As I have noted many times, a truly perfect political storm requires economic bad times, if only to get attention. So let's join Paul Krugman in checking in on our slow-moving financial crisis.
Search for security - Paul Krugman - Op-Ed Columnist - New York Times Blog: ". . . it’s not getting better."
Click through for the breath-taking graphic.
What it amounts to is that the banking system will have to be recapitalized, to offset the enormous losses from the decline in housing prices and the resulting mortgage defaults. This re-capitalization is underway, carried out primarily by the Chinese and the Arabs, using their enormous stores of dollar assets.
The Larry Kudlows of the world will naturally continue to see this as good news, further confirmation of the basic soundness of the American economy. It is anything, but. The American economy is no longer "basically sound."
The Chinese and the Arabs cannot afford to have the now basically unsound American economy collapse prematurely, so they are stepping in to shore it up, in exchange for a more than healthy ownership stake. The end result will be that Americans will not own their own banking system, and the American economy will continue to decline.
So far, corruption beyond all precedent and unprovoked aggressive war supported by lies has not provoked a political storm. Maybe, a bad economy will not, either. The absence of a political storm is a death warrant for the independent American Republic.