Remember when I said I was for the bailout? I'm still for the bailout that I said I was for. Not so sure that I'm for this bailout, though:

Treasury may capitalize banks by end of October. Buying into the banks makes no sense to me. I know that it's what lots of economists say would make more sense, but the logic of it just doesn't work for me. I think it was Nancy Pelosi who said that people shouldn't think of this is as a "bailout" but a "buy-in." When I heard it, in the early days of the bailout discussion, I thought: "Yeah, that's right!"

But buy in to the banks (and etc)?

I see three problems with buying in to the financial industry:

1) You can't directly improve the terms of mortgages. Whether the government directly bought mortgages or the securities that held them (the former is better), it could change the terms of those mortgages, giving consumers much more stability, insuring a more even flow of money back into those securities and greater stability across the board. It would be great for homeowners and the rest of the economy. If we just give banks some money, well, who knows what they will do?

2) We won't ever get our cash back, even if the securities make money.

In case you aren't quite convinced to follow Dan's suggestion, above, to call Specter, here's a little back-up for him. This whole industry friendly foo-fah going on with the Hope Now Alliance is not cause for much hope. We need something stronger. Yesterday, PUP did an informational picket outside a HOPE NOW event.

In our press release, John Dodds, Director of the Philadelphia Unemployment Project, explained: “With sub prime loans increasing dramatically in Philadelphia in the past three years from 20% in 2004 to 37% in 2006 we need more than a public relations road show to protect families and neighborhoods from this crisis."

Hope Now Alliance Hotline has gained a reputation for causing frustration and minimal help to large numbers of homeowners trying to use their services. The Alliance is heavily dominated by the mortgage industry.

“They didn’t even reach out for local housing counselors until this Tuesday for a large scale event a week away”, said Pam Kennebrew a housing counselor for the Unemployment Information Center. “The phone number for the flyer they sent to local homeowners had a bad phone number to call to get information on the Homeownership Forum. A woman in Las Vegas was getting the calls.”

ABC-6 video report on Hope Now Alliance event in University City on April Fool's Day.

Action News reporter Nydia Han covered the Foreclosure Crisis Committees informational picket. As she reports, no homeowners left the meeting with modified loans.

So you've led an angry crowd of homeowners to the doorstep of a mortgage company demanding LOAN MODIFICATIONS NOW that freeze your loans at their teaser rates forever. He says, "No can do. I'm legally bound by investors in the secondary market."

Is that true? It might not be. I don't 100% get it, but I might have made some progress today. Wanna see what I think I found? I know you do. Come along!

Harold Brubaker wrote a pretty good analysis of Collaterallized Debt Obligations today in The Inquirer, which are the means by which many mortgage holders have spread around the risk of sub-prime mortgages. I say "pretty good" because I read it three times today before I started getting my head around it. Then I went to Wikipedia and read about the darn things there.

Let me try to put it my way (which might also be wrong, but what the heck), and, more importantly, point out that these things don't work quite the way that the mortgage industry has described. In other words, a teaser freezer seems much more legally feasible than the Greedniks care to admit.

I got your clarity right here: click read more now!