d'oh.

remember when you were a kid, and you wondered why the government didnt just print up a bunch of money, so everyone could be rich? (i at least wondered that).

well, guess what? they finally do! (though not so everyone can be rich, exactly.)

while having the senate banking committee $700 billion fannie/freddie/lehman/AIG/your uncle ruby/bumblebee man bailout hearings on in the background, i heard senator bob bennet (r-ut) say 'the economy runs on credit. credit is granted on confidence. confidence is based one of two assumptions. the collateral is worth it, or the cash flow will be sufficient. one way or the other, the loan will be repaid. what we're faced with now, is finding a way to restore the confidence in the system so that credit can start to flow again. that's what we're here to try to do.'

one way or the other, the loan will be repaid?!

youre kidding me bob, right?

as many of you know, unlikely as it sounds, my first real job out of college was underwriting commercial real estate mortgages, and my second was developing and getting said mortgages approved by our loan committee. (i should mention, our collateral was the commerical real estate itself, and always a second lien on a residence whose first lien was inevitably held by freddie mac or fannie mae or maybe it was only one of them; i forget.)

anyway, i dont think in the history of the lending company at which i worked, in tens and maybe even hundreds of thousands of loan applications, anyone ever dared tell the loan committe, 'one way or the other, the loan will be repaid.' it's like, why dont you add, 'cross my heart and hope to die.'

i realize bennet (btw, his website has a section called 'bennett in the senate,' which is a pretty catchy line i have to admit) had to speak in such a generality in this case, but that gem still perked up my ears.

and i just read, in the times, that "the chairman of the (senate banking) committee, Senator Christopher J. Dodd of Connecticut, said in his prepared remarks that Mr. (Treasury Secretary Henry M.) Paulson (Jr.)’s proposal was 'stunning and unprecedented in its scope and lack of detail.'"

i guess that makes sense, you know, b.c HOW DO YOU COLLATERALIZE A FRIGGIN' 700 BILLION DOLLAR LOAN? the loan-to-value ratio (im really trying to sound like i know what im talking about) any bank would require on that literally fantastic loan would have to call for collateral worth upwards of 1 trill, right?

additionally, how can we expect the cash flow (and which particular flow are we talking about, here, btw?) to be sufficient? to recoup 700 billion?

i mean, we're just printing up money.

im sure there are all sorts of ways to show that my saying that indicates that i dont know what the hell im talking about. (for instance, this times op-ed is a good one. actually, you really should read it. it helped me understand the whole situation a lot better, using clear language.)

the pt is, dude, i may not be an economologist, but i stayed in a holiday inn last night, and i am dubious.

lastly, i think this bailout prolly has to be added to the list of lifespan historical watermarks that i talked about in aug 07.