This opened the door for the banks to sell off risky mortgage bundles to investment firms who then sold them off in thousands of bits all over the world – all betting on a housing market that had no top. Brilliant financial experts created this mess. Add to that pushing people to sign up to buy houses so far out of their league, this was the perfect storm waiting to happen.

This time around, however, more than just the middle class are, and will, be affected as the chips continue to fall where they may.

Fact is, politicians are not going to change, no matter what. Suggestions from the outside are usually ignored by them.

We are probably headed to a 1929 Style Market Crash and still don't really know it quite yet. Nobody does. In addition, we are in a multi-year drought in the Western United States and parts of the Great Plains. If we have anything like a "Great Depression", it will probably wipe out the middle class, as we know it. It does not really matter who gets elected, the die is now cast. Let the chips fall where they may.

Debt IS an “asset” or “promise to pay” IF it is “straightforward” value-for-value that is fulfilled, without “tricks” or “slight of hand”.

Trouble is, we find ourselves to be the beneficiaries of an evolved “culture” of “tricks” that have been “upheld” by too many for too long, that has now “backfired”.

Yes, indeed, Mr. Gilani provides an excellent “insider” view into the deep abyss, as you say, but may I add that our “view” is also from “inside” an abyss, that only now can we “see” an unbelievable trap.

The world is now “reaping” from what the financial players have “sown”.

Some of those big financial players today are identified within the fourth paragraph of Valued Customer’s comment. In fact, such ones were identified symbolically by the ancients as “the ten kings, but without a kingdom”. By use of their huge capital clout, they are the ones who have “sucked” huge pools of cash out of so-called “normal” circulation. Unbelievable billions and trillions of this cash is “horded” and/or put to use “exclusively” in “self-interest” and not to the best interests of the population at large.

This is the reason there is “liquidity” or “currency” chaos today. Within this mess, there now exists “valuation” madness. Meaning, we cannot attach an accurate “price tag” to anything.

I expect you're right about what it will take to normalize the markets at this time, but suspect that normalization isn't the policy goal being pursued.

As you pointed out, markets exist to be manipulated, and profiteers are positioned to take advantage of the market turmoil at present, even as you did back in the day.

It seems likely that, while Paulson and Bernanke may well not have the pulse of the market, there are others that did, when they precipitated, or stood ready for, this recent deleveraging crisis. The underlying problems, while defiant of precise quantitative representation, have been obvious, and obviously potentially devastating, for the decades they have been generating.

Recently we have seen predatory assaults by BofA, the House of Morgan, and Goldman Sachs. Additionally we have observed moves by Berkshire Hathaway, Sovereign Wealth Funds, and Russian oligarchs to capture income streams from financials, and global oil producers.

Should we assume that these players are the market makers that have prepared to profit from this turmoil, or do you think that the real players yet hold their cards close?

Are these moves we should be shadowing, or just more blindfold dart tossing, with really big darts?

Thanks!

VC

Many thanks for helping me understand this mess.

Your article raises the unanswered question as to why the government fails on the 4 point plan.

It is probably much to do with the nature of politics and the overriding principle-

'politics is the appearance of seeming to do something'.

Regards

From Oz

Excellent 'insider' view into the deep abyss that potentially lies before us! The reason for the failure of AIG was never actually properly explained at the time, but I found out it was in fact due to margin calls on CDS, as you rightly say. The CDS market is a potentially even bigger nightmare than the Subprime problem by a factor of more than 10!.

None of the plans being put forward so far by any government actually identify the real cause of the problem but simply try to deal with the resultant symptoms. The pending further corrections will go a long way to addressing what went wrong; painful though it might be for all of us. I think we also need to address what we can now call an 'asset' on a balance sheet and to re-write the financial accountancy rules that allowed us to get in this mess in the first place. How can we be allowed to package up any kind of debt and call it an asset?

Mr. Gilani, by his writings today, has confessed his own practice of avarice and greed, as a so-called independent “market maker” out to make money on the backs of those “deceived” honest folks who do “real” work in service to society.

Tragically, however, his “sins” (or “crimes”) of both, “omission” and “commission” as a “whistle blower” are 'fessed up way “beyond” the “eleventh” hour.

The clock is about to strike 12 midnight!

Mr. Gilani, and far, far, too many others like him in “practice” around the globe, should have filed their exposé reports a long, long, time ago.

Such “market makers” should have sounded their warnings to “government leaders” of those who “gather the eggs” and those who “pick the fruit” and those who go to their jobs at grocery stores to “stock the shelves” in order to “service” a “culture” of worldwide “subterfuge thieves”.

Instead, the “money hungry” opportunists, by “slight of hand” chose to “hone” their “skills” upon "legalized" floors of “money exchange houses of ill repute”.

Now, the “workers” who have been “deprived of their wages” cry aloud in the streets.

2 – What's an individual investor to do in this environment? Cash seems safe till they run the printing presses. Gold is getting hit with everything else right now.