financial crisis (part what? like, 38?!?)

you know, i have read countless news and opinion articles and blogposts over the last several months about the financial crisis, bailout and other related issues and yet, i still find it confusing. for that reason i have been making a conscious effort to grasp what i consider the most important and yet simple concepts and ideas about it all.

one opinion i have formed and am passionate about is that our current woes have been caused by credit default swaps at least as much and most likely more than by bad mortgages. in spite of my ideas, it seems obama's appointment for treasury, tim geithner, has an agenda which involves bailing out aig and bear stearns to the detriment of some smaller institutions, which were nearly solvent and based on behaviors, likely deserved to be protected more than these. if you want to get into the details, read this article. or, you might even read this blogpost, which actually pointed me to the other article in the first place.

reading the blogpost from oxdown it occurred to me that when numbers start being rattled off i get completely lost. these numbers are just too big for me. i guess it is because i cannot relate to them that once several of them appear in succession, i lose all context. so, here is the thing... (talk about burying the lead.) that main article is advocating the idea of declaring credit default swaps illegal and in that way, providing zero protection for them. this would certainly piss off a lot of influential people, (read: people with money, money invested in swaps either as protection buyers or protection sellers,) but it would be the best thing to do for the economy.

that said, obama's appointment of geithner, (along with the fact obama voted in favor of the initial bailout,) foreshadows the fact that what is best for the economy will not be forthcoming any time soon. it is disappointing obama, geithner and the american public at large do not have the will and fortitude to do the right thing in this case. that said, i believe it is true that politics is the art of the possible, hence why i voted for obama. it is likely this is not really within the realm of the possible (in much the same way ralph nader for president was never really in the realm of the possible.) still, we need to move in the right direction so that the political will to do the right thing exists in the (near) future.

addendum: processes and discussion abound for helping at risk homeowners but action is at a serious premium. read about it here.