There is absolutely, positively no way to put lipstick on this.
It's a 100% bailout of a totally out of control financial system, run by people who live in a different world.
First of all, the bailout will be at the very least 1.5 trillion, and likely more than 3 Trillion... because no one... not even the people who created the Credit Derivative Swaps, has an inkling of how much was siphoned out of the economy, and how deeply intertwined are the security guarantees that were made to balloon the hedge funds. Anyone who thought that wise investing allowed hedge funds to charge 20% fees, while they were making 30% value increases for their client.. still believes in Santa Claus.

Second... and much more important, the initial bail out, is just the first of four hits that the taxpayer will take.

The first hit IS the US Debt.

The second,will be the huge loss of jobs, as the economy deflates, and the erosion of the personal asset value.

The third, will be the new hit to the treasury, as the cost of borrowing money (for the Government) increases to unknown heights. Who can tell?.. 10%, 20% or even more.

Fourth... Hyperinflation... possibly as much a 100%.

Now all of these things interact, and won't necessarily be piled on on one, but you can easily see the steps that will combine to produce our newfound poverty.

The irritation is that non of these losses will affect the "Fat Cats", as they turn to new financial instruments (and the creativity here is unlimited) to bleed more money into their fortunes.

It's too early to say the form of the next insult, but do not doubt that it will be there.

Kevin Phillips has been and is right in "Bad Money" and despite his past optimism about the resilience of America, he now sees no solutions. Phillips on the Bill Moyers Journal

The final result of all of this turmoil will be war. There is no other possible way out... and the result of a new war, may be very suspect. War is always he final result of a failed government... the only way to keep the heat away from the people who caused the catastrophe in the first place. All wars rise from this.

Recognizing this now, and being prepared by not developing false hope, may be easier on the psyche... and not expecting anything from politicians from either party will be more realistic than hoping for significant change.

The network of politics and money is simply too strong, to be changed by any attempt to reform.

Change will eventually occur, but only bit my bit, and agonizingly slow.

Sometimes, the challenge of "Okay, if you complain about everything, what would YOU do to change the outcome?" just doesn't work... when there is no way to FIX it.





Last edited by itstarted; 09/21/08 02:56 AM.
Life is Good!