By July and August of 2008, the global financial meltdown was already well underway even as Wall Street and Washington, DC posed smiling faces for Main Street. The events of September, 2008 are the outward manifestations of the crumbling of the world credit system. The effects, impacts, and repercussions of the financial meltdown are just now starting to trickle down to battered Main Streets around the globe. Expect conditions to worsen far more quickly, and broadly, as the crisis lurches forward.
The disappearance of investment banks Lehman Bothers and Merrill Lynch as well as the conversion of Goldman Sachs and Morgan Stanley into bank holding companies provides clear evidence that so-called toxic, or illiquid, assets have poisoned the entire international financial system.
Western banks in both America and Europe have been nationalized, sold, or gone bankrupt.
Large retail banks (Wachovia), savings-and-loan institutions (Washington Mutual), and insurance companies (AIG) have been poisoned. Retirement savings, home investments, pensions, mutual funds, stock and bond portfolios; in short, a life's work has been placed in grave danger and unnecessary jeopardy.
So far, the United States has spent about $985 billion in corporate welfare for the Wall Street Bailout ($700 billion), the nationalization of Fannie Mae and Freddie Mac ($200 billion), and the takeover of AIG ($85 billion). Altogether that figure represents about seven percent of the US Gross Domestic Product (GDP).
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