[politicket]

I'm begging to understand the house of cards the situation was and is.

Keep watching the online news (Bloomberg.com, wsj.com, etc.). You will be hearing more and more about a credit derivatives problem as we move forward.

This all resulted when commercial banks, investment banks and insurance companies wanted a way to create 'liquidity' from all of the notes that they were holding. They weren't satisfied with just 'good' returns, they wanted returns in the stratosphere.

Some 'smart' people came up with the idea of credit derivatives back around 1995. The financial industry was able to make very complex strategies that put them at a great deal of financial risk, while still making it look like they were meeting regulatory requirements. Understand, they WANTED this risk - because it paid off extremely well while times were good in the housing market.

Then the housing market bubble 'popped' and these 'smart' people realized that they had created an untamed monster that was going to devour them.

The monster is just starting on the appetizers...

[444Flyer]

Meanwhile...on other threads many are still saying there needs to be “something done” to prop up the economy, while others don't want the bailout (for good reasons) but few have been bringing up what is still COMING as you both have. I'm seeing that the “bailout” is only a distraction from the very real problem. A magician's trick, look at this hand while what's really happening is in the other hand. Or the “bailout” is kind of like a doctor giving an aspirin for a brain tumor without treating or curing the underlying tumor in any way. The aspirin may relieve the headache, but the tumor will eventually kill the patient.

You are both economic Paul Reveres, I just don't know that most people will grasp this underlying issue before it is too late.