I don't have the exact details of the bailout plan but as I understand it there are provisions to stop foreclosures. I can tell you that anything that stops foreclosures or tries to prop up real estate prices will only accelerate the slide into depression.
First off real estate is still overvalued. Until it moves back to sane valuations there will be no real demand for housing. Especially in a recessionary or depressionary environment how will keeping prices artificially high create demand for all the inventory that's on the market? Common sense will suggest that it won't.
Any bill that puts a halt to foreclosures would lead to catastrophe. If all of a sudden there was no penalty for defaulting on your house (the bank won't take it) and prices continue to fall, how long will it be before home owners in mass decide to stop paying their mortgage?
This would result in a tidal wave of defaults crashing onto an already stressed financial system.
As I've said before there is no easy fix for the mess Greenspan created and now Bernanke is exacerbating.
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