how about, instead of the fed prescribing cuts to the wall street junkies, we actually see good economic policy?

I disagree .. the Federal Reserve continues to causes major problems with there policies and they continue to bail out large institutions and billionaire hedge funds .. LET THEM COLLAPSE, they got greedy and made their money already.

The free market will pick up the pieces and rebuild with new players that have better ideas and LESS GREED at first anyway.

Let the forrest burn so new growth can take hold ... OH and USA should DUMP THE FEDERAL RESERVE !

Please explain where all the losses are. If a person has a $150,000 house and got a 90% loan the lender has $135,000 in the property. If the property goes promptly into default and the bank forecloses the property should " fire sale" for $135,000--the bank is out the costs of the foreclosure--maybe $7500 so where are all the big losses?

thanks,

Speaking of shutting up...Cramer...

This market was due for a major correction. Period. You can expect real estate to appreciate up to 350% in three years without it falling some, and falling hard. If the Fed keeps cutting rates, he will keep delaying the inevitable. He was the one who contributed to this mess, and he should let the correction happen and don't try fighting it, unless we want a weaker dollar and even longer recession. Companies and consumers must learn a lesson, as hard as it may be, it needs to be dealt with and not just bail them all out to let them do it all over again. Why punish those who were prudent and careful with finances and bail out predators and irresponsible people? It's basic psychology, if you reward bad behavior, you will just get more of it.

It seems to me that if the fed continues to cut rates to bail out the lending institutions,the dollar will continue to fall.This would be highly inflationary ,the cost of fuel and other imports would increase and and this would cause a recession.

A couple of comments:
To Andrea: "It's basic psychology, if you reward bad behavior, you will just get more of it." You're right. I work in this industry ... and I have to admit, as of this minute, I'm not seeing much in termns of real change. We're throwing short term solutions at the losses - cutting back staff, offshoring depts., not a lot is happening to address the root cause: compensating originators for fraudulent loans. Until the industry revisits compensation plans, holding originators accountable for the quality of their production, not much will change.

To Joe: "so where are all the big losses?" Joe, the losses are occurring because there is no equity available to offset the losses. Why not? A variety of reasons: 1. the original equity position was misreported; 2. Loans were originated with high (100%) LTV/CLTV - so there IS not equity; 3. the glut of inventory is driving down housing prices, thereby depleting any equity that previously existed; 4. fraudsters and/or opportunists are orchestrating "short sales scheme" where third parties are taking advantage of banks who have large REO inventories - they are offering quick "cash" sales to desperate banks, with the intent to flip them in a successive sale.

Jim:
If you are calling for another RTC, do look at what is out here. By this, I mean sheer voluume. The scope of this is 10X larger and if I recall the RTC figures, they were 60-100 billion on estimate. We should also keep in mind that these figures are in 1990 dollars and varied, depending on what was included (base value, taxes, muni loss, fees, etc.).
The RTC did manage to reclaim loss at around 60-70, but that still leaves a lot of loose change. If you adjust for inflation, do times ten and want to promote this idea you had better be wearing a flack jacket. We should also remember Bush 1st's statement of "recession, what recession", how the polls changed thereafter, and of course, who won.