"Makes 1929 Look Like A Walk In The Park"

The UK Telegraph is reporting that Washington officials are terrified that a collapse in a bailout deal could lead to a 3,000-4,000 point loss on the Dow next week.

Officials close to Paulson are privately painting a far bleaker portrait of the fragility of the global economy than that advanced by President George W Bush in his televised address last week.

One Republican said that the message from government officials is that “the economy is dropping into the john.” He added: “We could see falls of 3,000 or 4,000 points on the Dow [the New York market that currently trades at around 11,000]. That could happen in just a couple of days.

“What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.”

If the situation is that bad, how come we were lied to? Oh yes...GOP in charge. Never mind. If there's no deal by Sunday evening when Asian markets open, it could be the end. Preznitman used his weekly radio address to tell America to suck it up and deal with the bailout.

"Many Americans are anxious about their finances and their future," Bush said in his weekly radio address. "I know many of you listening this morning are frustrated with the situation.

"You make sacrifices every day to meet your mortgage payments and keep up with your bills. When the government asks you to pay for mistakes on Wall Street, it does not seem fair. And I understand that.

"And if it were possible to let every irresponsible firm on Wall Street fail without affecting you and your family, I would do it. But that is not possible," Bush said, warning: "The failure of the financial system would mean financial hardship for many of you."

As lawmakers in Congress negotiated details of a final rescue plan amid turmoil on global markets, Bush argued that a collapsed financial sector would mean less credit, fewer new businesses and fewer jobs.

"And that would put our economy on the path toward a deep and painful recession," he argued.

I got news for you George, we're already there.

I don't think the bailout is going to help, honestly. We're being told of dire consequences if the bailout doesn't happen. My fear is the bailout happens and we plunge into a recession or depression anyway.

Remember, one month ago the economy was sound. America was fine. The Bush Boom was the most underreported story in America. These guys have been lying to us for years now. They're lying to us now. The bailout is there to give the CEO's and fat cats enough time to get to their lifeboats before the crash.

It's too late for most of us. Far, far too late. What happens if the bailout passes and we still crash?

Dow 8,000 may be generous.

Do We Need The Bailout?

It's a valid question. There are two schools of thought on it.

The first school is that government intervention in the market brought about this disaster in the first place. From a strictly Libertarian point of view, the successive bailouts and intervention by the Fed only delayed what in and of itself is an unsustainable system. America is basically far past bankrupt at this point and has only been operating by the power of an increasingly arcane system of smoke and mirrors and the Chinese and Saudis buying up our debt, since it was such an awfully good deal for them. Not anymore. We're tapped out, our neighbors are tapped out. We've got no fuel in the tank.

We're to the point now where the first school, myself included, say that paying the piper now is better than later. If we let the chips fall and manage the collapse, we might be able to dig ourselves out in a number of years. No bailout now, take the pain, recover from it. If there's a bailout, the collapse that will result from the cure (hyperinflation) will be fatal. The bailout itself is fatal for America.

The second school believes the first paragraph, but argues that the bailout is necessary now or that the whole house of cards comes down in a systemic collapse without it. In other words, bailout now, or the game ends. The lack of bailout is fatal for America.

This is not the discussion we're having in Washington right now. It's the debate we should of had last night but didn't.

One side says the bailout will kill us. The other side says the lack of bailout will kill us.

Who is right?

Shouldn't we be asking that this election?

Debate Deblogging: Morning After

CNN is saying Obama won the debate, most folks are of the mindset that it was a draw among male viewers, but Obama won handily among female ones.

Fifty-one percent of those polled thought Obama did the better job in Friday night's debate, while 38 percent said John McCain did better.

Men were nearly evenly split between the two candidates, with 46 percent giving the win to McCain and 43 percent to Obama. But women voters tended to give Obama higher marks, with 59 percent calling him the night's winner, while just 31 percent said McCain won.

"It can be reasonably concluded, especially after accounting for the slight Democratic bias in the survey, that we witnessed a tie in Mississippi tonight," CNN Senior Political Researcher Alan Silverleib said. "But given the direction of the campaign over the last couple of weeks, a tie translates to a win for Obama."

CBS had similar numbers as well.

Uncommitted voters said Obama won the debate against Republican John McCain, and more of those voters improved their opinion of the Democrat. But while 66 percent think Obama would make the right decisions about the economy, 56 percent think McCain would do so about Iraq.

Immediately after the debate, CBS News interviewed a nationally representative sample of nearly 500 debate watchers assembled by Knowledge Networks who were "uncommitted voters" - voters who are either undecided about who to vote for or who say they could still change their minds. Thirty-nine percent of these uncommitted debate watchers said Obama won the debate. Twenty-four percent said McCain won, and another 37 percent thought it was a tie.

This is where John McSame should have won hands down, Foreign Policy. He didn't. He didn't come close to delivering the knockout blow he had to have. Obama got some excellent counterattacks in and held his own. McSame came across as Cranky Old Man, not Elder Statesman.

Obama got the tie/slight win he needed here, which is far better than I thought was going to happen, I figured it would be "McSame won, Obama didn't knock him out, he has the momentum now." He doesn't. McCain had to have a KO here to get back in this. Instead I'm betting he lost ground here.

Now everyone is waiting for the bloodbath that will be Thursday nigh's debate between Joltin' Joey and Sister Sarah. I still say this one gets canceled. There is no way Palin can be allowed on live national television against Biden.

All Joey has to do is show up.

Global No Confidence Vote: Running On Empty

The story that nobody is talking about this weekend nationally should be making your head spin and your heart flutter.

Gas lines are back in America. And the thing is, they may be here to stay for quite some time.

