Along with (Democrats) Alan Cranston, John Glenn, Donald Riegel and Dennis DeConcini, which Republican candidate for President was a member of the infamous Keating Five?

Correct!! … John McCain

In the current play, with its gray and winding undercurrents, we also have a mixed bag of Democrats and Republicans. Greed has no political alignment, it would appear, so let none of us be casting partisan stones.

That being said, do we really want one of Keating Five leading the country through the current financial crisis? I would ask the same question if McCain were a Democrat – like the other four.

We need honesty, ethics and openness in our next leader. Tough times are heading our way, and cleaning the cesspool is going to be a big part of the job.

Again, I’m not casting partisan stones. Rather, I’m just emphasizing that “It’s the economy, stupid” is truer now than at any time since the Great Depression.

Something to keep in mind as you head into the voting booth in November, however you decide to cast your vote.

Whither Phil Gramm, and Franklin Raines…now that the proverbial merde is hitting the fan?

“A serious event occurred today. This event was the very public international recognition of more off balance sheet so called “assets” revealed as having little, if any, value.

This event is arguably the most serious financial upset ever. If you have not protected yourself, it is getting very late – maybe too late.

Your best hope is that this event is so complex that the herd of self anointed experts has no clue what that vehicle is, how large it is and therefore the profound meaning it has.

The meaning of this is not only are Freddie and Fannie’s troubles much costlier than realized, but now there is an entirely new definition of market-less financial entities with off balance sheet assets that undermine primarily the US and now international banking systems. Conduit mortgage OTC derivatives will have to be marked down now that the sun is shining on them.

The U.S. mortgage industry transformed itself in a way that has opened dangerous SIV sub prime real estate conduits to global capital markets.

A conduit loan is priced by swaps and swap spreads, thereby becoming a package of various OTC derivatives generally derived from a formula that would make Einstein look like a kindergarten mathematician.

By turning mortgages into securities, lenders created vast distances between homeowners and their mortgage holders, who can be anywhere in the world such as Australia.

US banks have written down $450 billion in bad housing loans. The revelation from NAB means that they will now certainly need to take provisions to $1,000 billion. Write-downs of $1,300 billion and perhaps even more are in the cards.”

Those with skin in the game on this side of the ocean will likely try and do everything possible to sweep the NAB situation under the carpet and forget about it as if it doesn’t exist. Watch for it.

Is Jackson’s statement not a clear admission that (he and no doubt many others, believe) every single cent of taxpayer contribution (without limit) should be sacrificed to save any loss for the holders of debt.

“by any measure” the Creditors of the USA will eventually fill in the numbers on Blank Cheque Benny’s promise.

Yes, the Creditors know it will hurt them and can adapt to that hurt. But they also know that the mirage cannot continue or they will end up worse off than the US.

I would also like to know your thoughts on what wintermute posted, namely NAB’s writedown (or was it write off?) of 90% of the value of its AAA-rated US mortgages. Needless to say, this looks like it might be a really big deal.

http://www.news.com.au/heraldsun/story/0,21985,24078649-664,00.html

That begs the question of the status of the tens of billions of similar holdings in Citibank, Merrill Lynch and even Goldman Sachs. How long can any of the big banks pretend Tier 3 assests will “come right”.