We've finally reached what might be called the height of our financial incompetence..
A number of issues here..
AIG.. panic on Wall Street.. a Treasury/Fed combined bailout..the Federal Reserve is giving a two-year, $85 billion loan to AIG in exchange for a nearly 80% stake in the company after it lost billions in the risky business of insuring against bond defaults..
It was said here some time ago.. that the banks themselves would own the lions share of all available housing in Britain.. Oddly enough, this has come to pass faster in the US, for with this nationalisation of AIG.. Washington now owns the three largest mortgage companies in the country..
Now it will be said that this Reserve bailout is a loan.. but it's exceedingly unlikely the American taxpayer will ever see the replacement of these funds back into the public coffers.. at least, reasonably speaking, life in the US undergoes some basic changes, internally and with dealings with some of it's trading partners..
Wall Street fell 4% today. When the long-term cost of what is certainly a domino-effect in mid-stride, one might expect further falls.. diminishing consumer confidence.. and ever-increasing growth in unemployment..
5% unemployment in the States, as of this months figures.. up a full half-point from May..
That's 49 thousand more on the somewhat uncomfortable American form of the dole..
And since consumer spending is the engine of the American economy.. the last thing the economy needs is more people with less disposable income, coupled with those who have cash, are withdrawing it from investments in businesses, and turning to either commodities or turning their extra cash into precious metals..
Such is the downside of basing an entire lifestyle on paper..
We'll watch the developments closely..

Now, here in the UK, Lloyds, which used to be Lloyds/TSB.. has announced a £12 billion takeover of what used to be the Halifax Bank..then the Haliax/Bank of Scotland..now merely HBOS..
HBOS is the largest mortgage holder in Britain, and this merger will create a single institution which will handle a full third of the UK's accounts and mortgages..
Now there are few enough times that one can find occasion to agree with Alex Salmond, the First Minister of the Scottish Parliament and leader of the SNP.. but it hit it on the head, when he deplored what profit seeking speculators can effect.. for it was a basic run on the capital of that bank that forced it into a merger..
Not that Salmond had anything disparaging to say about Lloyds or HBOS..but said any merger between the two should be based on measured discussion, not a "shotgun marriage" driven by unwarranted speculation..
But such is our economy driven these days..
It's almost criminal, how those we have left in charge have been occupied elsewhere, while the clouds of this crisis built on the horizon.
And the worst is far from having been even dremt of so far it would seem..
The Trades Union Congress as assessed the job market, and is predicting that the jobless in Britain could double by 2009. Taking the entire picture into context. from inflation in China..Russia..the EU.. Britain.. The US.. that could well be a conservative prediction.
And we're all about to play musical chairs over the next short while, with the leaderships of our prime trading partners..
Ahh.. the vicissitudes of high finance.
One has to smile.
More later.. it might be mentioned that the Nikkei, at the moment, is down close to 300 points..