Banks have to contend with this too, both personally and with those to whom they lend...the system is going wild and the government does nothing.

Note this extracted from Warren Bevan's article "The Nightmare Unfolds."

Karl Denninger has recently explained this same situation.

I like to try and keep things simple...maybe to simple, but here is my explanation of the process. Let's use my home as an example.

• Only I can take out insurance on it. If my mortgage were like the structured products used on wall street today as many people that wanted to could purchase insurance on my home.
  
  
• With thousands of people having insurance on my home they decide they want to collect, hence they burn down my home.
  
  
• They collect the insurance money and take a vacation.
  
  

That is as simple as I can put it. The many people buying insurance are only buying it to make money and must force an entity or product into bankruptcy basically to collect the insurance. Taxpayer money goes to the many people/counter-parties who have insurance on something that they don't own. And then we can't even find out who is collecting the money. It's fraud pure and simple and destroying everything in it's path.

Credit Default Swap insurance has been bought in the extreme against GE, GM, AIG, and others. The people who have this "insurance" want to collect and want very much to see these companies go under.

Here is the way Denninger put it.

Without nightly margin supervision on CDS short positions these vehicles have turned into the means to launch monstrous focused attacks on specific companies; the buyer has limited risk and virtually unlimited reward.

This is exactly like me buying fire insurance on your house, and in addition I can name the amount of insurance I want to buy, even exceeding the house's value!

How nervous will you get if I buy $10 million in "fire insurance" against your $100,000 bungalow and then start stacking up gasoline cans in my driveway?

As a direct and proximate cause of this ability to distort the market it becomes possible to create self-fulfilling prophecies almost on demand, with the people doing it profiting handsomely - at the expense of American workers and otherwise-sound companies.

When the dust clears, people who still have money will be happy to put into an investment like Tyhee that brings something out of the ground that everyone can understand as real money.

P.