The party line is that the world needs a bailout. Everyone says so. And now the senate, in its magisterial wisdom, has vowed to get back on the case until it comes up with something.

What really is going on?

Now the Europeans are getting into the act; albeit only in a minor, supporting role.  It doesn't take a genius to see that there would be hell to pay.

How is government supposed to know what the bailout is worth?  If they pay too much, the government takes a big loss.  If they pay too little, it won't bail out Wall Street enough and the economy is likely to sink into recession.

Little by little, gradually, haltingly, the commentators are putting two and two together.

Bad debts multiply. Defaults increase. Bankruptcies soar.

Not since the 1930's has the United States seen such sweeping reorganization of its economic institutions.

One way or another, real prices must come down. That’s just the way it works.

Bill Bonner writes that our modern financial Vesuvius is beginning to boil.