Wall Street Meltdown–Waaa Mooo & AIG next on Deck

How the mighty have fallen! Here’s the weekly roundup for Tuesday:

1. Merrill Lynch was saved by the bell in the last few moments by Bank of America. In a merger concocted in 48 hours, the 96 year old firm made its desparate attempt to keep afloat. (As a friend of mine has put it, “What skunks are hidden in this marriage?”)

2. Washington Mutual (pronounced Waaa Moooo) is hurt in after hours trading. 5:00 a.m. UPDATE: WaMu cut to junk status by S&P

3. HP is set to slash 25,000 jobs.

4. Rumors are now popping up about Goldman Sachs and Morgan Stanley.

5. Understated problems with AIG are seemingly passed over though its shares plunged. AIG was also downgraded. Media seemingly passed AIG over because it was allowed by New York authorities to borrow some 20 billion from its subsidiaries according to an AFP article. (Borrowing from itself?  I thought they were bankrupt to begin with. That’s a new one.)

6. Last but not least, the Fed (i.e., the Federal Reserve) pumped billions more cash into the market as reported by Market Watch. UPDATE: The fed pumped in an additional $70 billion this morning. See this AP Economics article.

ANALYSIS:

What to make of this reader? When we see a shingle hanging out that says, “Established since 1789″ we think of stability and longevity. (Do not read into the year 1789 as my prediction that America is coming to an end. She isn’t, not in the least bit. God is merciful.) Couple the roundup above with several other factors.

We have to consider the Messiah’s (i.e., Obama’s) revelation that the Republican Party somehow caused all of this. And, balance that statement with McCain aka “I know nothing about the economy but the fundamentals are strong” blaming Obama’s party. Of course, the times of greatest prosperity sans the past 8 years have occurred under a Republican Congress–not a Democrat run Congress that wants to take more of our money.

Finally, We have to factor in what Alan Greenspan says; he says we’re in a “once-in-a-century” financial crisis. What? Is the old man batty? The last crisis was less than 100 years ago circa 1929! Come now. When will they ever admit the human element of a fiat money system and fractionalized banking? Never. So never mind the facts. 

So the answer of what to make of all this is simple. We’ll get through it but the fact remains that the only way to solve liquidity is to print more money–that is, printing more forces the bankers to lend. They will lend when their holdings aren’t worth holding. This means more inflation eventually, a wonderful thing for all but those on a fixed income that won’t change like the elderly. What should I care about the widow, the poor, or the elderly?That’s government’s role. All I care about is my mortgage and the fact that my student loans get cheaper by the day, right? Now we see the evil inherent in human controlled paper money. Someone always gets burned.

Despite what is happening, the day of reckoning is here. Let the greedy fall. Stay away from taxing our dollars and my property. Don’t let the government add regulations to what it caused in the first place. The market will correct government interference despite the rantings of men like Greenspan and Bernanke, the right and left respectively if one believes in the Hegelian dialectic.