Point 2 amplification: October 17, 1987.

Interesting post, skrum.

Re point 1: We are not likely to be in for a repeat of the Great Depression because the Governments of the First World will do all they can to avoid it. Its in their interests for their economies not to fail. So,whilst they will let Jo Bloggs corner ship go under when he badly manages it, they will do all they can to rescue badly managed multinational banks for example,and out of taxpayers money,no less. Why would rich people want the valueof their stocks to fall? They dont, and they'll do all they can to ensure they wont, at the expense of Jo Bloggs and all the other ordinary taxpayers.

and re point 3..."I think that this is because the crops have been gathered in and people have more time to reflect on the future"

We're not all farmers, mate.

But we all eat food. So what is your counterhypothesis?

you just offended a lot of australians, mate. theyve got HUUUUUUUUUUGE.... tracts of land.

and i blame all this shit (pardon the french) on the government, which has like a 20% approval rating, yet still choose to pass $700B bills because politicians who thought it was a bad idea the first time, think its a good idea the second time when $100M of tax cuts are involved. who the hell in their right mind thinks that a 0.014% tax cut compared to spending makes something better? goddamn american government.

Skrum, I've no idea why October pops up more frequently, but how do you feel about the bailouts? The US govt is spending $600bn of taxpayers money,and the UK govt £50bn.

The poor bailing out the rich?

All I can say is its funny how the Capatalists want to be Socialists all of a sudden.

In other news I just refi'd my mortgage (and not to avoid default). At least someone is paying their fucking bills!!!!

All I have to say about the economy is that I'm glad I'm 28 years old and not 58 years old. My retirement and other investments has a long time to recover.

Monte, you can blame the U.S. government for this fiasco if you want. Perhaps federal regulation of banks is necessary. But the bottom line is over zealous lenders and under educated borrowers are the reason we are in this mess, and it's people like you and me that are now paying for our bills AND their bills.

I believe its $785 billion total rifty. The $85 billion already given to AIG and the $700 billion for multiple other mortgage, insurance and banking firms.

Also, i wouldn't call it "spending" the taxpayers money, it is more like investing it against their will. The idea is that the money will be regained plus interest and that everyone will be better off. Easy right?

As many have pointed out however, the plan leads us down a perplexing road. This is because the problems we are having were caused by people taking loans they couldn't pay back, and others making overly risky investments. Now our solution for this problem is to make an overly risky investment in multiple companies who probably won't be able to pay them back. Although this sounds like a stupid thing to do, you need to ask yourself, what else could we possibly do? Since it seems a bailout is indeed the only way to fix the problem (don't try to tell yourself that "waiting it out" will solve the problem...), we must be careful with our investment. Although i hate to just sit here and root for more and more regulation over the diminishing free economy, we must make sure our investment is not squandered, which means regulating the way these companies are aloud to use our money. Since they have already proven that they could not stay afloat when their own money was at stake, the chances of them coming back from the red when its not even their money at risk, on their own, are very slim. Therefore we must hold their hands through the process and ensure that this works out as a beneficial transaction for everyone.

Thraxle, the government is indeed to blame for the situation we are all in now. Sure, the idiots who took out loans above their means, and the much bigger idiots who approved those people for loans in the first place caused the problem, but the government is still at fault. If a baby eats a toy soldier and chokes to death while their parents are in the other room, it is not the babies fault, it is the parents. The baby cannot be expected to know not to try to eat the toy soldier, just as people cannot be expected not to make bad choices. We should not, and cannot in the future, allow our national economic well-being depend on the average American's economic intelligence, which is what regulation is for. We need to be the parent who eliminates as many of these small toys as we can, and watches our baby intently. Whereas the government of the past few years, helped along by John McCain, has been the parent who starves their baby for 3 days, puts it in a small room, fills the room with toy soldiers, and goes on vacation. How long do you think it would take that baby to try and eat one? How long do you think it would be before the parents come back? Now that the parents are finally home they are stuck with the corpse of a dead baby, who instead of simply being resuscitated, must now be brought back from the dead.

Now, i'm not talking about socialism or anything, but we need to learn how to step in before things get to such a dangerous point.

Well congrats to us in the states for achieving the worst 12 month fall since 1932. We are already in the second worst market since the great depression, so might as well shoot for the record right? :-/

I think picking one or two causes here does us no good, but I will do it anyway. I think the basic problem here is that there are relatively few power brokers at the upper echelons of the banking system and they have an assymmetric payoff. While their personal losses are pretty much limited to 0, the upside of their compensation is only limited in the creativity of hiding risk which equates to profit.

So, really, its worth taking risks right?

Secondarily of course we're screwed because we decided we had to make sure that minimum wage families had 250K$ houses, which they were happy to accept so long as the system didn't slap them on the face for asking for it. This was encouraged mightily by Fannie and congress.

And farming, seriously wtf?

Our Congress (435 Representatives and 100 Senators) is not cut out for direct regulation of any industry. They have enough trouble dealing with professional baseball.

Our Federal Reserve chairman, Ben Bernanke, is not coming up for re-election in three weeks. Federal Reserve Board of Governors members serve staggered 14-year terms and do not answer to Congress for their budget. They have the power to act quickly and have done so, pumping $630 billion (I think) so far of liquidity into the system. Our remaining investment banks morphed into commercial banks because they know they would rather be regulated by the Federal Reserve than by Congress.

I mentioned crops, not farmers. There may not be many farmers left, but they produce a lot of stuff. The planting and growing of the stuff needs a lot of financing and there is an annual cycle of tying up of financial capital in the agricultural sector.

The best commentator on the crisis that I have found so far is "Blackhedd" who sometimes posts at www.redstate.com.