If there is one thing politicians know how to do is get reelected. They knew going in that any type of bailout would be political suicide. If Bush and his allies were actually rewarding their Wall Street pals, don't you think they would have done it after the election? The bailout and the dive in the economy have cost the republicans dearly. Even though they may be part of the problem, we should at least acknowledge that they committed political suicide trying to right the ship.

If this is nothing more than a Wall Street welfare package, why are countries around the world injecting trillions of dollars into the financial system? Could it be that the possibility of financial disaster is high? Are we arm chair quarterbacks smarter than all those countries injecting the money? Blaming Fanny and Freddie and "forcing" banks to make loans is propaganda to take the heat off the real culprits. The instruments of financial destruction known as derivatives have finally come back to bite that house of cards that is the world financial system. For years the money men around the world had a wild west take no prisoners attitude and borrowed big and rolled the dice until they finally came up snake eyes. All those suckers who got loans they couldn't pay were just pawns in a much bigger game of financial industry high stakes gambling. The rise in the price of oil, corn, wheat, steel and other commodities skyrocked for the same reason. Borrowed money gaming the system. Those commodities are collapsing now because the gamers are getting margin calls and hedge funds are getting hit with redemptions which creates selling which creates more selling. This whole house of card is coming down so look out below.

Ever wonder why automakers are in trouble and the cost of a vehicle is so high, well this is it. We have figures for how much health care is in every car, how about some that show the cost of all these regulations in every car. As far as gas mileage goes, thank these same environazis. They want tighter and tighter emission standards which decrease mileage and add complexity to the vehicle. The problem with the nazis is they are totally unflexable and feel that giving any ground at all is a defeat. Relaxing the emission standards could create cars with far superior gas mileage that would actually pollute less because they use less gas. In fact, emission standards are just a means by which the wackos will rid the planet of all cars. With ever tighter emission and mileage standards and wacky mandates for fuels that may never be viable, cars will be so expensive that only the rich can afford one. After killing the auto industry, the wackies will then seek to scrap all the used cars because they will be "a danger to the planet".

Excellent posts Gordon. You didn't mention the short sellers role in all this. It was the short sellers who managed to create doubt about all securities not just the iffy ones. With the market on the run the shorts have used every financial tactic and rumor mongering at their disposal to crash the markets. With the SEC asleep on the job, the shorts went wild and crashed bank after bank. Lehman, Bear Stearns, Indy Mac, and WaMu all went under after depositors were convinced to get their money out and made a run on the bank.

For those of you not in the know, huge fortunes are made when markets crash, and short selling is one way to do that. Credit Default Swaps is another. We have people on main street who want the markets to crash in the mistaken belief that only the rich will suffer. I guarantee you that if the markets go belly up, the rich will get richer.

The free market got us into this mess, so how do we figure the free market will get us of it. Although we love to blame the stupid buyer of the house he couldn't afford, the reality is Wall Street sold $25 worth of derivatives for every dollar of mortgages they held. The problem is Wall Street also sold Credit Default Swaps, another derivative, as insurance against those derivatives failing. Many "investors" bought swaps without owning any of the debt betting for a market crash. If the mortgage derivatives go belly up, the banks that sold the Swaps will be on the hook for trillions of dollars. While many say we are bailing out the rich people, many rich people stand to make huge fortunes. Money is tight because the banks are hoarding their money in case it is needed to survive. A few years ago Warren Buffet called derivatives "Weapons of financial mass destruction" and how right he was.