Ike takes a back seat to the wallet

I'm not going to blog much about Ike. I'm sick of hearing about it. The local news has been flooded with news and hillbillies bitching about 'where my gubment check?'. I'm ill from listening to it for five days. There was some old woman on the phone telling the news chopper which way to pan so she could find her house.

The rest of the country is getting financial news about the collapse of the economy. Ike is taking a back seat. People in other parts of the country have heard about it, but it seems between bits about trillions of dollars disappearing off the financial scene.

Where does all the money go? It goes nowhere. It doesn't exist. All the money they are talking about is wishful thinking and money spent, but not yet earned. It is all so complex that I'm lost.

A bond is a company or bank's way of borrowing money from investors. If you rely on the solvency of just that one company that needs money, you may not invest (lend). So, other companies back (guarantee) the bonds (loans). AIG insured bonds and bit the dust. No one told the investors the guarantor  (AIG) would go belly up if all the bonds (loans from investors) went bad at the same time.

Mortgages have for ever been worshiped as a wonderful stable place to stick your money. That is because house and land prices have been going up for centuries for the most part. People are always going to pay their mortgage before they pay anything else because that is their house. I heard somewhere that Fanny and Freddy together have more money in assets than Great Briton. Everything was swell until the bubble burst and all those loans coming up that people could not afford to pay back. Now those loans are clogging the system.

I heard that the golden parachutes constructed by the CEOs of Fanny and Freddy did not get paid off.The government told the to take a hike. That makes me feel much better for some reason.  I like the idea that the government started firing a bunch of people from the top down in those to quasi government entities. Time for some tough love.

So, when is all the turmoil going to end? Nothing is going to change until every one agrees to use some sort of solid currency in stead of basing our exchange of goods and services on promises and good intentions. I'm not talking gold necessarily. Just because it makes a bigger number on paper is no reason to throw the idea of proper balance of exchange out the window.

There are a lot of comparisons that end with '... since the great depression.' This makes me nerves.