The New York Times finds a place where 90 percent of the mortgages are underwater, the most in the country.

The average homeowner in Mountain House, California, owes a whopping $122,000 more than the house is worth. Look how much houses were going for there during the bubble, and this is a 60-mile commute from San Francisco:

The Martinezes bought their house in early 2005 for $630,000. It is now worth about $420,000. They have an interest-only mortgage, a popular loan during the boom that allows owners to forgo principal payments for a time.

But these loans eventually become unmanageable. In 2015, Mr. Martinez said, his monthly payments will be $12,000 a month. He laughed and shook his head at the absurdity of it.

It seems the Times is implying that the interest-only part of that loan lasts ten years. Surely that’s not right.

Bloomberg says that the restructured (and expanded) AIG bailout shows that the government is now bailing out “zombie” companies, even though it’s said it would only help out healthy ones.

Vincent Reinhart, resident scholar at the American Enterprise Institute and former director of the Monetary Affairs Division at the Fed Board, said yesterday’s expansion of the AIG bailout shows that “no one knows the general principles” behind the Treasury’s trouble-assets program.

First, Treasury said it would buy distressed assets. Then it began injecting capital directly into banks, and now, with AIG, into troubled financial institutions.

“Now we are outside solvent institutions. If you don’t have a design principle it is very difficult to draw lines,” Reinhart said.

This Andrew Ross Sorkin column in the Times is annoying.

To the contrary, Mr. Boies said. At least over the next two years, the exact opposite will be true. Mr. Obama might want to police antitrust issues, but the economy is in such sorry shape that he probably won’t be able to, Mr. Boies said. It just won’t be politically palatable to kill deals that could save some jobs.

Deals almost always result in mass firings.

He suggested that while the firms would be heavily regulated, that was no replacement for antitrust enforcement. “The regulators end up being, with a few notable exceptions, co-opted by the industries they regulate,” he said, ticking off airlines and railroads as examples.

But beat reporters aren’t co-opted?

And an unnecessary detail alert, I don’t need to know what David Boies ordered for dessert, especially when you’ve already told me what he had for dinner:

As he ordered a dessert of mixed berries — strawberries and raspberries, “no blueberries” — he started in another worry…

Allan Sloan in the Washington Post is good in explaining what’s going on with GM and Chrysler.

The problem is the cash GM and Chrysler need — and soon — under terms of the grand bargain the Detroit Three made last year with the United Auto Workers about health care for retirees. GM, Ford, Chrysler and the UAW agreed to have health-care trusts assume responsibility for retiree health care. In return, the companies promised to turn over billions of dollars to the trusts. The amount, while huge, was way less than the cost at which those benefits were carried on the companies’ books. Capping the retiree-health liability seemed to promise the companies long-term salvation.

But, boy, is there a near-term problem. By my math, GM and Chrysler have promised to give the trusts a total of $12.5 billion to $18.1 billion in cash — maybe more — by early 2010. That’s above the $16.8 billion currently in the trusts. Good luck coming up with that money, guys. Or getting more givebacks from the UAW.

GM and Chrysler would almost certainly stop paying retiree health care if they go into bankruptcy before the end of next year. That would be devastating to retirees not old enough for Medicare — and it is a major reason I don’t think that bankruptcy would be a good thing.

This page-one Journal story on the bailout doesn’t really add much we didn’t know already, but another page-one story has a good angle—the dismal state of the retail industry means those desperately needing jobs can’t depend on it for a last resort anymore.

Circuit City is the latest of at least 14 major retail chains, including Linens ‘n Things and Mervyn’s LLC, to file for bankruptcy protection in the past 12 months. Many, such as Linens, are discovering that they can’t find financing and are liquidating, slashing tens of thousands of jobs…

Roughly one of every 10 Americans is employed in the retail sector. But since November 2007, about a fourth of all jobs that have been lost — about 320,000 in all — have been in retail.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.