The Fed used to act much more secretively to bail out lenders and hedge funds and create the conditions that lead to bubbles in the economy. In the new age of the internet, though, where so much information is available so quickly, it has become impossible for the Fed to manipulate the economy as easily as it was used to, and the scheme to impoverish the country is in the open, if not being stopped.
Hundreds of billions of dollars have been created out of nothing by the Fed in order to bail out bankrupt lenders at the expense of the general public. With larger than expected numbers of defaulting mortgages in the subprime market, banks have had to foreclose on more loans, wiping out cash receivables from their balance sheets in return for illiquid real estate assets. But this would only hurt the banks if the Fed was not there to take all of these bad loans and exchange them for US Treasury securities, allowing the banks to stay in business for a short while longer.
Cries have been raised by both banks and homeowners about the severity of the problem. Congress has been called on to act quickly to protect their constituents from predatory banks. Unfortunately for most homeowners, members of Congress have been advised and lobbied by the banking system for centuries, and it is more likely that the banks will be bailed out than any substantial action taken to help foreclosure victims.
This is already apparent in the programs that have been passed, ostensibly to help homeowners stop foreclosure and work with their lenders. From voluntary programs that involve a handful of banks, to tax cuts for the same business interests that benefited most from the housing bubble, to hundreds of billions of dollars of liquidity pumped into the banks by the Fed, the public has been robbed more than assisted by legislators.
The fallout from the housing bubble is just one more disturbing step in the process of privatizing the assets of America through a huge leveraged buyout of the economy. Banks and corporations have used Americans' own money to buy as much of the productive assets as they could, and have now raised interest rates and fees in order to steal even the country's real estate away from its people.
These same banks and corporations have also financed the impoverishment and wage slavery of the average American. People are locked into their low-paying jobs with threats of outsourcing to a developing country if the cost of labor goes too high, while their health benefits are tied to their employment. The fact that they probably would not receive adequate healthcare from their insurer does not make the threat of losing insurance any less disturbing.
Few homeowners or consumers ever realize that their jobs and their consumption go to finance their own enslavement, however. The large banks they have their checking account and mortgage with are the same ones that finance the large corporations to outsource production while replacing local businesses with big-box stores and franchise-heavy strip malls.
The general public works for the large corporations, which keep them as impoverished as they can without inciting riots. The low pay that the people receive that is not taken directly by the government is then spent or deposited back into the economy and ends up in the large banks. These institutions then lend the money back to businesses to finance more wage-slavery, while impossible-to-pay-back mortgages are sold to homeowners for the banks to rake up the last little bits of whatever money the public has left.
The housing crisis is, unfortunately, one of the last steps in the leveraged buyout of the country by the banking system, which controls and creates the money used by every person. The banks will either own the real estate, or they will have helped to inflate and crash the markets so that homeowners owe far more on their properties than they are worth or could ever pay back.