Your Economy A-splode

[crimsonking1337]

So. Wow. An interesting week. Lehman Bros. goes down the shitter, Merrill Lynch gets bought under duress, causing a short sell attack on their buyer, and AIG's credit rating slips, causing our "leaders" to promise about $1 trillion of taxpayer money to sort this mess out. The financial talking heads on the news network have calculated that to be

Comments

[vfrride]

Although I agree with many of the statements the severity of this particular mess is the consequence of a rules change made in 2002 that allowed the investment banks to hold 1/40th of the normal collateral that they had to the year before. This allowed them to make significantly bigger loans and they just didn't have the capital to back it all up. (wait, isn't this what people did with the subprime loans?) That along with the collusion of the ratings agencies in their evaluation of mortgage backed securities created a lot of bad debt.

Eh, we're all screwed.