This is a very difficult problem. The candle is burning at both ends. To begin with, LACK OF REGULATION allowed the unscrupules to market securitised mortgages to the unwary - thus transferring "risk" of default to third parties, thereby getting out from under. This killed the motive to be careful. Now we have a Gordian Knot. It is appropriate to slice right thru it, as Alexander did, way back when. However, it is not enough to cut the knot, it must also be retied. Alexander didn't have to do this. To fail to do this well risks economic collapse - because there is nothing except faith beind the Dollar.

If Faith fails, we will have to start using real money again. This would make deficit spending difficult. Therefore it is neccesary to reinstitute a COMPLETE, not a partial, regulatory structure. One that reaches all the way to the ground. One that looks and feels solid. Not just to lawyers and investors, but also to hammer swingers and shovel operators. Everyone should be able to see exactly how it works, so as to derive from familiarity with the system confidence in the system.

It is an appropriate time to revisit, review and reorganize the entire regulatory structure of the entire economy. This is not a time to simply apply a patch and try to get a little further down the road. The lessons of the day are:
1/ That war is very expensive, so you shouldn't have one if you don't have to.
2/ That tricks do not work. Some folks rob you with a sixgun, others use a fountian pen, and of the two, the more honest holds the gun.

These lessons need to be honored and incorperated into the Law. Criminals should have thier fountian pens taken away. It should be made plain to all that this has happened. Confidence building can start with:
1/ Break ARMS. No more adustable rate mortgages. Not even those already written.
2/ Do your own laundry. No more securitization of mortgages. You make a loan, you keep it. If it goes bad, YOU lose, not a third party.
3/ Refinance EVERYONE, at the same time, without option, without fear and without favor. This is the other end of the candle. Every home loan in the entire country should be reset to the same, low (5%?), interest rate. The banks and investors will hate this, even tho the Principal remains the same. Fuck 'em. We are not cows for big business to milk. Moreover, there are a heck of a lot more homeowners than (FED INSURED) banks. Each of them will vote for you.

This is just a start, not a complete program. And it goes on, that-a-way ===>

I appreciate this forum.
FF