Interesting article about what happened behind the scenes a year ago when our economy almost collapsed. Put it all together and its truly a perfect storm.

Sleep-At-Night-Money Lost in Lehman Lesson Missing $63 Billion - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=20601109&sid=aLhi.S5xkemY)

Very interesting read. Although the topic is sobering, I really enjoy "forensic" reports like this one. They cut through all the chaff and get to the details.

What's striking to me is that the character of the 1940's depression was a run on the banks, and the banks didn't have the assets to manage the demand. Now, 60 years later, we had a similar run - a corporate run on commercial paper, and there weren't enough (well, any) assets to manage the demand. Each had a common underpinning - complete bankruptcy of faith on the part of the investor. The problem was the same, but in six decades the liquidity was a direct result of debt financing.

More broadly, Mug, I don't think we're out of the woods yet.

Was listening to some sort of investment show this morning, and they were talking about virtually every major government or quasi-government agency that got a bailout before is going to need a bigger one in the next few months - everyone from Fannie Mae to FDIC...more hundreds of billions of dollars....

Its a house of cards, and I think its falling down on everyone -- one card at a time. Last fall was merely a postponement of the inevitable.

I agree SoonerDave, merely buying time. Show me one society in the history of the world that has survived on an ever growing deficit.

I agree SoonerDave, merely buying time. Show me one society in the history of the world that has survived on an ever growing deficit.

No kidding..makes me wanna break open my little piggy bank and go buy some Australian gold sovereigns :tiphat:

Very interesting read. Although the topic is sobering, I really enjoy "forensic" reports like this one. They cut through all the chaff and get to the details.

What's striking to me is that the character of the 1940's depression was a run on the banks, and the banks didn't have the assets to manage the demand. Now, 60 years later, we had a similar run - a corporate run on commercial paper, and there weren't enough (well, any) assets to manage the demand. Each had a common underpinning - complete bankruptcy of faith on the part of the investor. The problem was the same, but in six decades the liquidity was a direct result of debt financing.

More broadly, Mug, I don't think we're out of the woods yet.

Was listening to some sort of investment show this morning, and they were talking about virtually every major government or quasi-government agency that got a bailout before is going to need a bigger one in the next few months - everyone from Fannie Mae to FDIC...more hundreds of billions of dollars....

Its a house of cards, and I think its falling down on everyone -- one card at a time. Last fall was merely a postponement of the inevitable.

I agree, we are not yet out of the woods, but there is light ahead of us on the trail. There are still things that could happen that could turn us back to recession and there are certainly more hills to climb. The main thing is consumer sentiment is starting to rise. People are slowly coming out of the "hoarding" mentality and I think the average consumer has learned a hard lesson in overspending.

There will be no fast recovery because unlike previous recessions, the public is tapped out and unwilling to spend their way out of it. It will, however, be a slow recovery. My view is that most of the "house of cards" has fallen already.

The point you make about the agencies is correct but it was a known already. The billions you refer to are already included in the numbers. Thats nothing new.