Polar Bear...

I'll tell you what's awesome. It's really awesome when politicians use our superfluous taxation to bail out poorly managed financial institutions while their respective "leaders" like Stan Oneal, Chuck Prince, Dick Fuld collect nearly a billion in payouts for which they never have to answer. AIG continues to collect "bail out" monies from the US taxpayer, yet pampers their executives and high level management with spa treatments in California in a weeekend costing over 440,000 dollars of the 85 billion the American taxpayer was duped into covering. If the taxpayer owns 80% of AIG, how is this allowed?

Also, according to Paulson, the root cause of the economic meltdown is the decline in the housing market:

"And that root cause is the housing correction which has resulted in illiquid mortgage-related assets that are choking off the flow of credit which is so vitally important to our economy. We must address this underlying problem, and restore confidence in our financial markets and financial institutions so they can perform their mission of supporting future prosperity and growth."

Phillip Brewer, a writer of money matters, completely and insightfully disagrees:

"But for addressing this financial crisis, all we need to understand is that the correction is not the root cause. The root cause is that house prices got so high that the average household couldn't afford an average house. Once that happened, a correction was inevitable.

The way to address the root cause is to let house prices drop to where an average house is within the means of an average household. (Or, alternatively, boost the income of the average household to the point that they can afford an average house. But that's very hard. Letting houses prices go on falling, although painful for everyone who owns a house or who has lent money to someone who owns a house, is very easy.)

Now, some sort of bailout plan may be necessary to keep the financial system from simply collapsing under the weight of all that bad debt. But if that plan is focused on keeping house prices from falling, it's a hopeless plan. If you successfully kept house prices up, we would remain mired in this problem until incomes rose enough to make house prices affordable."

Being a responsibe consumer is something Americans haven't been in a very long time. The housing boom is no different. If this has taught us anything, it's taught me to bury my money in the back yard, don't be a homeowner, but instead rent a house or preferably a mobile home, immediately get into the hospitality industry for large corporations, and most importantly, listen to my friend Aaron and short the financials(May 08)i.e. Bear, Merrill, Lehman.

http://www.wisebread.com/philip-brewer