It comes from the fact that while shareholders will get F$#@ed, the foreign national banks and sovereign wealth funds which bought Fannie and Freddie paper are getting bailed out.<\/p>\n
It also looks like the monoliner bond insurers are winners here too, at least that’s how their stocks reacted to the news<\/a>.<\/p>\n This does not mean that the housing crisis is over, or even that it has bottomed out, which is why foreclosures hit a record high<\/a> in Q2.<\/p>\n Additionally with the official unemployment rate spiking to a 5 year high<\/a>, the rest of the economy sucks wet farts from dead pigeons too.<\/p>\n What’s more, as Krugman notes<\/a> that the U6 numbers are positively grim.<\/p>\n The common reported number is U3, while U6 is:<\/p>\n Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers<\/p><\/blockquote>\n And U6 is higher than it was in the worst part of the 2001 recession:<\/p>\n It’s not just banking, real estate, or employment though; Paul Volker is saying that the current financial system, which relies on complex securitization, as opposed to conventional loans is very broken<\/a>.<\/p>\n![](\"http:\/\/img505.imageshack.us\/img505\/7460\/whywewhinepa3.png\")
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