.. Morgan Stanley, one of the two remaining major American investment bankers and a descendant of the original J.P. Morgan company, doesn't seem to be in utterly dire condition yet but is nonetheless seeking a savior, namely in Wachovia.
The Bush administration has trumpeted for 8 years that carrying massive debt is not a negative factor in the modern economy. They speak of the nation's federal finances when they say this.
The MBA president would like us to think that a $9.7 trillion 'general fund' debt isn't a big deal.
These major investment institutions are dying because they are unable to answer actual and potential margin calls because their liquidity is depleted by bad mortgage lending (and the subsequent collateral investment of that capital in other vehicles such as insurance and vehicle loans), practices that were illegal before the gradual deregulation of the industry by, among others, John McCain and Phill Gramm.
On the federal level our debts are owed to other countries who will not default because we aren't paying them back. That said, countries like China that hold our IOUs pretty much dictate the terms of how that money gets repaid, and Bush/McCain sees no need or interest in leveling the ledger anytime soon.
I think we're starting to see where that mentality gets us.
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