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Notes from JWR:
Courtesy of the liberal majority in The U.S Senate, the TARP Bill
(which is supposedly limited
to $700 billion USD) appears to be a fait accompli. (It now headed
to the House of Representatives.) Both senators McCain and Obama voted for
it. (So much for us making any meaningful "choice"
in the
upcoming
presidential election.)
Disregard
all
the headlines, folks.
In my estimation, the all-fired hurry to enact the TARP bailout was driven
by a.)
the
sudden huge jump in the LIBOR rate, and b.) the chaos
that is quietly is going on in the background with derivatives. The
politicians have realized that if they don't do
something, and something right now, that global economy
is going to come crashing down as soon as next week. And even with the
Mother of All Bailouts (MOAB), the markets may crash, anyway. Things are really
that bad. At present, the global credit market is frozen solid. More than
anything, it resembles a Wooly Mammoth that was suddenly frozen stiff with
clover grass still in its mouth. Applying CPR
won't help the beast.
But Ben
Bernanke
and Congress are still doing their best to resuscitate it, putting on a good
show for the public. There will have to be a new credit system established,
to fill the ecological niche left by the Mammoth.
The first article today is a
re-post of a piece that I wrote in early October of 2007.
I
can
now see
that
my prediction
was
about
one year
too early.
Given
the recent news about the extent of the credit market meltdown, the hedge
fund collapses may be even worse than I had foreseen.
