What is this Federal Reserve Chairman talking about? He is saying that the $700 billion bailout isn't really a loss for the American taxpayers, because the companies being bailed out have actual assets worth that much. That's a lie. It's a flat out lie, and he knows it. Watch him here on this.
Those companies were way over levered on purpose on un-creditworthy borrowers just so this situation would occur. It was definitely planned. People make big money in booms, and others (some times the same people) make big money on busts.
The little borrowers were sold a bill-of-goods. They were told that rising real estate values would cover them — that all they needed to do is hold and then refinance.
There is no value when the bottom has fallen out. Those borrowers cannot repay. The loans upon which the securities (so-called assets) are based are worthless. The only value in the mundane sense is in the land and improvements at the current market value, which is still going down.
The system isn't going to recover until equity-positions are recovered to pre-boom times. That means it isn't going to recover until after all the losses have been absorbed and sanity (if one can ever call the system sane — I know better) prevails. That means leverage back where people have about twenty percent equity to start again or are buying where the loan payments are way below what was once thought to be affordable (meaning with a twenty percent or better (50% right now makes more sense) cushion against hard times).
Ben Bernanke is a hired spin artist just as was Alan Greenspan. He's covering — doing a tap dance — for the sakes of the plutocrats who are buying up all the market of those they've ruined and doing so using the tax payments of the middle and lower classes. It's nothing but robber baron tactics, and it's a class struggle.