Here's an amazingly succinct guide by NPR about the "bad banks" and what it all means.

It's really, really scary.Especially scary is this graph, showing "twin peaks" - a ratio of consumer debt to GDP, which historically has been 50%, but has recently reached 100% (over 13 trillion dollars).  And ready for the really scary part?  The last time the ratio hit 100% was 1929.

Here's a great blog posting discussing this chart.

And on the topic of great NPR stories, here's a related one I wrote about recently about understanding the loan mess from Wall Street's perspective

So what does this all mean?  Well, as scary as it is, being the consummate entrepreneur, I think it's a great time to start a business, which is exactly what I'm doing right now.  By "great" I mean there are certain advantages.  It's a terrible time to be looking for funding, so the business has to have solid fundamentals, i.e., actual customers willing to pay.  But top talent is much more available, and clients are willing to make deals they wouldn't touch in better economic climates, like revenue sharing deals for example, that should prove valuable when the economy recovers.  I have no illusions, it will probably be 5 to 10 years before that happens, but I'm in the long-term value creation business.

Also, my past startup, DROdio Real Estate, has had to adapt.  It has gotten really good at selling bank owned properties, and is actually doing very well in that business.  Also, there are more people kicking the tires, so the company's ability to turn tire kickers into buyers by not being pushy, using blogs to educate, and technology tools to help buyers look with no pressure, has proven a very good approach.

But as Jack Welch famously said, we all have to "accept reality as it is, not as it was, or how we wish it would be."  Go listen to that NPR 'bad bank' piece and let me know what your thoughts are, I'd love to hear them.