This article is old. February old. But take it in with recent market developments. First RTFA, then come back.
Okay, so the problems these big banks have been having lately is that credit default swaps are proving the debt insurers can't actually cover the debt. It'd be like if you paid insurance for years on your car, but when it was stolen you found out the insurer didn't have the money to pay you.
This is why the stock markets are in absolute chaos. The sub-prime mortgage market slump proved that most CDS insurers couldn't fulfill their contracts. This in turn means that the banks who took out this insurance on credit to major corporations (and employers) like GM can't actually pay out on the corporation if it fails.
We're in a depression. Get ready for rampant unemployment and dizzying inflation.
House of cards...
Wall Street works through a simple mathematical formula: (How much money I want to make) / (How much money I have right now) = x where x is entirely irrational because you cannot divide by zero.
Yeah, it's going to suck, but oh well. All of my bonds are insured... wait a minute.......
Yeah, isn't it crazy how man created an economic system designed to be guided by an invisible hand, and then to simply make up a bunch of rules to describe how this economic system is going to behave. Then, as surrounding technology changes we don't question how it'll work with those rules and try to find ways to grow in spite of dangers.
Well, Anonymous, growth for the sake of growth is the characteristic of cancer. And, this growth for no reason other than to grow necessity of capitalism is just as terminal as the big C.
No one seems to understand how awesome this upcoming depression is. Most of us, I would imagine, have lived through celebrity bullshit like the original OJ case, Tim McVeigh, Waco, Columbine, Sept. 11, ad nauseum. All of these things went away after a short time. The middle east is far from here, so support the troops and don't think about the implications of war. Casualties (on our side) have been pretty low. What's happening now is going to last for several years, and it's going to be crushing.