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"Foreclosure filings last month were up nearly 50 percent compared with a year earlier, according to one company's count released yesterday. Nationwide, 261,255 homeowners received at least one foreclosure-related filing in May, up 48 percent from the same month last year, and up 7 percent from April"  Realtytrac.com.

The figures above reflect a truly miserable situation in the everyday life of Americans. Before the property is actually foreclosed upon, the utilities would probably been off for 3 months or so. No light, no heat no water.This is the reality that the Fed is ignoring as it hands out money hands over fist to the very organisations that caused this untenable situation.
Not only is the Fed failing to address this misery in their midst, they would actually seem to be actively exacerbating it.

Let's look at what has been going on in the last few days with the Economic stimulus package proposed by Paulson...

So far, the Government handouts have been given to banks with no strings attached such as easing the burden on householders who still just about are in thier home. That decision is totally up to the Banks. They were "encouraged" to help avoid preventable foreclosures. Their unsurpassed generosity in this regard makes Scrooge look like a philanthropist ! Funny, I don't remember any hesitation or malingering when Paulson was trying to get the Bailout Bill out as fast as he could. His main priority was and always will be the Banks and the financial houses, with whom, he has a long standing relationship.
When Sen Richard C Shelby asked "Why aren't you insisting that they not hoard the money?" the only response was that if there were too many strings attached to the financial offerings being made to the banks they might not enroll in the program. Let me get this straight, banks are going to snub their noses at a free handout from the same people they are throwing out of their homes and just might say no because they might have to give a tiny amount of it back ? Please !

So basically what the banks got was an FDIC backed guarantee scheme where the loans were guaranteed by the latter. There was no guarantee that the homeowners would be actually given the funds to help them pay off their mortgage which, in theory, would give the Banks the cushion they were asking for. So the point to take home here is that the taxpayers own money has been taken from them and given freely to the Banks so that they feel all warm and fuzzy while the Homeowners themselves still face the high probability that the Bank will cut them no break at all and end up with a far from warm and fuzzy feeling as they pitch their tent alongside the ever growing numbers of others who have fallen prey to the Credit establishment.

Criminally negligent mortgage packages were used to entice buyers to chain themselves to bricks and mortar while their jobs were being exported overseas.

Adjustable rate mortgaes, Interest Only mortgages were given the heavy sell to overoptimistic buyers who were assured by Governement and Wall St that they had nothing to lose as property could only increase in value.They were set up for the fall as Interest rates were reset just around the time that property values were sliding downhill fast. The owners who had interest only mortgages or ARM's suddenly found themselves with negative equity in their homes and hugely increased monthly payments with no access to more credit to pay the bills.
Adjustable rate mortgages weredesigned to have exactly the same result; Get the Homeowner to leverage himself lighttly at the start with the sting in the tail just far enough away that they would not really think about it.If this sounds like a setup, then you'd be absolutely right. Can you say  "Destruction of the Middle Class" .

But the most destructive part of this equation was the packaging up of the Mortgages in to Hedged derivatives, the result of which we are seeing now. But the guys who created and dealt with these Frankensteins have already made their fortunes with them and are not exposed to them anymore. Sure their Bank might fail and bring down a dozen others with it but, Hey, they already have the tickets bought to the Bahamas.

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