Replies

"The problem is now so big and so deeply entwined with all aspects of finance (including, yes, outside the U.S.) that the whole edifice is teetering. And I say again: it's a $62 trillion issue"

You and I both know this 700 Billion is not going to stablize the "vapor locked" derivatives market and it's not going to stop what's coming, the best we can hope for is to delay it a few days or weeks.

From the very first time you understood the monetization of debt (and I suspect you do) from that day forward, you and I have both known what the end would be.

Now that the end might be staring us in the face, you're clinging to hope and letting the politicians lie to you and stall the inevitable until after the election.

This bill, as it's been presented to us so far will not salvage the US Economy.

"From the very first time you understood the monetization of debt (and I suspect you do) from that day forward, you and I have both known what the end would be."

Monetization of debt is just part of it.

The politicization of debt is more worrisome. Such as the strong-arming of mortgage lenders by the likes of Janet Reno and Elliott Spitzer to force them to throw mortgages at people with no documentable income, no credit history, etc., etc., while at the same time lowering statutory floors so even more money could flow out the doors, while at the same time instituting accounting rules that necessitated instantaneous revaluation of balance sheet assets-- a prescription for a whole conga-line of defaults when the market softened.

Then those mortgages got bundled and sold and re-traded and even insured.

Really, looking back, there's just this endless string of WTF moments. But meanwhile, 95% of mortgages are not in trouble. Even those that are have assets attached to them. That's the good news. It will take a while to fix all the damage that's been done. A freer market can do this, given time. IMHO what's going on in D.C. is all about buying time, while (let's pray) not making the problem worse.