Is this the week the US economy melts down?

There are so many interesting articles that I can't seem to stop reading. It's like watching a trainwreck in slow motion.

Or it's like this. I've thought for years that having George Bush and Company, Inc., running things was like having a drunken underage frat boy driving the bus with all your loved ones aboard, veering off the road, and nearing the edge of a precipice. Well, now we've officially driven off the edge. The wheels have left the ground. The bus is hurtling through space. What will happen when it hits bottom? I can't help but watch.

According to all the folk I can find who seem to know what's happening, every Fed bailout of crooks and theives just digs the chasm the bus is falling into that much deeper. Here's a selection of excerpts from astoundingly dismal and horrific posts for your entertainment:

First, a gaggle of links from today's Online Journal—

The Final Meltdown Explained:

Today’s banking crisis is the THIRD trillion dollar plus US-caused financial meltdown in the last 20 years. Each one of these crises came into being through the same basic mechanism . . . the fraudulent over-valuing of financial assets by Wall Street -- with a “wink and a nod” (and sometimes a lot more) from the White House and Congress.

The fraudulently valued assets stimulate the economy, impart the illusion of health and then, inevitably, the fraud goes too far and the whole house of card comes painfully crashing back to earth.

The three trillion dollar plus frauds were:

Fraud #1: The so-called “Savings and Loan Crisis” of the late ’80s

Fraud #2: The so-called “Tech Bubble” of the late ’90s

Fraud #3: The so-called “Credit Crisis” of today

How the scam works

The mechanism of these frauds is simplicity itself. Take a shaky financial asset and blow up its value and then sell as much of it as you can. In the “Savings and Loan Crisis,” the instrument was junk bonds. In the “Tech Bubble” it was Internet stocks. In the “Credit Crisis” it was individual mortgages collected into pools and then resold to investors.

In each case, normal, well established “bread and butter” financial principles were consciously thrown away by Wall Street with no hint of protest from federal regulators.

[detailed descriptions of the three trillion dollar scams follow...]

Mike Whitney : Grasping at Straws—

On Friday morning, Senator Christopher Dodd, the head of the Senate Banking Committee, was interviewed on ABC’s “Good Morning America.” Dodd revealed that just hours earlier at an emergency meeting convened by Secretary of the Treasury Henry Paulson and Federal Reserve chairman Ben Bernanke, lawmakers were told that “We’re literally maybe days away from a complete meltdown of our financial system.” Dodd added somberly, that in his three decades of serving in public office, he had “never heard language like this.”

The system is at the breaking point, and despite Wall Street’s elation over the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks’ balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off for or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future.

[. . .]

The malfunctioning of the markets and the freeze-over in the banking system are the outcome of a massive credit unwind instigated by trillions of dollars of low interest credit from the Federal Reserve, which was magnified many times over via complex derivatives contracts and extreme leveraging by speculative investment bankers. This has generated the biggest equity bubble in history. That bubble is now set for a ”hard-landing” which is the predictable result of an unsupervised marketplace where individual players are allowed to create as much credit as they choose.

If Paulson is not removed and his rescue plan scrapped altogether; the dollar will lose its position as the world’s reserve currency and the US government will face a historic funding crisis as foreign sources of capital dry up. That will thrust the country into a hyper-inflationary depression.

Jerry Mazza: Financial terrorism: US taxpayers bail out Wall Street criminals—

“If you want to know who to blame for the past 5 years of naked shorting, you only have two places to look: the financial brokers themselves, and the nonfeasance of a feckless SEC.” And so what goes around comes around.

But now you know. We’re under attack. Even my conservative broker said, “Somebody is making money on this.” That is just the way certain individuals made millions on 9/11, having foreknowledge of the coming event, by betting on Morgan Stanley (located in the North Tower), United and American Airlines’ stock to tank, and by betting on defense industry stocks to zoom up. The real revelation here is that the market and its so-called protective systems are offering us about as much protection from foreign and domestic attack as NORAD’s air-defense system did on 9/11. America once more is under fire.

As on that day, Cheney was in the White House bunker directing activities, and Bush was stranded somewhere listening to some school children read a goat story. And above them, some financial elites were pulling the strings to pull down the American economy and make us less than a banana republic for their continued picking. Seven years later, hardly anything has changed.

Why Elliot Spitzer was Assassinated:

The US news media failed to draw the obvious connection between the bizarre federal law enforcement investigation and leak campaign about the private life of New York Governor Spitzer and Spitzer's all out attack on the Bush administration for its collusion with predatory lenders.

While the international credit system grinds to a halt because of a superabundance of bad mortgage loans made in the US, the news media failed to cover the details of Spitzer's public charges against the White House.

Yet when salacious details were leaked about alleged details of Spitzer's private life, they took that information and made it the front page news for days.

Then some links from what have become some of my other favorite sites...

Elaine Supkis: Bailout Bill Hitting Congress September 26!

Financial Armageddon will cause the Apocalypse if the US follows Germany and Japan's examples from the Great Depression. The US is going bankrupt. Our banking system is now officially bankrupt. The rescue scheme whereby a deep in debt government bails out a deep in debt banking system always fails. The coup is not complete. We have time to argue with our rulers. I hope people are truly interested in going to DC to lobby against this bail out. Even if no one listens to us. We have to speak out. About going to DC: I now have learned that the deadline for this bail out bill is Sept. 26. If anyone wants to lobby, don't try this unless you are within 250 miles of DC. I just got a donation to help defray my own train ticket there.

IOZ: Gladitorial Combat and Other Entertainments—

400 point daily swings aren't indicative of, whadayacallit, a functioning market, but of a gang of panicked, headless chickens reacting to any bit of data with no holistic, synthetic, systemic analysis of just what the fuck is going on. Traders have absolutely no idea what they're doing, thus the wild gyrations. The notion that this is a "liquidity crisis" spurred on by sad-sack psychology, that the solution consists of a billion here, a trillion there in public-sector capital, is only that much more indicative that the geniuses running the store can't even read a balance sheet. I mean, the largest single financial entity in the world, which is the United States Federal Government is trying to rescue the so-called private economy by a.) absorbing trillions of dollars in debt obligations and b.) making multi-billion-dollar, off-the-books cash payouts from its own treasury. That ain't psychology; it's catastrophe.

I suppose this is all bad for my retirment account, but damned if I'm not enjoying it. Watching market apologists who believe that the storm is going to blow over and the ship right itself sometime in the next forty-odd days get swept overboard, food for crabs, is going to be even better. I caught a brief snippet of Kudlow the other day and thought to myself, Now there is a man with blood in his stool. At this point, these motherfuckers better hope the Large Hadron Collider swallows the fucking world. It's their only hope.

Jonathan Schwarz at A Tiny Revolution: Upside To The Bailout—

With all the gloom and doom about giving Hank Paulson $700 billion to hand out to his friends, with no oversight of any kind, it's easy to miss the upside to the bailout.

For instance:

1. An early proposal that would have allowed Wall Street executives to literally eat 100 million Americans has been discarded as "politically unfeasible."