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yes wall st is a creature of the american mind and is the 'american dream' which goes back to the materialism of the early settlers 'looking for gold' and the famous speech by Chief Seattle that critiques that mindset.

some reckon it won't be until banks stop credit card funding that 'cabin americans' will begin to 'get it'.

the sovereign wealth funds are bidding their time. they probably think there is another 6 months of this and then when they get three up days will begin buying western assets at bargain prices which will 'lock in' the new order [of asian/arab domination] for at least a century?

The most surprising thing was that the end of the US empire last night was totally unexpected. It has been described as like watching a train crash, and it certainly felt like that. Watching the voting figures slowly switch, from yes to no, had the inevitability of a Shakespearian tragedy, and it was indeed – for Americans – a great tragedy. Not merely was the US economic model in meltdown, with the Republicans having to sign up to a socialist manifesto, but its democratic model disintegrated in front of our eyes.

The US democratic process, which depends on continuous confrontation between two opposing parties rather than cooperation, dramatically failed to live up to the most important challenge which had faced it in recent years. However, instead of a serious debate about the future of the world, we got the spectacle of a group of schoolchildren fighting in their playground. Thus, with juvenile name-calling, ended the century of US hegemony.

US global leadership was the main victim. The question now is who will be the new global leader(s)? With its recent Olympic triumphs still burning bright, might we have to look to China; a prospect that would have, less than a couple of decades ago, seemed impossible.

Paul

"After that its full-scale banking nationalisation"

I partly agree - and the part I agree with is part of what we currently call banking. That is the 'Retail Banking' - and that is what is happening in-parts day-by-day.

The insane derivatives market should simply be declared illegal and its contracts cancelled and all money should be returned.

Reganomics and Thatcherism's light touch regulation is dead - as it is the cause of the problem. (The Republicans and the Conservatives need to wise up now! They need to move on.)

'Liberal' must be the most jelly word in the language

The Liberal Party in Aus is hard right, its a form of Commie abuse in the US, and here - smack in the middle (or so they would have us believe).

i see two possible outcomes for the political crisis:

1) house democrats and republicans continue to try to seek a joint solution. imo they are doomed to fail. the closer elections get the less to gain / more to lose for individial representatives from voting on an unpopular bipartisan proposal. i think people went home straight after the vote (as justin webb observed) because they are going into full campaign mode. those that voted no already decided that they are campaigning on an anti-wall st ticket.

2) democrats decide to push through a partisan proposal, namely outright nationalisation / recapitalisation of the failing banks (resulting in direct government control of executive compensation and the workout of bad mortgages). this is what the likes of krugman and soros, to name but two, have been arguing for from the beginning. i am very interested to understand why 95 republicans voted no, and whether they would support this partisan proposal.

also, i think crucial now is what mccain decides to do. he has a big opportunity to jump on the anti-wall st bandwagon. given how he has suffered in the polls since this crisis began, it would be a logical move for him.

Foreign ownership laws trump share prices, unless these laws are foolishly stripped away at the height of American vulnerability.

Cabin Americans are safe unless American Express can't source working capital even under existing frameworks. That can be addressed with direct measures already permitted to the Fed, not diffuse authority for asset purchases from foreign banks at "hold-to-maturity" prices and dreamy talk of Narnia-land "powers". Capital is needed here, not Caesar.

And the capital has already been distributed. Libor rates for glorified stockbrokers. Gilts have been swapped for junk bonds to the tune of 200 billion. Money is loaned at discount rates that is then sequestered by private institutions - the practical effect of prohibitive surcharges - which we oddly need to encourage away from them again with further Treasury largesse.

We have responded to capital scarcity for normal purposes by (1) adding to resource usage, i.e., issuing banking licenses to people who have criminal lawyers on retainer and speed-dial. (2) terrorising the creditors of financial institutions by zapping Washington Mutal bondholders.

The fresh interest in 'restoring confidence by encouraging panic' was an executive decision from an executive that left an army armed and unpaid at the gates of its Baghdad embassy. They are experts at incendiary stupidity. The slow boat to China embarked some time ago, but last night, some US lawmakers decided not to go deeper into hock with China or any other shark-filled pools of capital.

National emergencies require national consensus and an attendance to the public good, not (1) cheap stunts contrary to the will of the elecorate and (2) a Congress handing over budgetary decisions and every presidential manifesto for the next decade to a wildly misjudged proposal.

In no case, and under no circumstances, should the US taxpayer borrow from SWFs to buy assets from SWFs at fantasy boom-time prices.

DESIDERATA:

Same goes for buying from US financial houses. It's a foolish arrangement. Borrowing from the seller is a 21st factory coupon system imposed by law on every US taxpayer. Repayment on a net-present-value basis would mean paying at least double an already fantastic price for a worthless piece of paper that can't even to be tied to a house that probably has already been burned down to a black-streaked hulk and been photographed by the AIG insurance assessor. And Uncle Sam is paying into AIG at the moment as well. I think military men would describe this as an 'enfilade'. That's a polite word for finding you've jumped into a meat-grinding archer's gallery.

The 'necessity' of "multi-lateral" arrangements is a nonsense. The objective of this ambulance-chasing nonsense: Lift efforts to reinstate the early-90s regulatory regime (which won the economic competition with Russia) over the current one (which will lose it to China) away from the US electorate. It will be as democratic as an EU fingerprinting station.

"Pay now, pay later" will not work to ameliorate an already saturated credit market.

Do not insure or insulate the financial houses from a collective problem. Motivate stability. Put them at risk. Do not give them the capital they need to sit out a problem that hasn't yet been visited on us (a collapse either in the dollar or in perceived US credit-worthiness) . Please, do not give them the capital they will use to buy up the corpses of listed companies they haven't killed yet. Their policies have become our problem in common. Fine. But it would be sensible to ensure that it at least remains a common problem, and does not become ours exclusively.

Thanks for listening, folks. Here's to better times and a wiser world.

So what's still alive in this country (with or without sustaining myths)?

Mmm - that's a hard one!



Eureka - the class system! Blocking everything.

Yes, but when the 'plebeians' realise they don't have a choice about being 700/1000 billion USD out of pocket they are going to go ballistic. The Tarp can be vetoed, but one way or another they are going to end up paying this or a larger sum.

And this happened on George Bush's watch - although to be honest this thing has been building up for a lot longer than that.

But people should relax - they will soon realise that they don't really need SUVs, plasma screens, computers, DVD players, Wiis and the other paraphernalia of modern life.

They can't 'eat money', and when the chips are down, they will realise that it is little things like food and drink which they really need to worry about - and I wonder how few Americans have access to vegetable gardens these days ??

IS IT ME?

J Gordon Brown: We have the best system of regulation (I set it up).

John Snow: But it didn't work.

JGB: Ah, that's because, as I have been saying for 11 years, only a global sytem will do.

Me: Isn't that a hole in one - foot? Or have I missed something.

ANARCHO-CAPITALIST MARKET FORCES VS 'STALINISM'

Remember those film clips depicting Hitler's National Socialism as Social-Darwinian survival of the fittest? Isn't that 'market forces? But wasn't Hitler a Left Wing Central Planner like Staln and Mussolini?

Here's an anarcho-capitalist of sorts (he's all for return of the Gold Standard and for leaving the mess on Wall Street to market-forces) who at least puts his case and (although got himself into a bit of trouble with his belief (or more accurately, his behaviour stemming from that belief) that the USA's income tax system was a kleptocratic conspiracy).

is worth , if only to get a sense of how bemusingly polarised all this gets.

, just , although, it's getting harder and harder to know who to take isn't it?

But that's economics, it's not an 'exact science'.