The recession, which officially began a year ago, is accelerating the pace of job loss. Since I began to notice the collapse of subprime back in the fall of 2006, watching the economy implode has been like a huge highway pileup in slow motion. And that crash is starting to create big economic injuries in the job market.

How so? Firing announcements rose 148% in November 2008 to 181,671 -- the most since January 2002 -- from 73,140 in November 2007. So far in 2008, the number of cuts has spiked 46% to 1,057,645, surpassing 1 million for the first time since 2005. And many of these cuts have come from financial services (91,356), computer and electronics (15,350), and retailing (11,073).

Having lived through two credit contractions, I could see this coming from miles away. But it happened far more slowly than I thought it would. And I did not foresee how the bad mortgages would cause a global financial crisis. But they have and here's how: $1.3 trillion in subprime mortgages were added to packages of complex securities, including $13 trillion of mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs).

The slow rolling collapse of the housing industry in this country -- which the Center for Economic and Policy Research estimates could wipe out $6 trillion in housing wealth in 2008 -- has gotten me to thinking about the future. Why do we even have mortgages? What would the housing industry look like without them? Is there a better way? My conclusion is that we should eliminate mortgages altogether. This will cause housing prices to drop, which will make it possible for more people to buy homes instead of living in houses that are really owned by the mortgage holders.

The reason we have mortgages is that the $10 trillion industry supporting them is powerful and self-sustaining. It fuels an enormous housing construction and furniture industry. And there are those in government who think home "ownership" is a worthy social goal. Unfortunately, when people take on a mortgage and then move into a house, the people who live there don't have its title -- the mortgage holder does. Simply put, home ownership is an illusion for most people -- the mortgage holder owns the house until the mortgage is paid off. Instead of renting from a landlord, the "homeowner" is living in a house that's owned by a mortgage holder.

With the rise of securitization, that mortgage holder is no longer the company that originated the loan. It's an investor who holds a mortgage-backed security (MBS) that contains your mortgage and thousands of others. It's an oft-repeated illusion that this is "home ownership." But that illusion is critical for keeping the mortgage industry alive. Unfortunately, if Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) fail, it will be us citizens who will be on the hook for the $1 trillion needed to bail them out.

Although short selling -- the practice of selling borrowed shares with the hope of repaying the loan by buying back the shares at a lower price -- goes against the American belief that stocks always go up, I have long been fascinated with it. Short Stories discusses what works, what doesn't, and what some of the leading lights in shorting stocks think about its opportunities and threats. I describe possible short trades and seek your comments and questions for story ideas. I don't offer any investment advice and I don't trade on any of the posts I write.

Alesco Financial (NYSE: AFN) looks like it will have trouble coming up with the money to repay its debts. This Real Estate Investment Trust (REIT) uses borrowed money to buy into the alphabet soup of securities -- such as Collateralized Debt Obligations (CDOs) and Mortgage Backed Securities (MBSs) -- that could cost Wall Street up to $400 billion in write-downs. With 22% of its float sold short, many investors have already figured out that Alesco, at $3.28, is on life support. But it pays a 31 cent a share dividend, for a 9% dividend yield -- 36% if it was annualized (but I doubt Alesco will be able to continue to pay it) -- which those short sellers are willing to pay because they think the stock has further to decline.

The question about whether to sell short this stock revolves around whether Alesco can pay off its $11.2 billion in debt. Here are some factors to consider:

• Debt repayment. In its most recent annual report of March 2007, Alesco said it was on the hook to repay $3.6 billion It owed in less than a year and then nothing in the intervening years and in more than five years it would owe $6.8 billion. If it has already paid off the $3.6 billion it could be OK. But its most recent quarterly report said it had $91 million in cash so if it owes more than $91 million in the next few months, it could be in trouble. And it's already dedicated $19 million of that cash to dividends.

The New York Times [registration required] suggests that General Electric Company's (NYSE: GE) CNBC's Jim Cramer has had little effect on Fed Chair Ben Bernanke -- this despite his famous video rant in favor of cutting interest rates.

Cramer is used to having tantrums and getting his way. But his responsibility is limited to providing a unique mix of entertainment and stock touting. Bernanke, on the other hand, has a slightly bigger responsibility -- managing the first global financial panic of his 18-month tenure. To do that, he issued $62 billion of short-term government loans (known as repos) -- accepting mortgage backed securities (MBSs) as collateral -- in an effort to restore confidence to the markets.

Meanwhile Cramer is trying to get Bernanke to bail out his buddies at The Goldman Sachs Group (NYSE: GS), whose formerly eight-figure-bonus-worthy trades are now blowing up in their faces. Simply put, Cramer wants the Fed to grant Wall Street all the upside while shifting the costs of its mistakes onto society. But Bernanke does not want to play along.