[Tublecane]

I’m sorta beyond despising Bernanke by now. After all, the original justification for the Fed was to pump in money and bail out rich people when they were in a jam (thanks a lot, J.P. Morgan). Why should I expect anything different now? Darned if I’m not turning into a fatalist, but so long as we have a central bank, we’re doomed to more and more bubbles and more and more downturns.

[Mr. Bird]

I am no financier, and have a layman's understanding of how macroeconomics works. But it seems to me the underlying issues that have created the current crisis are telling us exactly how to solve them. Unfortunately, it seems the proposed solutions are going completely against that intuitive inclination.

I am now hearing that Paulson (et al) is floating the idea of improving loan terms for borrowers in peril. This is a very good idea if you wish to abandon the principles that we have not only built this country on, but the principles of common sense.

Someone slap me and tell me where I'm wrong: any governmental assistance is essentially a reward or incentive for prior behavior. We are now hearing that borrowers in distress may be able to refinance at low interest rates, and first time buyers may be able to take advantage of these rates. How is this any different than what got us here in the first place?

Would it not be more prudent to provide favorable conversion rates to prime borrowers, freeing up more capital to gobble up the distressed properties? And when I say "gobble up", I mean invest in, leaving willing dwellers in place.

Saps like me are current on payments and refuse to bail on obligations, even if we may be underwater or close to it. If there is relief to be had, entice me with investment opportunity. I'm overpaying (from a point-in-time perspective) for my sole real estate investment, but I'm living up to my commitment.

Why give the preferred rates and terms to those who have demonstrated an ability to default in alarming rates; why not provide favorable refinancing incentives to those who have demonstrated a commitment, freeing up that new capital to invest in the distressed properties?

[Vince Ferrer]

If Bernanke wants to stimulate the economy, he should give $30 billion to one of the banks taken over by the FDIC, and use it to refinance credit card debt. If people can refinance a 28% loan into a 10% loan, it will free up money for consumer spending.

[Nateman]

My central question in all of this mess is: when does the deflation stop and the hyperinflation begin? ( So I know when to convert money into something else)

[RobRoy]

I think they are TRYING to monetize it. The question is, Can they?