Ronald Reagan was fond of the saying "Those who get into bed with government can expect more than a good night's sleep". Well, it's not that simple. It seems that some get taken care of - on the house. The others will get robbed....afterwards. Depends if you're on the List or not. Merrill's on the List, so is J.P., as are a couple of the Lehman Brothers. Now Ben Bernanke was none too quick to acknowledge the List, sending Cramer on a famous rant. We be entitled! OK, today Bernanke acknowledged the List.

In a falling market, the smart move is to take your losses and get out. The unprofessional investor, as are most homeowners, can't drop the emotional baggage and they hang on hoping for the market to come back. Housing ain't comin back any time soon. Prices need to reset and people and the economy need to move on. Paul Volcker understood that - Ben Bernanke doesn't.

Uncle Horst has a drinking problem, as does Uncle Harry. Horst's family does nothing and he ends up in the hospital ER one day, gets into rehab, and recovers - or he just enters voluntarily. Harry's family, seeing him dissolute, waters down his Vodka to help the poor bloke out, he keeps on drinking, gets cirrhosis of the liver, and dies.

By announcing to the world that he intends to inflate (dilute the dollar) Uncle Sam out of the little mess he's in, long term interests rates are going to rise. Even Greenspan said to expect double digits rates. (Isn't it amazing that Greenspan is suddenly talking intelligible English. It's just incredible!)

Bernanke may have provided some relief for all the home debtors who will be facing ARM resets (those are expected to peak in mid 2008 but remain high for a few more years), but if they want to sell, they will find that most people now are back to the old time religion and want FIXED rate financing - and 30 years fixed rates will be rising in an inflationary environment.

So the home debtors won't be able to sell - and escape their liens, but, thankfully, will be able to keep paying the mortgage that is based on an artificially low short term index. Like boiling a frog slowly in a pot of water, by the time the frog realizes that the water is hot, his skin is cooked. These home debtors will be able to keep the payments (to Wall Street) flowing now while slowly, slowly their houses decrease in value (back to pre-bubble levels); they keep paying in hope the market will come back - any day now. By the time they wake up to what's going on - their goose is cooked. Yes they've paid off a little of the principal, but their homes are now worth less - in California and other extreme bubble states, considerably less. Guess there is some justice in all this, as they realize then that there "ain't gonna be nobody" to pay off the balance that they borrowed but themselves - every last cent.

Paul Volcker showed leadership, whether you call it tough love or whatever, by pointing the economy in the right direction. There is always hope. Even drug addicts and alcoholics can recover. There may be a tough transition, but a better future awaits them. But the solution is not more heroin or alcohol (easy credit and cheap money).

In this falling housing market, the WORST scenario is for a home debtor is to just hang on. Just get out! Bernanke is inviting them to bed - and they are going to get more than a good night's sleep. The analogy of the two uncles is apt. Instead of getting these people to rehab (as Paul Volcker did), Bernanke is just insuring their slow death. Horst is better off by losing the home, voluntarily or not, than Harry will be by having the privilege of paying a little less every month.

Of course, getting Horst, or Harry, off the bottle doesn't help distillery sales any and some people view their jobs as looking out for "bidness" interests. But this latest Fed move by Bernanke is about bailing out Wall Street - not the great unwashed. As I said, depends if you're on the List.