I cannot believe a single one of you; left, right, center, green, dem, repub, whatever... (including YOU, TT) has asked THE MOST IMPORTANT QUESTION!!!!!! What percentage of the defaulted loans driving this crisis are OWNER OCCUPIED single family dwellings???? OMFG, people!!! We are NOT talking about Sam and Sally Smith of South Bend, Indiana who bought a house they couldn't afford and now decided to simply not pay. We ARE talking about flippers and speculators walking away in droves from properties they once thought they could turn for easy profit. The "infinite horizon" of property value isn't infinite after all, oh invisible hand.

These "creative" financing schemes were specifically used by people who didn't intend to LIVE IN the properties!!!! Why care if you pay nothing to principle, have adjustable rates, or a balloon payment if you're only going to own the home for three months and turn it over for a 15 thousand dollar profit due to appreciation??? DUH!!! The significant majority of these defaults are for homes that were/are already vacant and new-builds that have NEVER been occupied.

Please see the CNN news online article "Flipppers Fuel Foreclosures", dated 8/30/2007. PUH-LEEZE stop buying the MSM propaganda that this is somehow the fault of "stupid shiftless poor people" who decided to stop paying for the most important thing they need to live: the roof over their head.

The bailout, just like the one for LTCM in 1998, is a horrible idea. Those responsible for simply walking away without paying are ACTUALLY protected incorporated speculative entities (translation: before most of these people started real-estate speculating, they "incorporated-just-in-case" so that their "corporations" could go bankrupt, not they themselves personally!) who are doing so WILLFULLY, with full knowledge that those they do not pay will be bailed out with our tax dollars.

And you're all fooled into thinking that poor people with what meager economic influence they have, are about to tank the world's largest economy? Seriously? That flew under your radar? And we, the privileged, oh-so-smart, internet-savvy Salon-readers, have been sitting on our spotty probably-too-big butts talking about how easily duped POOR PEOPLE are. Uh-huh.

We deserve what we're about to get...

In 2003, my husband and I bought a modest 1200 sq.ft. home, built in 1928, in a "transitional" working-class urban neighborhood. (read: not getting better, but not really getting worse.) It is our first home. We were offered different types of mortgages, but I held out for a 30 yr. fixed, and we paid down points because we didn't have a standard down-payment. (as an aside, there was no lawyer present at our closing...)

We are making our payments just fine, thank you very much. We expect to continue to do so until such time as one of us is incapacitated or some catastrophic occurrence makes us otherwise unable. We made sure to choose a home priced well under what we were told we could afford. We did so because I have Multiple Sclerosis, and in the future obviously it may change our financial circumstances.

The superiority complex of some of the posters here... the way they discuss others whose lives they know nothing about... It makes me absolutely OVERJOYED to know that when I was 22 and was diagnosed with a brain tumor straight out of college, I spent nearly 200,000 dollars of YOUR money getting healthy, on the public dole. I hope you choke on the thought of it, you greedy jerks. Here's the funny (not ha-ha funny) part: I'd STILL happily give my fair portion to make sure YOUR child made it through that same experience, though you'd begrudge it to me & mine.

Perhaps Libertarian children are worth what the market will bear? If their parents didn't plan for the "brain tumor contingency," like all responsible rational reasonable people should, (and are, of course, perfectly capable of doing if they just stop being so lazy and work, work, work harder) then, sorry, Skippy, it's six months to live for you!

In any case, Tylonius, your point is spot-on. Those of us who pay our note to Countrywide each month are not just slack-jawed stooges who feel entitled to own homes. We live in our houses and intend to keep them and keep paying for them. This crisis was brought about by the same type of people who thought day-trading was a super-duper extra-great idea in the late nineties -- gamblers using a different stake but the same marker: us.