After seeing Lava20's diary on how to beat the credit card companies at their own game, and reading the comments from people who had ideas of their own about how to eliminate credit card debt -- and the laments of some commenters who needed more help -- I didn't see anyone who had tried the method that I used.

I started to write it into a comment, but it was so long, it merited its own diary.

Let me preface by saying, I am awful with finances and something of a procrastinator, so it's easy for me to get into trouble managing debt.  This method worked for me because it was so damn simple, and entirely goal-driven.  Follow me below the fold for the explanation.

"The SEC's mission to protect investors, maintain orderly markets, and promote capital formation is more important now than it has ever been," said SEC Chairman Christopher Cox. "Today's Commission action aims to stop unlawful manipulation through 'naked' short selling that threatens the stability of financial institutions. We will continue our vigorous commitment to investors by working within the SEC and in close cooperation with our regulatory counterparts to promote the continued health and vibrancy of our markets."

- excerpt from a press release by SEC Chairman, Christopher Cox

We need to equip our nation to succeed in life.

The Fannie and Freddie show is not over yet.

In an article in the Telegraph today, Ambrose Evans-Pritchard warns that the the US Treasury may have just days to act before foreign patience snaps

Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.

Brian Bethune, chief financial economist at Global Insight, said the US Treasury had two or three days to put real money behind its rescue plan for Fannie and Freddie or face a dangerous crisis that could spiral out of control.

Please read the full article. It is enlightening, and scary.

US Treasury rescue for Fannie Mae and Freddie Mac

US TREASURY secretary Hank Paulson is working on plans to inject up to $15 billion (£7.5 billion) of capital into Fannie Mae and Freddie Mac to stem the crisis at America’s biggest mortgage firms.

The two companies lost almost half their market value last week as rumours of a government bail-out swept the stock markets, hammering share prices around the world.

Together, the two stockholder-owned, government-sponsored companies own or guarantee almost half of America’s $12 trillion home-loan market and are vital to the functioning of the housing market.

Friday:

U.S. banking regulators swooped in to seize mortgage lender IndyMac Bancorp Inc (IMB.N) on Friday after withdrawals by panicked depositors led to the third-largest banking failure in U.S. history.

California-based IndyMac, which specialized in a type of mortgage that often required minimal documents from borrowers, became the fifth U.S. bank to fail this year as a housing bust and credit crunch strain financial institutions.

John McCain:

[A] lot of our problems today, as you know, are psychological — the confidence, trust, the uncertainty about our economic future, ability to keep our own home.

And top McCain advisor Phil Gramm, echoing that McCain talking point:

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said.

"We've never been more dominant; we've never had more natural advantages than we have today," he said. "We have benefited greatly" from the globalization of the economy in the last 30 years. ...

"Misery sells newspapers," Mr. Gramm said. "Thank God the economy is not as bad as you read in the newspaper every day."

Who knew psychology was powerful enough to wipe out five banks in one year, including the third largest collapse in US history?

Besides the IndyMac collapse, the big business news story this week has been the future fate of Freddie Mac and Fannie Mae, the government sponsored mortgage lenders.

If Freddie and Fannie go under, then obviously the shareholders would get nothing, but there is also talk about bailing out the bondholders (the people who own their debt). Who are these bondholdersthat could be bailed out by the government (and taxpayers)?

The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury's most recent "Report on Foreign Portfolio Holdings of U.S. Securities."

China alone holds $376 billion!

The Clinton campaign is $23M in the hole. With $11M being a debt back to the Clintons for their loans, that leaves $12M in debts to other vendors. The Clintons are smart people, and knew in the last months of the campaign that there was a significant risk that they would be in this situation.

Bloomberg sez:

MBIA Inc. and Ambac Financial Group Inc. lost their AAA credit ratings. The biggest hospital in Sarasota, Florida, is paying the price.

David Verinder, chief financial officer of the Sarasota Memorial Health Care System, received daily e-mail messages last month informing him that interest costs on an $83 million bond issue were rising to 1.45 percent, to 1.75 percent, to 3.25 percent, to 5.9 percent, and finally to 9 percent by June 24, a more than fivefold increase.

In March, the Sarasota health network had tried to escape high rates by converting the bonds from auction-rate securities. The February collapse of the $330 billion market where rates are determined through periodic bidding drove interest costs as high as 11 percent.

The global economic system is not merely at the pop of a cyclical, natural bubble caused by overconfidence and greed, but transforming.  Ambition and greed, their present form known by "Anglo disease" as named by Jerome, has become so reckless that irreperable change is being wrought in a way that did not happen in 1999, or 1987.

While many of the points are not new, most Americans--and especially the "serious" boys and girls--remain fundamentally ignorant of what's going on.  

