Bailout or Re-liquefication?

Well, it looks like Wachovia did fold like a deck of cards, altho technically, they didn't fall into insolvency. Tell their shareholders that, as they got "acquired" for $1 a share by Citigroup; they might as well be bankrupt, according to shareholders. The silver lining is that financial behemoths like Citigroup, JP Morgan, and Bank of America are grabbing market share, and should survivie and perhaps thrive going forward. Keep your money in these big money centers--Wells Fargo has managed to keep their high credit rating as well. Among investment bankers, Goldman Sachs is the gold standard, and could be an acquisition target itself. I wouldn't touch anything else among financial stocks.

Bailout or re-liquefication? It's the latter--we need liquidity to resuscitate the economy, much like a dehydrated patient needs liquids, even if it's done intravenously. Congress doesn't get it, and I'm afraid many of our citizens don't either. Anyone looking to get a loan will too, when the bank turns them down--or if the bank itself collapses.

This financial crisis was caused by risk mis-managment, poor due diligence, sloppy underwriting, and lack of oversight--not de-regulation. Go after the culprits, and certainly don't pay executives golden parachutes--but inject some liquidity. This world economy needs capital, for it to flow again. The alternative is a return to the stone age.

Speaking of draught, the last time I passed by the San Luis Reservoir between the 101 and I-5, it looked like a backyard pond--the water levels were almost depleted. With oil prices up ten-fold, with stock markets and real estate values plummeting, are we going to have a water crisis also?

Who's next?

Is Wachovia at risk? I gave my opinion on GM earlier. Is Ford a bailout candidate? What criteria is being used to determine whether a bailout is warranted? Taxpayers are already strapped. Can they afford a bigger tax hit? I like the concept of taxpayer-funded bailouts enabling taxpayers to enjoy any upside via warrants, but even if that best-case scenario plays out 5 years from now, will the funds actually trickle down to the taxpayers? Or will the government continue to be poor stewards of said funds?