Naked Capitalism asks if the bailout trough is nearing empty and when new requests will be turned down. Is impressed, however, that all of a sudden, when it comes to aiding Big Biz and banksters, BushCo sees a need for fairness. Heh.

Many years ago, when I was in business school, one of the courses was taught by George Cabot Lodge. He said he could remember distinctly the day in 1968 that it occurred to him that the US could not simultaneously end poverty, send a man to the moon, and fight a ground war in Asia, that there were limits to what the US could do.

Similar doubts are allegedly crossing the minds of the bailout overlords, or perhaps this is an excuse to draw the line with non-financial supplicants (but having allowed American Express, clearly NOT a systemically important player, to form two bank holding companies so as to get access to cheap funding, I don't see how Detroit can be told "no"). We have said before that the Fed cannot shore up the entire financial system, or keep it from deleveraging. The Fed and Treasury have consistently endeavored to save the current institutional architecture, when that is clearly rotten, rather than try to salvage (in some fashion) the critical activities that those firms perform. Note that many of the same firms would still recapitalized, but the posture towards them would be very different. The authorities would have a clearer vision of who and what they were saving and why. (More at the link)

There are interesting quotes from a subscription only WSJ article.

Bernhard at Moon of Alabama asks if the US will find itself tapped out--links to article about the GEAB prediction of possible debt default by the US in 2009. Quotes from Barron's article, "Uncle Sam's Credit Line Running Out?" Good post and comments.

Bernhard says that based on what he's seeing, along with the lack of transparency to permit sufficient data points to be gathered, he has no real idea of where this Big Me$$ will lead.

And, while he has said earlier that declaring Credit Default Swaps or at least the side bet derivatives null and void would have helped, it's not happening, from what I can see.

I'm feeling like a long tailed cat in a room full of rocking chairs.

One of ABBA's versions.