As reported in the New York Times today, a certain, small segment of American global society would like to allow firms to offer foreign securities directly in U.S. markets, without actually having to follow U.S. accounting rules. It appears likely that they will succeed in leaving yet another mess for Pres. Obama to clean up, since that change would work to the detriment of the vast majority of Americans.

Federal officials say they are preparing to propose a series of regulatory changes to enhance American competitiveness overseas, attract foreign investment and give American investors a broader selection of foreign stocks.

But critics say the changes appear to be a last-ditch push by appointees of President Bush to dilute securities rules passed after the collapse of Enron and other large companies — measures that were meant to forestall accounting gimmicks and corrupt practices that led to those corporate failures.

Legal experts, some regulators and Democratic lawmakers are concerned that the changes would put American investors at the mercy of overseas regulators who enforce weaker rules and may treat investment losses as a low priority.

My take...

This article, in the Roanoke Times, should be a heads up to everyone in the country.

Roanoke, Virginia is in a very temperate region, with winter temperatures falling from slightly below 20 degrees and rising to a high of over 100 degrees, with an annual average of between 60 degrees and 80 degrees.

With the startling statement:

No matter how you heat, be prepared for costs to rise significantly this winter.

our local newspaper is delivering a dire warning and begging for people to begin to prepare for the coming Fall/Winter season.

Everyone's certainly witnessing first-hand (everytime they go to the supermarket or fill their gas tank) about what's in store for us as far as the economy's concerned in upcoming weeks and months, between now and Election Day, and beyond.

I talk with friends and business associates about the state of the economy all the time, as I'm sure many of you do, as well.

Apparently, what hits home the most, when I bring this up--aside from everyone getting nailed with higher consumer prices--is when I tell them to take a look around in their communities. I ask them: "What would happen to their towns, their friends, their jobs, and their friends' jobs if the following companies no longer existed?

"But where was the Roman people to be found? Not surely amongst the mixed multitude of slaves and strangers that filled the streets of Rome; a servile populace, as devoid of spirit as destitute of property."

About 2,000 years ago, a hyper-militarized, authoritarian state dominated by professional soldiers, domestic security forces, and international financiers, publicly auctioned off their nation's most prestigious political office to the highest bidder.

This is a re-run of a post written at the end of last year, with a few added comments (in italics).

An argument that has been regularly put to use on my doom-n-gloom diaries about the economy, the dollar or the oil situation is that I've been predicting some of these things (like a recession, or a housing slowdown) for so long that they are bound to happen at some point and thus my prognoses have little value. As the old joke goes, "economists have predicted 9 of the last 4 recessions"...

I went through some of my earlier diaries - those from early 2005 - as well as others from other bloggers, to look at what I had written then, and (pat, pat on the shoulder) I'm pleased to say that they were quite on target, and provide a decent explanation of what's been happening in recent months.

So to those that say: "who could have predicted this?", I'll respond quite directly: we did, on the blogs; and quite well, including the 'what' AND the 'how', if not quite the 'when.'

Just passing along a morning read:

Debt Rattle, June 24 2008: The rise in gas prices is a joke
http://theautomaticearth.blogspot.co...

Ilargi: I’ve read several articles lately suggesting that the troubles in the US and EU finance system are caused by high oil prices. As I’ve said often before, the numbers don’t make sense. ....

When you get all puffed up about gas prices, you fail to see the overall picture: a thousand gallons of gasoline over the past year have cost about $1000 extra. Home prices fell 14.1% (Case-Shiller), or about $30.000 per home. In other words, an estimated 200 million US drivers have paid some $200 billion extra for gas, while values for the 100 million US homes have fallen by $3 trillion. And that’s just housing; trillions more have also vanished from other parts of the economy ....

It’s time to get some perspective here. The rise in gas prices so far is a joke compared to what’s happening in finance. The truly perverse effects of rising oil prices haven’t even started yet. ......

.....

I have come to some realizations and am offering to share again.
I trust you have navigated these waters well from my forecasts last
year.

I dont have the numbers and I dont need them, some financial posters
are welcome to explain if they know.

It is all a hoax so I won't bother to dignify their faux media "subprime"
news except to say that Paulson, Goldman Sacks, Citibank and all have now
lost 1000x the value of all subrimes, whereas only 10-25% of subprimes are
at risk. Neocon math? Where only 1 of 400 mortgages are in default, is
.25% of all mortgages, and subprime is a small percentage of all mortgages, do the math.

Something amiss, enough said about that, the real deal below.

Some very creative people in Charlotte created a very funny comic story of what really goes on in the world of giant banks.

So that is really what happens to pension funds and mortgages.   Hopefully not.