This is a rescue plan for the wealthy. The dollar will continue to sink, oil prices will rize and inflation will grow. I figure till will all come apart about January of next year. I hope Bernanke knows he's been set up as the fall guy.

if the Treasury is put in the position of having to cash in the collateral? Who gets stuck with the "AAA" bonds? Seems like this really is a bailout of sorts. The treasury is offering liquid securities in return for overvalued collateral.

Isn't that exactly what the banks themselves did that started this whole mess?

Well, the big difference is that the Treasury can "write off" losses just by passing them off to taxpayers.

I can understand why the Fed wants to stabilize the banks and their credit woes, by any means possible

Who's to say that the Fed has any more money? I understand that the Treasuries themselves are under siege..their value is depreciating, as well, and they're the payout.

What happens when the entire house of cards continues to collapse no matter what the Fed does?

It's not a good thing to dwell on. There's no end to this horrible financial nightmare, and the banks that started it will get away with doing it.

This entire financial meltdown sounds ominously like what happened in the 30's..and look what happened then. Not a very pleasant scenario, and very close to it.

About 8 months ago I wrote in this very same column that the news at that time (which was beginning to trickle out) would get very very bad, and the results astoundingly terrible-and I was proven right 100%. I fear I'm not being a Pandora this time, either.

It sucks to be right.

The securities aren't being held by the Treasury, they're being held by the Fed. This is the same Fed that makes $7 billion plus a year through seignorage. Regardless, though, the firms are obliged to return the Treasuries--and if they go bankrupt the AAA tranches are probably not 100% worthless (at least not yet).

So it is unlikely that the taxpayer will have to pony up even if the banks/brokerage houses default.

I can't see this as anything other than taking bad collateral for good coin, with the working class taxpayer funding the bailout of the banks.

Many major investment banks nearly failed a month or two ago, and are still on the edge. If not for the bailout by Dubai, Singapore, the Chinese, Saudi's and Swiss, the U.S. banking system would be on the ropes.

We can thank the Reaganite deregulation brought to us by good ol' boy Bill Clinton, who felt that the old-fashioned Roosevelt Glass-Steagal Act of 1933, passed in the dark days of the depression, was 'outdated.'

So now banks can also be broker-dealers, and there is no 'wall' between betting on the stock market and old fashioned banking. And if the stock market bets tank, than your nice little deposit in your bank is also at risk. See, isn't progress great? Isn't Clintonism just the bomb?

The Bush regime's profligate spending untethered from any form of fiscal reality, i.e., taxes, is having its inexorable result: inflation and devaluation of the dollar.

It's just happening faster than these bandits anticipated -- before they could make their getaway and pin the blame on their successors.

It's the GOP's cycle of tax cuts for the wealth-holders, which causes economic anemia, which necessitates tax increases by responsible politicians who must take the heat from the voters, but which then results in economic health, and then Republicans repeat the cycle by pandering for more tax cuts.

Only this time we've had the combined effects of a ruinous war and wholesale exporting of American manufacturing capability and millions of jobs, combined with runaway energy prices.

It's a formula for disaster and the tax cutters can only crank-up the printing presses to print more and more, cheaper and cheaper dollars.

These boobs are no better at economics than the third-world despots they emulate in every other respect.

Thank you, Mr. Leonard. This is a very informative article on a subject that significantly impacts all of us. For additional information on the credit crisis, check out:

http://theautomaticearth.blogspot.com/

It will make you want to move to a desert island!

Really, this is all hilarious. Amazing what greed and stupidity, working together harmoniously, can accomplish. Quite a spectacle it's all come down to, the "greatest nation in the world" with its vaunted corporate sector dazed and bewildered, begging for the government bailout, and the entire rest of the population now on the dole, all of us waiting for our $600 welfare check.

From greatest nation in the world to laughingstock of the world in a mere eight years. What a ride! Heckuva job, guys...

Just sayin.

DJIA up 420 today

The rich got bailed out. At the expense of the rest of us.

Just sayin.