And, in the end, the Feds will pay for all this with printed money. Meaning inflation.
Yeah right...
What you mean is the Fed's will print more money and we the people will pay for it via a government financed country wide rectal?
I'm not so sure. The money was created through fiat, and loaned out into circulation. What is coming back is a debt that can't be repaid, because the money has effectively dissapeared. So if they just forgive the debt, the fiat money disappears, and we deflate our way out of the problem.
We now have an oversupply of banks that the new deflated money supply doesn't need.
Likely. The other alternative is for the fed to restrict, and deal with a deep recession. Perhaps towards the end of the Bush administration, the Fed will choose to take the recession now, like at the end of the Klintoon administration when the dot-com bubble broke, and like at the end of the George HW Bush, administration when a shallow recession was parlayed by the leftist media as another end-of-the-world scenario.
I think there's more coming. Banks and brokerages, insurance companies, pension funds, public corporations, endowments at colleges and other not-for-profits have these subprime backed mortage bonds on their books to varying degrees (bonds that were rated AAA by the Wall Street/Rating Company money machine), and they are being marked way, way down or their value is unknown.
I know Greenspan gets alot of blame for the easy money. Perhaps, but I think Wall Street and the rating companies, combined with lax lending standards and enormous greed all the way from Wall St. down to the "flip this home" crowd are also at fault.
If you ask me, it comes down to greed and selfishness. And a lack of sensible regulation. We have capital standards for banks that have FDIC insurance. Its not too much to require mortgage borrowers to prove income and ability to repay the loan, since Fannie Mae and Freddie Mac were backed by the taxpayers.