This problem with the mortgage markets has given me the opportunity to think about how all these things work. According to most sources, the danger facing the country is the lack of money for the commercial paper market - which is where small businesses offer to pay an increased some of money in a day or a week, in return for a smaller amount of money today. From what I have heard - money market funds are the primary source of these short term loans. With all the tumult of late here and there in various markets, one such money market fund “broke the buck” - that is to say that those with money in that fund were sent word that their funds had actually decreased, rather than increased, because of the choices which the fund managers had made. Apparently, this event made other money market fund managers more conservative, and this meant that the pool of money which businesses usually draw on for their daily expenses dried up. This is the thing which folks say could “kill the economy.”

But wait a minute here. There’s no reason that the commercial paper market couldn’t be insulated from the rest of the problems on wall street - for instance, those problems in the mortgage markets. Those businesses which are utilizing this money are happy to support that fund and it’s welfare with the usury which they pay. This part of the financial system is healthy, and should remain so.

The mortgage markets, on the other hand, always were an unethical place to invest one’s money. There was no transparency. No one who had bought the debt service from the debtors knew about those debtors’ situations, and whether the service burdened that person unduly. And predator lenders, in writing up contracts for adjustable rate mortgages, were simply trying to “squeeze blood out of a turnip.” Naturally, the home owners would not be able to perform their debt service under those terms… and so the big dreams about all the money that would come from those investments were misguided.

I believe that the solution for all the money investment markets is to create end-to-end transparency. Everyone who purchases the debt service from a debtor, should know enough about that debtor’s situation to see whether that person or company is unfairly burdened by her or his commitment, and to see whether the means and the will is there to fulfill the commitment of performing that debt service.

In the short term… I don’t see any sense in tossing $700 billion usd at the mortgage markets, if congress is concerned about the commercial paper market. The commercial paper market has the means with which to sustain itself, if those running it get their act together and set things up properly.