The RNC's new bailout ad

It's nice to know that the larger American public is more discerning than our blogger here.

But I doubt there are many in the reality-based side of the political chasm who would expect otherwise.

When conservatives follow their lust for deregulation, chaos follows, fed by lies, fraud and criminal actions by otherwise "good people".

It does take quite a bit of willful ignorance to continue to believe that deregulation will do anything but make money for some sub-group of criminals, and harm the country as a whole.

ZZ, I've heard that the loan defaults are really only the trigger for this crisis. The credit default swaps are the real fuel for the fire. Through speculation and leverage there are roughly ten times more credit default swaps then actual outstanding debt. So when the investment banks defaulted they had a much greater effect than the loan defaults should have had.

Most of the parties in these CDS transactions net out their risk (they buy and sell opposite transactions), ao in theory a default should not hurt them. But AIG did not do that and their CDS obligations bankrupted them. Any bank holding a CDS where one half of the transaction goes sour is also likely to go belly up too.

Since the CDS market is unregulated and completely opaque the banks have stopped lending to each other because they don't know who has what exposure and how much. There's a concern that any bank you lend money to could go belly up overnight.

So even if you knew that the banks were lending to people who couldn't pay it back, what you couldn't know was how much leverage was in the CDS market.

greed. at our expense.