Friday, October 10, 2008

Bush's Speech on Economy: Deer in the Headlights

President Bush didn't say alot in this morning's talk to the nation on the financial crisis. He called credit markets locked up, but failed to say fifty big money men could unlock it, virtually overnight. He didn't share that credit default swaps, the toxic soup of Bush lauded financial innovation, continue to gum up the works.

Wall Street money houses don't trust each other. The auction on Lehman debt ended badly for those hoping to be made whole. Investor "insurance" must make up 90 cents on the dollar to debt holders. Will those Lehman credit default swaps deliver? Charges for Morgan Stanley's coverage hit 25% yesterday. That's $2.5 million for a year's "peace of mind" on $10 million of Morgan Stanley debt. Hank Paulson hit the panic button on 9-18 when they soared to $900,000. Bush didn't say the problem grew by a factor of three.

The President didn't say over $3 trillion had been mobilized to save our financial sector. He omitted the ever growing list of Wall Street demands to turn things around. That now includes no limits on FDIC insured accounts and government guarantees of all interbank lending.

Bush didn't explain how things got so bad or the specific things he'd do to make things right. His speech had a Katrina like ring...

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