11 a.m.One last time on the credit crisis, then I promise to stop, but I have to post this.

I received this today from a reliable source, this was written by a staffer for a Congressman in Washington to my friend and I am certain it is legit. Take it for what you will but it confirms what many other sources are saying about the credit crunch. Note that we are already getting worse and worse bail out packages due to the porkish way our system works. It is only going to get worse, not better.

"My boss will probably vote against. I personally think we need to do something. The following is my take on this, not necessarily my boss‚ so please erase any reference to his name if you pass this on the following ramble.

"Most of the media reporting this last week and a half was misrepresenting a very serious situation instead of accurately reporting what the problem actually is and accurately educating the common joe on what is facing the nation: a lack of confidence in our financial system that if exacerbated will lead to an even bigger decline in our economic system that will touch each and every one of us.  

"When banks refuse to loan to another bank for an overnight loan, a supposedly safe loan, we are in big trouble. This is not a 'bailout' for anyone, including Wall Street. If anything, it's a bailout for you and me. It's a bailout for all of the homeowners who've gotten second, third and sometimes four mortgages against their home for additions, for kid's education loans, for a new expensive car or for a 50‚ digital TV. Our nation as a whole has been on a spending spree beyond their ability to pay and now the piper is at the door.

"The financial world is based mostly on confidence; we are in a time of a great lack of confidence in the US financial system, both here in the US, and worse, overseas. America spent $700 billion a year more than we produced for the last seven years. Where did the extra money come from? Overseas. Chinese workers who work long hours and who do not have a consumer mentality squirreled away their savings and their financial institutions invested their money here in the US.

"If investors overseas lose faith in the US, we will not have the much needed infusions of financial liquidity from overseas to come out of this situation. We need to restore faith in the US money markets ASAP or the crisis will become even more expensive, more problematic and longer to correct. In the presidential election year of 1984, Reagan went to the Dem Banking chairs in the House and Senate advocating fixing the S&L problem right away; the cost then would have been $8 billion.They refused, the crisis went on for five more years and cost the taxpayer $159 billion. We need to act and act now.

"This is not a problem of 'Wall Street greed,' it is really a problem of Main Street greed. This economic crisis is based on the rapidly declining values in the housing market. After decades of increasing home values, and people borrowing against the increase in the paper value of their homes year after year,

"Look how big this problem is with 'only' 4.5% of current mortgages in default. What will it be if it becomes 8%? 12%? 16%?

"Lending is already tight. Financial institutions are hoarding their capital because no one knows the value of the assets of the borrower, whether it is another banking institution, a business or the man on the street. Therefore they are not lending.  

"Businesses are not getting the working capital loans they need to produce their services or products. If they can't get these loans, they will lay off workers. If workers get laid off, they cannot pay their mortgages or rent, purchase goods and services, or even that cup of coffee at Starbucks. Then the kid behind the counter loses his job, keeping him from paying his landlord, his car insurance, his grocer, his clothing store, and his hair stylist. They in turn will not be able to pay the people that provide them goods and services.

"This will cause a downward economic spiral further and further until it will take longer and longer to work our way out."