The Paulson Trillion-Dollar Bonanza: What’s Not to Like, Part I — How We Got There

In case you’ve been asleep in a cave with your hands over your eyes and cotton in your ears for the past few weeks, the American economy has been in a world of hurt recently. US Treasury Henry Paulson has put forward a far-reaching plan to deal with this crisis. As it turns out there are indeed a lot of things not to like about it, but in order to see what’s wrong with it we need to take a look at how the American economy got itself into this mess in the first place. This will tell us what’s wrong with the economy and whether the bailout plan will address that.

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It’s not about speculators.

When gas prices reach the levels we’re seeing now it’s easy and convenient to blame unnamed shadowy “speculators” for the proverbial pain at the pump. The fact is, however, that gas is so expensive because the limits of oil production are being reached while demand is ever increasing.

Tough times for bond insurers.

This is definitely not a good time to be in the bond insurance business. With large-scale insurers Ambac and MBIA — and with smaller players faring no better — one could well think that in the end the lending crisis has brought to light considerable flaws at the very basis of the American — and indeed global — financial sector. (all links above except the first lead to 6-month stock charts).

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Ah, I long for the days when Canada was a sovereign country.

A few days ago Canada’s diplomats were issued a training manual that listed the USA and Israel as countries which would potentially torture prisoners we handed over to them. I had a sinking feeling that this wouldn’t last, because Stephen Harper is such a pathetic little servile house-boy to his American masters… and I was right of course. The government today has servilely apologized to the countries that torture. The sooner we’ll be rid of those little shits that are in government today, the better off the country will be.

Deutsche Bank: Merry Christmas renters! You’re now homeless!

Nothing says “Happy Holidays” more than being evicted from your apartment because your landlord got caught up in the subprime lending mess… at least that’s what Deutsche Bank clearly thinks, as they decide it’s absolutely necessary for a partially-blind pensioner to get the f… out of a building they’re trying to sell. Bonus: they “don’t see an upside” in explaining why that is so necessary, so they can’t be bothered.