Defaulting banks - where will it stop?

[Jan Klimkowski]

I don't think this is going to die down though. I think we will see civil disorder this winter in more than one US city. I think this one has got away.

I was in Amercia recently, in Cleveland and Detroit. I have been going to the US for many years and I have never encountered such anger as I did this time. Ordinary, working people - who are usually the 'my country right or wrong', 'America is the best' sort - this time they had the righteous anger that comes from feeling betrayed. They talked about being betrayed. They blamed the wealthy and the powerful.

A local councilman said to me, "What this country needs is a revolution." In two decades I have never heard any American use the world 'revolution' not even in jest. He was at pains to assure me he meant real revolution. He wanted me to know he was using the term, knowing what it meant. He said all this is the company of a local business leader and a local paper journalist.

It has stuck in my mind.

Interesting observations about the mood of ordinary Americans.

My fear, as ever, is that those ordinary Americans get suckered into channelling that revolutionary anger into, say, a faux McCain agenda of "dismantling Washingtonian pork barrel and liberal handouts to people too lazy to work". The end result of which would be zero "free" healthcare, the looting and destruction of social security and pensions, and Blackwater mercenaries sending the "genuine" revolutionaries to Halliburton's FEMA prison camps.

I agree with David G that this is a bank heist. However, S&L was a bank heist that didn't destroy the system. Bush & Paulson's desperation to get the "bailout bill" through strikes me as one last plundering of a system which, as David M says, cannot be saved in this manner.

Indeed, as Magda points out, the MBS may not even be backed by mortgage deeds. David M's analysis - loosely, that a "debased currency" has been created and is now being dumped by the wheelbarrow load in exchange for "real" taxpayer money - strikes me as very powerful.

S&L was a heist that left the bank standing. This heist burns the bank down...