In '29 there was a feeding frenzy on stocks, which were purchased on margin. When the market slowed down and stocks dropped, the margin was called, folks didn't have the money, and it was done.

In '08 the margin on stocks was regulated. However, financial instruments were created which didn't have margin requirements. In fact, the term "margin" wasn't used, and "leverage" was substituted. These puppies weren't regulated and thrived on that. Very often they were purchased with 10% down. When the subprime mess occured, and these puppies dropped in value, that 10% was eaten up rapidly, and the wealthy and financial institutions couldn't cover the other 90%. So they defaulted, etc., and so on.

Absolutely the same cause and the same effect. We don't have to worry about godless communism, we are our own worst enemy. The EU, China, Russia, Japan, and others can put together alliances which can effectively confront an Uncle Sam burdened with huge deficits, trade deficits, war expenses, and now this debt.

Conservatives (wrongly) credit Reagan for winning the Cold War. I wonder if they will (rightly) credit Bush for losing the "Cold Peace".

Arf