“Congratulations for sharing and rest assured your Super is protected and you have preference over the troglodytes who dominate the general population.”

You are indeed gifted with the insight that only a worldly statesman can lay claim to.

Congratulations for sharing and rest assured your Super is protected and has preferrence over the troglides who populate the general population.

As a friend of mine once said -

” Just give the great unwashed a pair of oversized breasts and a happy ending, and they’ll ‘oink’ for more every time “

A. Just pay for the pizza!

1) Where does all this money required to bail out these Companies come from—I believe its just printed and isn’t actually a “surplus” as such.So wheres it come from?

US Treasury creates bonds from nothing, loans them to Fed Reserve who loans to an ever expanding list of appoved borrowers.(Thats why Goldman Sachs and Morgan Stanley both changed their status yesterday, pure investment banks aren’t allowed at the Fed’s begging bowl.)

(2) Where does this money go —who gets it—who benefits—

Paulson wants it all for Wall St, Congress is debating who else should get some how is it used to buy worthless **** on bank balance sheets that they can’t sell anywhere else —what actually IS the debt being paid out? very complex non-exchange derivatives which have a variety of euphemisms – “mortgage securities,” “troubled assets,” etc which have lost massive value, while some are swaps which have been triggered due to Lehmans bankrupcy which means counterparties have promised a truckload of money in case of default, but don’t have.

(3) OK so these debts are paid out—who owes who for what?

If the govt buys the toxic paper, the banks owe nothing, they have just “sold” the govt something. transaction finished.
Does the Government now own the companies bailed out? Only those they’ve injected capital into in exchange for equity such as 80% AIG and in effect Fannie and Freddie Do they have to pay back the debt—ever? Debt thats written off, or bought at reduced rates doesn’t have to be paid back, but someone has to take the hit on the balance sheet

(4) OK so now the American government is in deeper and deeper debt—TO WHO?

To whoever buys the bonds, up to now, to many foreign govts, but if foreigners don’t buy, they print money themselves and owe it to themselves – national debt Whats to stop a never ending increase in debt? Nothing. Thats what will happen.
How would this debt be paid back? It can’t. Theoretically it could, like Australia has, by running govt budget surpluses until its all paid back, but the US is way too deep in debt to do that. Also its obligations are rising – medicare, social security, this etc, while its tax base drastically shrinks with a recession Who would pay it back? The loans from the Fed window will never be paid back, just rolled over forever If its never paid back then what. The Fed has a horribly impaired balance sheet which for which its had to print money to cover. The USD drops.

(5) I understand that hyper inflation will devalue the monetary system of the country involved.

Yes, thats whats coming, very serious inflation At that point of collapse what happens to start it up again as Germany did? Yes, exactly same situation – massive, unrepayable debts, lead to printing money to pay, which devalues the currency at an everincreasing rate.
Whats the process? To start over? Same as Germany, issue a new currency. Or same as Russia and many others, keep the old one and lop 3 zeroes off every so often, shafting anyone holding bank accounts with the old currency instead of hard assets at that time.

6. You didn’t ask this, but I will. Will it work?

No, the problem is way too big. The OTC derivs which are starting to unwind and fall over are 1.1 quadrillion dollars now. 1300 times bigger than the proposed bailout

I’ll keep it short and sweet — Family. Religion. Friendship. These are the three demons you must slay if you wish to succeed in business.

I wonder if they will use those rules the next time I apply for a home loan.

They are actually trying to blackmail the government now saying that if they do not get the money the country will fall into a recession, and some even say a depression. Personally I think a recession is a given, even with this bailout and once the unemployment figures come out over there it is all over. This bailout will save the rest of the world and will save them only from a depression.