Don't be histrionic -- Obama isn't discussing changing bankruptcy law every month. This is a single change. Further, it resolves some nasty agency issues where securitized mortgages that can't be reasonably modified -- the servicing agencies lack the rights -- or won't be modified, because the servicing agencies don't get paid for modifications, which is an extremely expensive process.

And yes, lenders blah blah bah lower risk blah. How's that working out for them? The fact is (and nobody is disputing this) homes are overpriced. Home prices will fall. How far and how fast is a matter of direct interest to most people in the nation, particularly other homeowners. Measures we can create to prevent overshooting on the downside are probably worthwhile. If we can get people to cover a large portion of their mortgage debt, the nation as a whole is probably better off -- fewer bank defaults (and those are your retirement and insurance funds at risk), fewer fund collapses (again, your retirement and insurance and etc were invested into those CDOs), fewer foreclosures, fewer disrupted communities, higher home prices for non-foreclosed households, etc.

The whole idea that we could just foreclose and the bank could get their money out hasn't been tested with a crisis like this. In some communities in socal and Florida, 50% of home sales are foreclosure sales! The bank is going to recover what -- probably well under 50 cents on the dollar in this case. Finally, the whole bit about a judge changing the terms of the mortgage does prevent people from being stuck under crushing debt -- that's the point!

Finally, the author of your link is, well... stupid. Very briefly: Bear Stearns was rescued because if they failed, they'd take all the other banks with them via intertwined obligations. We need banks to act as financial intermediaries in all sorts of transactions... no banks, no credit markets, no ability for people and business to borrow, no economy. Fannie and Freddie got bailed out because, well, amongst other reasons China told us to. And when somebody owns more than a trillion dollars of your debt, you need foreign central banks to buy another trillion or two in 2009, when they say jump we get to say how high sir.

Now look -- you appear to think that I'm happy with this situation; like other people, particularly those of us that don't own homes, I'm pretty pissed off about the whole thing. But the time for preventing this was in 2000- maybe 2005, and now what's done is done and the best we can do is ameliorate this for as many people as possible. That pretty directly implies the government should do their best to stop the rapid home price falls... the prices will fall no matter what, but the more they fall in real instead of nominal terms probably the better off the nation will be.

Finally, prices in the markets aren't low and uncertain because of government meddling -- prices are low and uncertain because most banks are probably bankrupt, we as a country are sitting on enormous piles of bad debt and nobody can figure out whom and how bad, and btw, the entire world is entering a severe recession. Simultaneously. From China's imports that plunged this month, to the US, to Korea, to England and W Europe, it's hard to find any bright spots in this economy.