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Aren't a good majority of these mortgages owned by the Fed or some other government organization at this point? So why do we really care about their losses? Have the government reimburse any writedowns that are due to the private sector if we really feel like being overly generous to the vampire squids again. I'm not sure how you can argue that the indebtedness of people with underwater mortgages is not a big issue or contributing factor to the weakness of the economy right now. People have to throw away a third of their income on artificially inflated debt - this makes them less competitive, with less money to spend into the economy, less money for retirement, etc. - jerry