$700 Billion Bailout

It took the United States 209 years, from the founding of the republic till 1998, to compile the first $5 trillion in national debt. In the decade since, $6 trillion in debt has been added. The United States has borrowed more money in the past decade than in all of America's previous history combined. Six trillion dollars borrowed in a single decade and $1.5 trillion borrowed in 2008 alone.

The $700 billion number being touted as the only true savior of the financial markets is quite the request from Paulson who has been fundamentally wrong about this crisis every step of the way. Here are the best links I have found describing what this bailout really means (The Daily Show Video captures the entire crisis perfectly).

The Spin Game: http://bigpicture.typepad.com/comments/2008/09/latest-paulson.html#more

Daily Show - Debt to America: http://www.thedailyshow.com/video/index.jhtml?videoId=185195&title=debt-to-america

Plan's Mystery: http://www.nytimes.com/2008/09/25/business/25value.html?_r=2&hp&oref=slogin&oref=slogin

Best Quote Thus Far:
"We will be told that the Federal Reserve and the Treasury have finally gotten it right. The scope and size of the proposed program will arrest the decline in home prices, restore stability to the financial markets, enable banks to get back to the business of lending, and restore the confidence of the American consumer. While the program certainly has each of these points as a goal, the amount of time to achieve each goal is unknowable, but an important factor. Moses was told he would lead the Jews to the Promised Land. He didn’t know it would take 40 years. And, in all due respect to Bernanke and Paulsen, Moses was working with God. They are working with Congress."
-Jim Welsh, Welsh Money Management

Economic Impact of Anti-Bush Merchandise

Hilarious news story on The Onion:
http://www.theonion.com/content/video/economists_warn_anti_bush?utm_source=embedded_video

Economic Turmoil

It has been well over a year since the word subprime entered our daily dialogue. The issues surrounding the credit crisis have lasted longer than most thought possible, and provided wider repercussions than many fathomed. It has led to bailouts, stimulus packages, and seemingly constant turmoil in the stock market. Bear Stearns is no more, Fannie Mae and Freddie Mac have been nationalized, Lehman Brothers has gone bankrupt, and the world's largest insurer, AIG, has been rescued by the Federal Reserve. In addition, short-selling, a beacon of our "free" market, has been taken off the table and a $700 billion package has been unveiled to allow the federal government to buy the mortgage loans that are causing the credit markets to seize up. What once seemed impossible now seems commonplace.

(Click for NY Times graphic showing the unbelievable transformation of the financial sector)

Wall Street is coming off it most turbulent week in decades. It is now the taxpayers, many of them diligent and prudent, who will pick up the tab for Wall Street's insatiable appetite for profits. This past Thursday and Friday represented the greatest two day rally in the Dow Jones since October 30-31, 1929. The 29% rally in 1929 was, you guessed it, followed by the 86% decline now referred to as the Great Depression. Paulson and company may have saved us from financial Armageddon, but I believe it is too early to sound the all-clear.