage Broker, very knowledgeable lady. She explained it to me, the bail out for home owners looks like this, I will use a hypothetical:
Current owing mortgage 400K Payment: 3000/mo
Real current Value 300K
Difference 100K This is subtracted from Owed balance
New Payment is then based on the lower 300K number, the 100K is not subject to interest ( at least as far as she has seen yet) the 100K is STILL OWED, you just aren't PAYING on it. That amount is still owed! This will lower the payment for the homeowner, WITH OUT bailing out that homeowner! Or just giving him 100K. If the house is sold, that 100K MUST be taken into account and repaid along with the other 300K.
This is how its been described to me from someone who is most certainly very experienced in these matters and has the information from HUD and the Fed Gov on whats happening.

It brings up a question however.... if they are simply taking out a chunk of the Balance to temporarily lower the housing payments, then WTF is that 700Billion going FOR? Because the difference between the new payment balance, and the REAL balance owing is just being held out, you aren't paying ON it, but it still exists.... So where are all those Billions going??? I am hoping someone smarter than me can explain that part.

This begs another question.... let me frame it.... Houses are not selling, that's a given, How do they reappraise a house to a lower level when houses are not selling? No one knows where the bottom IS, what the new lower value is. It could be 100K, it could be 200K, no one knows because no houses have sold to give a baseline.... How do they do appraisals in a DOWN market?