Notes from JWR:

Courtesy of the liberal majority in The U.S Senate, the TARP Bill (which is supposedly limited to $700 billion USD) appears to be a fait accompli. (It now headed to the House of Representatives.) Both senators McCain and Obama voted for it. (So much for us making any meaningful “choice” in the upcoming presidential election.) Disregard all the headlines, folks. In my estimation, the all-fired hurry to enact the TARP bailout was driven by a.) the sudden huge jump in the LIBOR rate, and b.) the chaos that is quietly is going on in the background with derivatives. The politicians have realized that if they don’t do something, and something right now, that global economy is going to come crashing down as soon as next week. And even with the Mother of All Bailouts (MOAB), the markets may crash, anyway. Things are really that bad. At present, the global credit market is frozen solid. More than anything, it resembles a Wooly Mammoth that was suddenly frozen stiff with clover grass still in its mouth. Applying CPR won’t help the beast. But Ben Bernanke and Congress are still doing their best to resuscitate it, putting on a good show for the public. There will have to be a new credit system established, to fill the ecological niche left by the Mammoth.

The first article today is a re-post of a piece that I wrote in early October of 2007. I can now see that my prediction was about one year too early. Given the recent news about the extent of the credit market meltdown, the hedge fund collapses may be even worse than I had foreseen.