My goodness!!! $1,000,000,000,000 bailout!!!!!!
The biggest joke regarding this fiasco is that few people in power are willing to accept blame for this. The CRA, Community Reinvestment Act, from the Carter administration created a system whereby banks would be coerced to make bad loans in order to be "fair" to those unable to secure a traditional loan. The banks did as the act demanded and soon held a lot of bad debt.
Fortunately, our friends Fannie Mae and Freddie Mac were there to help those banks out by buying those loans and repackaging them as investments. Soon, brokerages were buying them and the loose monetary policies (low interest rates) of the Federal Reserve fueled the whole mess to the stratospheric heights from where we see it come crashing down. This was not a regulatory failure. Our government made a system of the CRA, the secondary mortgage market and the Federal Reserve which fueled the sub-prime (ill advised) mortgage market. It was not a lack of oversight by our government, but the creative intervention by our government to make the mortgage market into something it was not supposed to be, a social engineering program.
* Fannie Mae and Freddie Mac are private corporations created by Congress to create the secondary mortgage market.
* The Federal Reserve is a privately owned banking cartel sanctioned by our government to create dollars out of thin air.