Cross-posted at River Twice Research.

After months of confusion, we are about to close a painful chapter in the economic crisis of 2008-2009. With the imminent passage of the $800 billion stimulus package combined with the roll-out of the next stages of the government-orchestrated bank bailout and recapitalization, we are about to end the talking phase and enter the doing phase. While no one can say for sure whether these plans will work, it’s certain that they will have an effect.

This week it will be announced that the FDIC will become the “Bad Bank” the repository of the toxic and worthless paper (I don’t use the term “assets,” as that would imply they have value). The FDIC is “you and me.” Here’s whose really behind it, and why…

People are trying to make a “Bad Bank” is a good idea. Good Bank, Bad Bank; Good Plan, Better Plan is one such attempt.

Cross-posted at River Twice Research.

As Wall Street continues its slow-motion hari kari, tens of millions of people on the lower-end of the income spectrum are finding that their access to credit is becoming all but nonexistent. As banks set aside ever more cash to cover themselves against potential future losses, the credit spigot that flowed so promiscuously to riskier customers is now not flowing at all.