Depression Watch (Nov. 17 2008)

Dow Close (Mon)         8,273.58    223.73 (-)
Dow Close (Fri)           8,497.31    337.94 (-)
 Oil                         $55.18         0.23 (-)

The question on minds now, is what to do next. This is in light of "The Big Three" dire cries for help. However, the understanding of what actually has occurred seems to elude many of the "economists" in the media, and in the roles of advisors to political "leaders". Many (if not most), incorrectly, blame Reaganomics, Bush and the free-market. However, quote [2] shows that the pension funds were integrally involved with the hedge funds, private equity, and investment banks now at the center of the crisis. Pension funds had stopped being pension funds, and began acquiring companies in vast LBO (private equity deals). This moved pension funds from the relative safety of pension funds to M&A (Merger & Acquisition) and hedge funds, at the opposite end of the risk spectrum. Quote [3] shows how the government supporters of Freddie Mac and Fannie Mae, became the very core that caused the market collapse. Other articles, in the Economic Notebook, also point to the role of F. Mae & Mac (and their supporters in the government) in this economic crisis. This is not Reaganomics!! It's the socialist Community Reinvestment Act (Carter-Clinton-Dodd/Reid/Frank). Yet, no one is talking about this.

Quotes

[1]
Subsequent events, notably former Fed Chairman Alan Greenspan's admission of his failures in congressional testimony, prove that if he and other Reaganomic ideologues weren't so myopic and intransigent about proving their free-market deregulation theories, they could have acted earlier and prevented today's colossal mess. Instead, their ideology kept the bubble blowing, delayed the pop, making matters worse. - MarketWatch

[2]
State, municipal, corporate pensions lost hundreds of billions on derivative swaps - MarketWatch (same article as 1)

[3]
Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars  - MarketWatch (same article as 1)

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