Did the fundamentals of the U.S. economy magically improve over the weekend? Did massive household debt suddenly evaporate? Is there a hiring boom? Are U.S. consumers streaming back into the malls, credit cards in hand? Are cars flying off the auto dealerships' showroom floors? Has housing bottomed out, foreclosures stopped, and are millions suddenly qualifying for zero-down, no-qual jumbo mortgages, happily snapping up all the empty McMansions? Did the $54.6 trillion of risky credit derivatives concentrated among the few banks left standing disappear?

Nah.

Yes, it's going to be a great big beautiful tomorrow:

The Next Banking Bomb?

What worries financial insiders most is the $54.6 trillion of risky credit derivatives concentrated among the few banks left standing.

http://www.cbsnews.com/stories/2008/10/10/cbsnews_investigates/main4514163.shtml

The Next Meltdown: Credit-Card Debt

Rising rates are accelerating credit-card defaults and soured debt could further undermine the financial system

http://www.businessweek.com/magazine/content/08_42/b4104024799703.htm

Housing Lenders Fear Bigger Wave of Loan Defaults

The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.

http://www.nytimes.com/2008/08/04/business/04lend.html?em=&adxnnl=1&adxnnlx=1217957113-pFlrUGvr7OAaQuMcyPKCbg

Crank up those printing presses, boys!

Michael Mussa, former chief economist for the International Monetary Fund, said next year's deficit "is certainly going to be well over $1 trillion."

"Let's put it this way," said former Clinton administration economist Robert Wescott. "No president since World War II has ever taken the oath of office on Jan. 20, done the ride to 1600 Pennsylvania Ave., and found out he's got a deficit of $1 trillion. It's going to be a very different environment than any incoming president has experienced. "The impending rise in the federal debt had budget analysts alarmed before the crisis. The first trickle of 76 million Baby Boomers has begun to retire and will put all future budgets in a tightening vise as their numbers rise, their tax payments fall and their benefits increase.

"It will be extremely difficult to reduce the debt we're creating," said former Congressional Budget Office director Rudy Penner. "The long-run budget problem is rapidly becoming a short-run budget problem."

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/10/12/MN7813DJJ2.DTL

Somehow, all of this reminds me of der Führer's last birthday party -- in the bunker.

"Pass the champagne, Eva."

re: " millions of Americans will open up their 401(k) statements this week and see that so much of their hard-earned savings have disappeared."

Wild stock market swings aside, what's really going to gobble up everyone's savings is the hyperinflation that will result from all of this.

JIM ROGERS: "All of this pumping of money into the system is not going to save it...this is going to unleash rampant inflation around the world, rampant confusion in the currency markets...they're unleashing an inflationary holocaust..."

http://www.youtube.com/watch?v=xIsHD7nwTbU

Inflationary Recession Is in Place

* Banking Solvency Crisis Has Opened First Phase of Monetary Inflation

* Hyperinflationary Depression Remains Likely As Early As 2010

The U.S. has no way of avoiding a financial Armageddon....With the creation of massive amounts of new fiat (not backed by gold) dollars will come the eventual complete collapse of the value of the U.S. dollar and related dollar-denominated paper assets.

http://www.shadowstats.com/article/292

Do you mean that, even assuming the banks start lending* again, folks are not going to rush out to buy homes, cars, etc.?

Gee, and I was getting all excited.

*What's grimly amusing is that the banks are being given taxpayer dollars so that they can then lend that same money right back to us -- with interest! You've gotta love it.

Or Icelanders, take your pick...

Hyperinflation Might Destroy Dollar, Euro & Sterling

* The dollar, euro and sterling are going to be destroyed Zimbabwe-style, believes Martin Hennecke, senior manager, private clients at Tyche. He makes his case to Todd Everts from Wall Street Global & CNBC's Martin Soong.

http://www.cnbc.com/id/15840232?video=887658998

re: The problem is that most families are already "loaned up."

Anticipating 10-15 years of a poor economy, with Julian Robertson, Tiger Management chairman and CNBC's Erin Burnett.

"80-85% of Americans are broke"

http://www.cnbc.com/id/15840232?video=888335380