$700,000,000,000 rant from a simple man

Ok, I'd like to take a moment to rant. So, we are in the middle of a pretty significant financial crisis, some of which is pretty complicated but I get the gist of it:

1. Rampant increase of sub-prime lending for home ownership, partially due to the US HUD mortgage policies and other incentives to increase home ownership. Fannie and Freddie are wrapped up in the mix providing very high risk loans because they have the US government backing them (partial ownership). Other mortgage companies follow suit, often with low initial interest rates that balloon after a few years. High availability of loanable funds and lax restrictions on sub-prime lending cause lots and lots of high-risk loans.
   
   Translation: Lots of people own houses that they can't really afford.
   
   
2. Investment firms jump in on the action through a process called securitization where these mortgages are bought up, packaged, and offered as collateral to 3rd party investors. Now, the details of this process are pretty fuzzy to me, but it seems that everybody makes money in this deal as long as housing prices continue to rise and people continue to pay their mortgages. No reason that won't happen, right?
   
   Translation: The financial sector is playing the hot potato with mortgages.
   
   
3. The price of oil skyrockets, followed by food and fuel. The cost of living rises faster than the average income.
   
   Translation: Everything gets more expensive.
   
   
4. Housing market takes a tumble. Prices fall dramatically. Now those who can't afford their houses (nor gas, food, etc.), also can't refinance because their house is worth less now then when the first bought it. No one will buy their house because there is a housing surplus, thus eventual foreclosure. The more foreclosures, the more surplus of houses in the market, the lower the prices fall.
   
   Translation: Bub-bye home.
   


5. A number of large investment firms, not following their own advice of diversifying their portfolio, were significantly leveraged in the mortgage-backed securities market. De-regulation on the amount of debt investment firms could hold and the riskiness of their investments didn't help. The majority of their profits (and losses) were tied directly to the housing market and when that crashed, so did they.
   
   Translation: Bottom fell out. Big guys tumbled.
   
   
6. Now everyone is in a panic seeing all these large investment firms fall, causing stock holders to selling their assets at a pace comparable to what was seen after the attack of 9/11. "Sell, Sell, Sell" is heard globally. Anyone who had anything in the market lost big. I am still scared to see what is left of my 401k.
   
   Translation: No retirement for you Bob. No college for you Jimmy.
   


7. Everyone gets scared and hoards there money. No trips to Jamaica. No new car. Mac and Cheese for dinner instead of Outback steak house. Now other companies completely unrelated to mortgages or investment firms are feeling the pinch and are forced to reduce cost and overhead so that they can weather the storm. Many are spending their mornings in the unemployment line.
   
   Translation: No customers = no profit = cut costs = layoffs
   

Ok, so here we are, hours after the largest government bailout in history, $700 billion approved to buy up troubled assets from banks, and I am still scratching my head and trying to figure it out. Seems like an awful lot of taxpayer money to dig folks who made a lot of poor decisions out of a hole, but I guess I will leave that up the the economists to figure out.

But what REALLY chaps my hide are some of the smaller print items around this. For instance:

• "Limiting compensation to executives of the failing companies".
  
  LIMITING??? What? I am pretty sure that if, in the course of my job, I managed to lose several billion dollars causing my company to go under, they would not be sending me packing with a compensation plan. I'd probably be in court being prosecuted for fraud. Why in the world would we reward these guys for anything for poor judgement? Oy...
  
  
• "Treasury Secretary will have the power to take depressed securities backed by credit card debt and auto loans off banks' hands."
  
  Woah, now. Wait a minute. I have been busting my hump for years getting rid of credit card debt, working overtime and late nights, kissing up to this boss and that boss. Now because a few folks defaulted on mortgages, I have the honor to pay for others credit card and auto loan debts? I am having a hard enough time trying to figure out why I am paying for people buying houses they cant afford and now you are telling me I have to pay for their car, their Wii, and their trip to Florida too? Sweet.
  
  America, please put the "Pre-Approved Credit Card" application down!
  
  
• "Bailout Bill Laden with Earmarks"
  
  Hrmm.. Ok, so $700 billion is not enough to put into the hands of the treasury secretary to right the sinking ship that you need to add earmarks to it? Well, let me read them with an open mind. Perhaps they are legit, or somehow related to the bailout:

That's it. I quit. It's Friday and I am starting to feel VERY thirsty..... ;-)