Status: False.

Banks need to loan money deposited by their customers to make money. They will not stop loaning money. They will however, stop loaning money to those with poor credit. You will actually have to have physical assets and a job to borrow money. You will actually be expected to repay your loan.

Myth 2: I won’t be able to buy a new car.

Status: False.

There will be just a many deals on new cars as there ever has been. You will have to have a job, a good trade-in or down payment. The car makers are not going to stop selling cars because some idiots on wall street sold bad paper.

Myth 3: Stocks will probably go down to who knows where if Congress does nothing.

Status: Maybe.

But we don’t know for sure. The market may also go down because Congress does something. If you are in the stock market there are risks. I for one am betting that if it goes down, it will come up again and if we let capitalism actually work, stocks will go higher as time goes on.

Myth 4: All the “experts” say we have to do something. Shouldn’t we listen?

Status: False and no.

These are the same “experts” who tell you that deficit spending is good and spend money to study why the sky is blue and the sex life of gnats. They are only expert at one thing and it is not the economy.

Myth 5: Asian and other markets are affected by what happens in the US.

Status: True

Guess we are not irrelevant after all. Those who feed off the good times in the US need to feel the tough times also. Frankly, if you are not in the US then I really don’t care about your financial problems.

Myth 6: President Bush assures all of us that the problem is real so it must be.

Status: False.

That assurance does nothing to assure me and it shouldn’t assure you just because you saw it on TV. Moreover, having the Treasury run by a former head of Goldman Sachs is like letting the fox guard the hen house.

There are some sensible politicians from both parties who understand this is only a crisis for those who are over-leveraged (in debt over their heads). For millions not involved in the applying, approving, lending or selling of mortgages to people who did not deserve them in the first place, it is not a crisis. We do know though, that if the government does something about it, we most likey will have a different crisis.

Myth 7: This problem is the fault of the Republicans and President Bush or Nancy Pelosi and the Democrats.

Status: False, but not entirely.

This goes back to at least 1999 (NYT, http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=all ) and both parties were sleeping at the switch or looking the other way. The real fault lies with corruption and greed from many including politicians from both parties who allow lobbyists from organizations like the National Association of Home Builders to directly influence legislation or lack thereof. Professional lobbying is nothing more than bribery.

It will not end the problem of Wall Street’s too cosy relationship with Washington, DC. It does not fix the accounting rules that are wrong. It does not fix the problem of loosie, goosie regulations and relaxed rules. It doesn’t differentiate between the greedy, the illegal or just the unlucky. More importantly, this will not end the problem in the housing market. The inventory is still there – just a new owner.

Everyone knew this problem was there. From lending money with 0 down to let short sellers get away with an actual crime. And all we have done is put off the problem – you can’t have a country that can legally carry a 11+ trillion dollar deficit. It won’t last. The house of cards will fall down.