What's smelly is that AIG's bankruptcy ($632 billion) is ten times larger than Enron at $63 billion. This is the 400 trillion derivatives bubble popping. Total drug flows are only $600-700 billion a year, not all of which goes through US companies. AIG needs maybe $70-100 billion NOW to service its bad debt plus the claims it will face from Ike and Gustav. Their housing paper is never going to recover value because of Peak Oil and already shattered demand. This is bigger than the drug trade can help with. Drug cash was used to keep the system liquid when it was strained and wobbly five years ago. Now it's onlife support.
Recent market rigging only hastened the implosion. I suspect that too much demand may have been destroyed and what we're seeing is that falling (bombed) oil prices are not producing new revenue streams. People are either chosing NOT to return to old patterns or they cannot.
Good, let the shake out happen right now!
MCR
The obvious worst part of these bailouts is that the taxpayers are the ones who pay for it. They should all be allowed to fail...
ReplyDeleteWe still have the credit card debt bubble...
(Note: This is the actual comment below. The previous one was an error).
ReplyDeleteIt seems that the US's D-Day is coming not only on its economic front. The 60 year old, fake, farcical and criminal neocolonial alliance between the US and its artificially contrived South Asian toady state of Pakistan is now on the rocks too - as the latter descends into its own economic, social and structural breakdown. It is being eaten away by a tribal insurgency in its northwestern province; besides, years of misrule and plunder by its Anglophone ruling elite have now brought it to the brink of chaos and dysfunctionality. The US is extending its Afghan war into Pakistan's Pashtun tribal areas and they have asked for it, as these wild Pashtuns are orchestrating Taliban rule in their territories and are openly and proudly hosting al-Qaeda there. Now there is an open revolt brewing, as "indignant" Pakistanis, whose "honour" has been violated by CIA Predator Drone strikes on extremists has brought things to the boil on the Hoi Polloi level. The US-Pakistan nexus was one of Anglo-American global imperialism's most inimical geostrategic relationships, with the grovelling manner of the Pakistani rulers being most sickening to wittness. They are totally dependent on their US and British masters. Besides this, Pakistan's "ordinary" people are a wild, boorish and pugnacious lot of religious extremists, who have not even been able to bring a revolution against their oppressors. Mafia-minded, they can be bought and sold. But the coming breakdown and break up are inevitable, and will burn the hands of both the US and what remains of Pakistan.
You are so right, Mike.
ReplyDeletefrom Steinbeck's THE GRAPES OF WRATH:
"The bank is something more than men, I tell you. It's the monster. Men made it, but they can't control it......They (banks) breathe profit; they eat the interest on money. If they don't get it, they die the way you die without air, without side meat."
The MONSTER must die before we can be free. Thank you, Mike.
Chris xvx
ReplyDeleteAnd we still have Option ARMS, in 2009, I think.