Oh my...oh my...how much is a soul worth?

Yesterday was another bad day on Wall Street. After gaining more than 900 points on Monday, now the Dow has given back nearly all of them. The index fell 733 points on Wednesday.

Sell the rallies in stocks. Buy the dips in gold...(and you can still do so for just a penny per ounce... )

That has been our formula for this entire decade. It still seems to be working. But now the action is on the stock market side of the trade.

What’s going on? Hank Paulson is taking desperate measures to save his friends on Wall Street. Worldwide, the rescue effort is expected to cost more than $3 trillion. At least, that was the big number on the front page of the Telegraph yesterday.

How much it will really cost is anyone’s guess. Some say the rescuers will actually make a profit. Others say it will be a total washout.

We don’t know. We just marvel at the bold bamboozle itself.

The Goldman crew – there are several ex-Goldman executives in the nation’s top financial posts – now get to decide the shape of America’s financial industry. You won’t believe this – we barely did – but Gretchen Morgenson reported in the New York Times that the decision to save AIG was made by a very small group. Not only was a recent Goldman chief in attendance – Hank Paulson – but the current Goldman CEO, Lloyd Blankfein, was there too – the only representative of Wall Street. The report went on to explain that Goldman Sachs had a lot of money at stake in AIG – about $20 billion.

We’re not accusing anyone of anything. We don’t have to. We take it for granted that the game is rigged. We’d rig it ourselves, if we had the chance.

And with $700,000,000,000 in their main man’s checking account – courtesy of the U.S. government – we have no doubt that Goldman and the rest of Wall Street’s insiders are working overtime to make sure it ends up where they want it.

But yesterday – and today – it looks like Wall Street was going to get what it deserved anyway. Stocks fell hard, and today fall even more. Crude oil is sitting at its lowest point in 13 moths – below $72 a barrel. Industrial production in the United States fell the most in close to 34 years. J.P. Morgan announced an 84% drop in next income. The feds are supposed to be rigging the game to avoid such massive losses; the fix is in...but the markets won’t stay fixed.

Yet, we’ve rarely seen such unanimous opinion on the subject. Every journal, every television commentator, every newspaper, every economist – all agree: the risk of a meltdown is too great to ignore. The feds had to take action.

“Just as there are no atheists in a foxhole, there are no economic fundamentalists in a crisis like this,” says Jared Bernstein, an economic advisor to Obama.

“Governments have at last thrown the world a lifeline,” writes Martin Wolf in the Financial Times .

“We didn’t want to do it...but we had to take action,” Hank Paulson told the world.

Nobody wants a financial meltdown; everyone agrees that rapid and forceful state intervention is necessary. Once again, here at The Daily Reckoning , we are like a man showing up at a wedding in a coonskin cap. We’re not dressed for the occasion.

Meltdown? What’s wrong with a meltdown? Why shouldn’t bankers fear to lend? Why shouldn’t prices go to what willing buyers and sellers will accept? Why should Wall Street be bailed out? Why shouldn’t investors take the losses they deserve? Why shouldn’t house prices fall rapidly? Why shouldn’t the mistakes of the past five years be corrected quickly, in other words?

The financial crisis was caused by too much ready credit. Because of it, people made mistakes. Investment mistakes. Business mistakes. Spending mistakes. Even lifestyle mistakes. Those mistakes need to be corrected. The sooner, the better. Besides, we’ve never had a real financial meltdown in America. We’d like to see what one looks like.

But everyone is against it... running scared and eager to sell his soul, if he had one, to avoid it. The Democrats, of course, never had any principles. And the Republicans only pretended to have them. And now they’re selling out their residual respect for the free-enterprise system. At least, they hope to get a good price. If they go along with Goldman & Co., they are told, they’ll be helping to avert a catastrophe. (That they might also get a slice of the $700 billion pie hardly needs to be mentioned. They are all already getting out their knives and forks.)

Our guess is that they will end up short on both ends – at the end of the day they will have nothing left...neither their (mostly) free market system...nor their money.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.