The bill to bailout the banking system though the process of the Treasury buying toxic mortgage assets from banks appears to be all but finished.

According to The Wall Street Journal, a deal to bailout U.S. financial markets has been agreed on and all that remains to be done is to commit the legislation to paper.

The most significant addition to the original bill appears to be "the legislation will expand the range of firms that can sell troubled assets to the government to include pension plans, local governments and community banks serving low- and middle-income families."

Douglas A. McIntyre is an editor at 247wallst.com.

There's a disturbing trend among home lenders, and it may gain the exposure that it deserves in the wake of the subprime fiasco. Minorities are more likely to hold these so-called toxic mortgages, even when comparing neighborhoods with similar housing prices. According to The New York Times:

Consider two neighborhoods in the Detroit area. One, located in the working-class suburb of Plymouth, is 97 percent white with a median income of $51,000 in 2000. To the east, a census tract in Detroit just inside Eight Mile Road has a very similar median income, $49,000, but the population there is 97 percent black.

Last year, about 70 percent of the loans made in the Detroit neighborhood carried a high interest rate -- defined as 3 percentage points more than the yield on a comparable Treasury note -- while in Plymouth just 17 percent did.

It's hard to attribute that to luck of the draw. It appears that, at least in some areas, minorities are being systematically denied access to mortgages, and that's unforgivable in this country. There are a variety of explanations for this phenomenon: traditional banks are less likely to have branches in areas with large numbers of minorities, and thus borrowers in those areas may gravitate to the subprime lenders that set up shop there.

In any case, this is definitely something that merits congressional investigation. Congressman Barney Frank has been taking a hard look at subprime, and hopefully he will add this issue to the stack of questions he plans to ask industry leaders.

You have to love academia. With the subprime meltdown in full swing and Americans with ARM and/or pay-option mortgages finding their homes in jeopardy, Tomasz Piskorski of Columbia Business School and Alexei Tchistyi of New York University's Stern School of Business have come out with a 65-page paper full of equations to demonstrate that no, actually these so-called toxic mortgages are the best ones out there.

The authors of the study argue that, in a perfect world, these mortgages are great -- sounds a little bit like what some people say about communism. Pay-option ARMs work great if people behave rationally -- act in the own best interests, behave with self-discipline, and pay more than the minimum whenever possible.

That sounds like most of the subprime borrowers you know? Yeah, that's what I thought. The professors say that, with proper education, these loans could be attractive. According to Piskorski:

"Obviously people are to some extent irrational. But if you want to ban this type of contract, you should really weigh the benefits and the costs. How much could you educate people? Make people understand them. Provide them with software. Make a federal law that requires the lender to reveal what this contract is about."

But most people know shockingly little about finances. According to a Jump$tart survey, "Only 14.2% [of high school students] felt stocks are likely to have higher average returns than savings bonds, savings accounts, and checking accounts over the next 18 years in spite of the fact that there has never been an 18 years period when this was not true."

So educating people about pay-option ARMs seems a little ambitious.