Who is getting bailed out?

It looks like the Euro-Zone / IMF bailout is on track to prevent a Greek default on their sovereign debt. I have a lot of doubts and questions over this. But here is a quick one.

Who exactly is getting bailed out? Hint: It aint Greece.

Greece will see very little of this money. More than 90% of Greece's debt is held by foreign... yep you guessed it... BANKS.

Call it what you will, this is in reality just another giant bank bailout to the tune of more than $100 billion USD. In this case it's mostly European banks of course. Greece is just the middleman. I'm not sure they will even get to feel the money on its way to the vaults of Zurich. And of course it's Germany and a handful of other countries that are stepping up with the cash. But what does it solve?

As far as I can tell, nothing. Greece is still broke . They are promising draconian austerity, about which I am dubious, and that they will get tough on tax evasion, which I find simply laughable.

So what are we left with? Another massive bailout of banks by tax payers in an effort to prop up a zombie country that was broke yesterday, is still broke today and I am willing to bet more money than I have will still be broke three years from now. When and where does this end? How much money can the EU (or the Congress here in the USA) shell out to prop up bankrupt institutions whether countries, states, or private corporations? Is there any risk left in capitalism? Or do banks and other giant mega corps get to make multi-billion dollar wagers forever, secure in the knowledge that if they win they will reap staggering private profits, and if their bet fails to pay off the tax payers can be called on to cover their losses?

It's as if someone has turned a bunch of compulsive gamblers loose in Vegas with the national credit card.

Time to Kill the Happy Talk

To ward off panics, financial media organizations are keeping Un-Happy Talk to a minimum. "We're very careful not to throw words around like 'meltdown' and 'free fall'," CNN correspondent Ali Velshi, who is getting mucho face time thanks to the meltdown and free fall, told The New York Times. The Rupert Murdoch-owned Wall Street Journal is engaging in un-Murdochian restraint, banishing words like "crash" and "pandemonium." Maybe I have a limited vocabulary, but I'm not sure how else to characterize a month in which the country's largest financial institutions, Fannie Mae and Freddie Mac, had to be nationalized; Lehman Brothers, the fourth largest investment bank, filed for Chapter 11; AIG, a component of the Dow Jones industrial average, turned over most of its stock to the government in exchange for an $85 billion loan; the Treasury Department had to guarantee money-market funds to stop people from hoarding cash under their mattresses; gigantic Washington Mutual collapsed, the largest bank failure in U.S. history; and the nation's greatest financial minds have declared that a bailout the size of the Netherlands' GDP is needed to stop the bleeding. Yes, we have to be careful about crying "fire" in a crowded theater. But calling Wall Street's meltdown a meltdown is more like crying "fire" in a crowded inferno.

Read the rest here.