While Congress and Bush administration officials have been working to complete a bailout plan and stem the financial contagion on Wall Street, a different kind of economic crisis emerged across the South this week: A severe, hurricane-related gasoline shortage has curtailed trucking from Atlanta to Asheville, N.C., and created a wave of panic buying among motorists.

The return of gas lines has largely flown under the radar of politicians who are usually keenly attuned, because their constituents are, to what's going on at the pump. But more of the Capitol gang should be paying attention to this.

That's because nationwide our gasoline inventory is shockingly low. Liquidity must be restored soon to this market, or we could be facing a crippling run on the gasoline bank. And if you think Americans are outraged about Wall Street, wait until their Main Street grocery store doesn't get the bread and milk delivery for a week or two.

I have family in Western NC. I can tell you that these gas shortages for the last two weeks are very real, and that these shortages are going to be way more common in the future for a number of reasons.

No slack in the system. America works these days on the Just-In-Time delivery principle. Supply routes for everything you buy are computerized and calculated to arrive "just in time" to restock supply. Warehousing stock for long periods of time wastes money. If a product is sitting in a warehouse when it could be on a store shelf or in your shopping cart, the company selling that product is losing money on it.

The stores where you live are sent what the corporations think they will sell each week and no more. This goes for groceries, electronics, sports equipment, guitars, beauty products, fast food hamburger patties and this includes gasoline as well.

Ike hit the system for the Southeast US. The Colonial Pipeline is what provides gasoline for the interior regions of the South and Mid-Atlantic: northern Alabama, northern Georgia, eastern Tennessee, upstate South Carolina and western North Carolina, as well as parts of eastern Virginia, Maryland, and even Delaware and western New Jersey are all served by this pipeline.

But the Just-In-Time system has no slack in other parts of the country right now, because inventories are so low. They are that low because storing gasoline is expensive. Wringing out slack saves refiners and gas stations money.

We had a hurricane shut down the Colonial Pipeline at the same time gasoline inventories were at 50 year lows. Result: Just in time is not in time. Shortages will continue in the South for the foreseeable future.

Now here's the real problem. Everything else in just-in-time delivery works on gasoline. Shortages on gas mean delivery interruptions for everybody else. Delivery interruptions means stores are having either sit on supply because customers can't get to the store to buy it, or that stores have shortages because of no deliveries on time. These refineries create diesel fuel too. Trucks have to have it or they stop. No diesel, no delivery.

This leads to panic buying where there are shortages. What you're seeing in cities like Charlotte, Hickory, and Asheville in North Carolina right now could end up getting a whole lot worse very very quickly as fuel shortages may very well become shortages of everything else.

No fuel means no deliveries of other just in time items...like electronics, shampoo, car parts, fertilizer, oh and things like, I dunno, food.

No gas. No fuel to truck food in. No food.

There's a cheerful thought. Panic buying of gas leads to shortages of everything else across the board, including food.

Now imagine that hitting where you live. Grocery stores start running out of food because there are no deliveries...leading to panic buying of groceries in your neighborhood.

How long would you last not being able to buy food right now? There are food shortages across the world right now, water as well. Just-in-time delivery, plus a rotting American infrastructure, plus commodity shortages around the world...that equals catastrophe for urbanized areas of the world.

If even one of these crucial links in the chain drops out, disruptions across the entire system result.

Systemic disruptions can lead to the crash of the entire system. As megacorporations grow fat off of wringing out the slack in the system, Americans grow increasingly dependent on the system just to survive.

And if the system does crash, then what? You're betting on the Federal government, this government, OUR government, to save you?

Good luck on that. What do you think would happen where you lived if there was no gasoline and no diesel within a full tank's drive of your house for a period of seven days? What would happen, honestly?

System crash.

We're seeing chaos in that part of the country. I'm pretty scared, my parents and brother live there. They're doing alright according to Dad, but those gas shortages are beginning to take their toll. Lines are bad. People are cutting way back on activities now. They're having to miss work and school. Another couple of weeks of this and things could be bad.

Very bad. The refineries are still down. No slack to help from other parts of the country. One real good weekend of panic buying could really cause serious problems.

When Barack Obama says that our economy is a national security issue, this is what I think it means. I hope he understands the issue. The Bush administration's entrenched corporate culture of greed, deregulation of industries and allowing them to police themselves, removal of consumer protections because they are "expensive regulatory barriers" and PROFIT PROFIT PROFIT has led directly to this situation.

Because we're going to see a lot more of this as the economy continues to tank. We don't have the money for infrastructure. We're almost $11 trillion in the hole now. We spent that money on Iraq and Afghanistan and Wall Street, not fixing and future-proofing our most basic infrastructure systems.

We privatized them instead. Look how that turned out. Disaster capitalism at its finest. And we're going to be in for a lot more of it in the future before we're forced to try to salvage a system on the brink of collapse.

What happens when the systems we rely on to kick in when the primary systems are down, are also down?

System crash. I've been talking about an economic system crash for months now. We're seeing that happen. But there are many, many other systems, and wringing every drop of blood out of them for PROFIT PROFIT PROFIT always PROFIT has left those systems just as vulnerable.

And all those systems are interconnected. They affect each other. If one goes down, they take the others with it. We live in a systemic, interconnected world. All those systems have to work.

Now realize Bush has been in charge of watching those systems for eight years. McSame and Palin and the GOP want to continue that same philosophy.

Scared yet? I am. You need to be too. It needs to scare you into action.

Be prepared.

Cross-posted at the Frog Pond.

StupidiNews, Weekend Edition

• Actor Paul Newman has died of cancer at age 83.
• Major House GOP opposition to the bailout plan remains.
• Palin aides pulling a no-show for subpoenas could be found in contempt.
• Condi Rice has quietly admitted to Bush administration torture discussions in 2002-03.
• Both lefty and righty political blogs are asking for last night's debate footage to be made public domain.