The New York Times reports:

…Wall Street has found a way to make money from the mortgage mess.

Investment funds are buying billions of dollars’ worth of home loans, discounted from the loans’ original value. Then, in what might seem an act of charity, the funds are helping homeowners by reducing the size of the loans.

Read more on Wall Street Finds Profits Again, Now by Reducing Mortgages…

Investors are seeing a lot of bargains on Wall Street.

Why? Because many individual companies boast good bottom lines. Why? Because borrowing costs are way down. Why? Because small investors are hungry to buy bonds.

Read more on Why Your 401K May Be Looking Better Than The Overall U.S. Economy…

It's been a year since Lehman Brothers went bankrupt. What has changed in our regulation of such financial firms? Very little.
Crazy incentives induced by government regulation created a financial collapse. Perverse incentives caused lenders to lend money to people who were not good credit risks.

Read more on Regulating The Regulators Of Our Financial System…

What is a mortgage-backed security? These financial instruments were a key part in the financial industry's meltdown over the past year.

Lenders have been selling loans via Wall Street. These bonds depend for their payoff on people making their monthly mortgage payments. If a large enough percentage of them stop making payments, then no matter how complex the financial instrument, it is through.

Read more on The Secret Lives Of Mortgages…

Check out the book on Amazon.com.

Economist Thomas Sowell appeared on Dennis Prager's radio show May 27:

Tom: If the results weren't so serious, all this would make a great Gilbert & Sullivan musical, with all the mutually contradictory statements by the politicians…

Read more on Thomas Sowell's New Book: The Housing Boom and Bust…

I was a lousy math student. I got a D in Algebra in high school as a freshman. I got Ds in my junior year in Geometry. I repeated it as a senior and got a C.

Read more on Obama Wants To Regulate Derivatives…

This is an excellent new book on the mortgage and credit meltdown.

The authors get inside the lives of the leading characters in the mortgage meltdown and explain what makes them tick and what makes their business work (or fail).

Read more on 'Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis'…

Everything was great with the economy. Consumer spending was strong. The credit markets looked strong. Sure, the real estate bubble had burst.

I am reading the 2008 book by Charles Morris, "The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash":

Read more on Do You Remember The Spring Of 2007?…

Prime mortgages are at issue, particularly those with option ARMs. We're due for a vast increase in foreclosures as option ARMs roll into much higher rates.

JP Morgan owns $325 billion worth of mortgages, of which $250 billion of that are prime mortgages and $50 billion are prime mortgages.

Read more on JP Morgan Stops Foreclosures…

Credit problems now extend to student loans, car loans and credit cards.

The whole system seemed in danger of shutting down a few weeks ago.

Now the Dow Jones has jumped a thousand points.

Read more on Restructuring The Finance System…