What is the credit crunch and how to free the market.

[The Buddha]

OK You go and stay at Marriott lets say ... for a week. You pay when you leave. However your room has to be cleaned and the laundry done, everyday.
Those people have to be paid before you pay marriott. So Marriott borrows the $$ at short term rates from what is called a commercial paper desk. 1000's upon 1000's of people put up a little $ and they make a small interest and get their money back over night.
Gone, poof, vanished. No money ... why the last few years the interest rates were so low, the companies that sold mortgages borrowed on the short term market and funded home loans at initial teaser rates and then balloon rates. The liquidity injected into the market is for investors or banks to lend on short term markets, and its guaranteed by the feds in marriott runs off with your $$$ ...
However, interest is at 1.5% and dropping. That is set by the fed. No one is gonna hand over their life savings in return for a penny with the risk that if they fail, you lose your $$$ for a long time and may have to take legal action to get the $ from the fed, So fed can inject all the liquidity they want, it aint gonna do nothing. The interest should be higher because the risk is huge. So many have failed, and no one is certain who is next, or who isn't. The market will flow like a river if interest rates are at 5%. The 700 billion will start providing the fall back for the paper. The problem is trust, and no one trusts any one else. The way to overcome lack of trust is to motivate them with greed.

Now here is the second step to creating trust. Round up all the ones that caused the commercial paper market to dry and publicly arrest and try them and freaking televise it like the OJ simpson trial part deux. To that effect.

This was lifted from housingpanic.com.

Confidence will not be restored until the US again shows the world that they're ready to enforce the basic laws of the land.

Mortgage fraud used to be a crime.

Insider stock trading used to be a crime.

Falsifying financial documents used to be a crime.

But not under Alberto Gonzalez, Michael Mukasey, Chris Cox, Robert Mueller and George Bush. No, those silly laws just got in the way of doing good business. Or launching stupid wars.

The first step toward calming these markets is to arrest the two most guilty parties in this whole mess - Angelo Mozilo from Countrywide and Michael Perry at Indymac. They called them liar's loans, they knew they were enabling mortgage fraud in order to enrich themselves, and they should be in jail. Period. Frog march them for a mile live on every TV in America.

Get them into custody, seize their assets, and make them squeal.

And those two are just the start. Thousands and thousands were involved at high levels and need to go to jail, including some of your Senators and Representatives. And then millions were involved at the lower levels and at a minimum need to be noted and fined.

The people and the markets demand perp-walks. We demand frog-marches. We demand that America becomes a nation of laws, ENFORCED LAWS, once again.

Today. Right now. This day. No more waiting. The markets DEMAND that the laws of the land be enforced. Finally.

Or we simply fall into the abyss.

Nothing is going to move unless these 2 happen.
My money is sitting in a mattress and in metallic motorcycle parts till that happens.

Simply put, if someone steals my money, I not only want it back ASAP, the person that stole it should pay for making me put in the effort of tracking him down and collecting it. Human tendency that Paulson and Bernanke do not seem to know. We want revenge and we will pay you after that.

Cool.
Buddha.