No amount of a bailout will "save" Wall Street. They could pass $10 Trillion bailout bill but it won't help. Not one damn bit. Oh sure, it will help short-term stock prices but it will soon come crashing down and hurt like hell because not only would the national debt skyrocket but inflation will soar even faster, too, due to the quick infusion of a massive amount of cash into the economy. ("Chopper" Ben Bernanke's wet dream, though.)

Anyway...this is why it will fail, in as simple of terms as I can explain.

While the problem started with failed/bad home loans, starting off with sub-prime loans to people who might have known better but were largely sold ownership in a home with the impression that housing values will continue to appreciate and they'd be able to refinance in 2-3 years when their ARM reset to a higher interest rate.

Well, the housing bubble popped. That extra equity from appreciation? Never materialized. The existing equity from the purchase of the home? Never existed. So, thousands and thousands of home loans went bad and the homes went into foreclosure and banks started losing a significant amount of money off their bottom line.

This housing price bust then started affecting Alt-A and Jumbo loans. A sizeable percentage of these loans were NO-DOC (no proof of income was required. you say? Exactly!). Also, these Alt-A and Jumbo loans followed a similar premise for the sub-prime loans, the balance (Jumbo..or "balloon" payment) would be due after a few years. People expected house prices to keep climbing so they could refinance after the initial teaser period. Well, house prices fell to the point they couldn't and yet more people were engaging in "jingle mail" (dropping keys off in the mailbox and kissing their house goodbye). And these weren't the schlubs of society. No, these were white-collar families making good money and most having good credit (not anymore).

So, there's your trigger. *BUT* that is NOT what is causing the global credit crunch and the market meltdowns the world over.

Nope...the cause of the problem is that the "assets" (the house equity and cash from downpayments, fees, etc.) were used by financial institutions and the mortgages were sliced and diced into something called a Collateralized Debt Obligation (CDO) or a Mortgage-Backed Security (MBS). These CDOs and MBSs were sold off in pieces called "tranches". A tranch might have 1% of a mortgage or 99% of a mortgage. NO ONE REALLY KNOWS. Why? Because this type of investment was almost completely UNREGULATED and even spun off into credit derivatives and credit default swaps (even riskier types of investments that created more "money" off of nothing but risky debt...insane you say? HELL YEAH IT'S INSANE!) But Wall Street's greed for more and more short-term profits drove the search for inventive ways to make more money. As long as house prices were up or stable, all was well. No one planned on housing prices falling. Why should they? These were the Smartest Guys in the Room, eh?

So, the crux of the problem now is that banks and other lending institutions are having to actually price their assets at market value (mark-to-market) and that means trying to figure out what packages of MBSs/CDOs contain what and how much they're worth. In the meantime, no one wants to buy up MBSs/CDOs because no one knows what they're worth and much of commercial paper is backed by these now illiquid or "toxic" assets.

What's that mean? It means banks aren't lending to each other. It means Joe Public is having problems getting a home equity loan. It means McDonald's is having problems getting financing to upgrade stores. It means small businesses are having problems getting startup loans. It means banks are losing capital (assets being devalued) and that is putting them at risk of failing. Banks move further toward failure when depositors (customers) start withdrawing their money from the banks, further reducing the capital on-hand.

The Bailout Bill was intended to offload those "toxic" assets from the banks making their bottom lines look healthier. HOWEVER, in order to take part in this bailout, they would have to write down the value of their assets and that could actually force some into failure before they could benefit from the billions available from the Bailout Bill. Even then, banks are still reluctant to loan money back and forth despite today's massive $630 billion in dollar swap lines (huge bump up in credit lines) put forth by the Fed for European banks (more European banks are failing...Fortis being the main one discussed).

This is why no matter how much money is offered by a Bailout Bill that it will NOT work. And, as I've said at the start, a massive and fast infusion of cash into the financial system will cause inflation to rise even faster than it is now (already at or above 12%, the REAL rate of inflation that is...not the modified version put forth by the gov't as part of its leading economic indicators).

So, while the House Republicans offered up the lamest of all fucking excuses as to why they voted Nay in larger numbers today (oh stfu, Boner, asshat...your feelings were not hurt by Pelosi's statement), they actually did us a small favor, for now, by not making things worse and forcing the whiny asses on Wall Street expecting to be saved from their criminal and unethical behavior to have to deal with the mess they created.

I've been calling it for years and further gov't intervention (btw, the Republican Party platform on their website adamantly states they flatly do not support gov't intervention in the markets and John McCain earlier this year said would not support throwing money at a solution. heh heh...sure John.)

Anyway...there you have it. The MBSs/CDOs that are comprised of tiny bits of mortgages some small % of are laced with toxic goodness have come back to bite their creators in the ass...and bite them (and the public at large now suffering from inflation, job losses, etc.) hard.

Heckuva job, Wall Street.