Um, this is getting intense, isn't it?
IndyMac taken over by the Feds.
Now, Fannie Mae and Freddie Mac are being bailed out.
Dean Baker (over at Josh Marshall's web site) makes a salient point or two about how the well off get bailed out compared to the rest of the nation.
Regardless of the politics, this financial "correction" is starting to get intense. We could be in for a major bank run if this spreads to an entity such as Citibank or Bank of America. Still, I recall similar fearful sentiments during the Savings & Loan Crisis of the late 1980s, which followed in the wake of deregulation of savings and loans, which, before deregulation, had been seen more like we now view credit unions (credit unions are expressly non-profit, unlike savings and loans, among other differences, however). Despite the magnitude of the failures of many large savings and loans around the nation, the US managed to avoid anything like the 1929 and 1930s financial meltdown.
We shall see how lucky we'll be this time around when major banks are in a position of having to significantly write down their real estate holdings--and may also need to be bailed out due to solvency concerns.
One hunch: The oil companies may have become motivated to try and stop oil prices from going to $5 a gallon--at least before the election. The oil companies' boards of directors have too many friends in banking to allow this meltdown to happen without at least some attempt to control price increases. It would be silly to suggest the oil companies control prices at will. However, their influence, in terms of refining and distribution, which can and does affect pricing, is also undeniable.
ADDENDUM: I guess market traders had the same view as I did. A big decline in oil prices today. Now, if the oil companies start to refine more crude oil and send it to market, there will be a small glut for awhile, which will lower prices nicely for the duration of the election season (I know this would help Republicans, but of course, that's why I say the oil companies may be expected to do this...).