Chaos on Wall Street

[CK_John]

Source: Fortune Magazine

(Fortune Magazine) -- What in the world is going on here? Why is Washington spending billions to bail out Wall Street titans while leaving struggling homeowners to fend for themselves? Why are the Federal Reserve and the Treasury acting as if they're afraid the world may come to an end, while the stock market seems much less concerned? And finally, what does all this mean to those of us who aren't financial professionals?

Okay, take a few breaths, pour yourself a beverage of your choice, and I'll tell you what's happening - and what I think is going to happen. Although I expect these problems will resolve themselves without a catastrophic meltdown, I'll also tell you why I'm more nervous about the world financial system now than I've ever been in my 40 years of covering business and markets.

Finally, I'll tell you why I fear that the Wall Street enablers of the biggest financial mess of my lifetime will escape with relatively light damage, leaving the rest of us - and our children and grandchildren - to pay for their misdeeds.

We're suffering the aftereffects of the collapse of a Tinker Bell financial market, one that depended heavily on borrowed money that has now vanished like pixie dust. Like Tink, the famous fairy from Peter Pan, this market could exist only as long as everyone agreed to believe in it.



Read more: http://money.cnn.com/2008/03/28/news/economy/disaster_sloan.fortune/index.htm?cnn=yes

---

Good read for an insider point of view.

[NMDemDist2]

1. not LBN but a good editorial and

it was posted this morning in the Stock Market Watch thread.

[samdogmom]

2. Whew! I thought something really bad happened today!

Turns out it's just another news story that leaves me disgusted by the direction our country has chosen to take!

Me? I think any one who played "below" the rules deserves to suffer now! No sympathy!

[Clear Blue Sky]

3. Typical.

Those that make the mess aren't the ones left cleaning it up...

[flowomo]

4. don't all bubbles end this way?

a lot of people walk away rich; a lot get ruined. The only defense is a knowledge of history, and the recognition it will happen again in another form. A recent article in The Atlantic suggested that the "alternate energy" sector is a good candidate for the next one.

[Warpy]

5. The chaos happened last August

when the pixie dust fell off and brokers started to look at what they'd been putting into the assets columns of banks and brokerages and finding out they were just repackaged bum housing loans in Florida and California. That's when the panic really occurred. What we're starting to see now is the beginning of the shakeout when the biggest suckers slide into insolvency at both the personal and financial institution levels as both find what little assets they have taken over by more prudent investors.

Expect the shakeout to occur for the next two years, at least.

[katty]

6. the sequel to 1980's junk bond fallout w/way,way more damage

[psychmommy]

7. our failing financial markets and our borrowing for war

makes me think what the hell is our gov't thinking. why are they waiting for near tragedy to buckle down and figure our way out of this. it is just ridiculous. thanks republicans.

[Tellurian]

8. Thats nothin..Obama has a Bill in Congress allocating $843Bill for Global Poverty

Americans need to pony up!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x5334998

[psychmommy]

9. hill needs $ to pay her bills.

hill supporters need to pony up.

[Doctor_J]

10. How many working FAMILIES could have saved their homes with Jimmy Caine's windfall

we're doomed.