Spring Break: How Fannie & Freddie Will Bail Us Out

I recently detailed the trouble that's coming for American home owners with the end of the recession (except not for us), the recovery of the big banks (but not commercial lending), the rise of the stock markets (but not jobs), and the likely further declines for housing as what little stimulus was being applied there (less than five percent of the total) finally expires. Now I'll turn to what can or will be done to fix this mess.

But first let me share what I was told recently by the managing partner of a New York hedge fund after reading my earlier post. "Unfortunately, I agree with you," he said. "However, in this Alice in Wonderland world, sometimes what is bad for Main Street is good for Wall Street."

There are three interested parties here -- big business and Wall Street, the federal government, and the American people. We got where we are because big business and Wall Street offered us cheap loans and we took them so we could buy that RV and put our kids through college. When the housing bubble burst, government protected big business and Wall Street, seeing them as essential to any eventual recovery. Government didn't do much to help the American people because Washington was too busy helping business and Wall Street, and we weren't going anywhere, were we?