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Face value of derivatives floating around the world is $1.14 quadrillion

“The possible problems are vastly greater"

One quadrillion. That’s 1,000,000,000,000,000 — one plus 15 zeroes, or one thousand trillion. It is incomprehensible. And that’s what’s terrifying. This summer, the Bank for International Settlements, the bank for the world’s central banks, estimated that the face value of derivatives floating around the world is $1.14 quadrillion. Derivatives are incredibly complex securities whose value is derived from some asset such as a bond, a stock, or a currency. They are used to bet on the weather and upcoming inflation, among many things. But derivatives aren’t really assets; they are crapshoots on the value of the underlying securities — a wager on another wager. They are based almost completely on borrowed money. And all too many are held by the nation’s largest banks and investment banks — yeah, one of those places where you may have parked your money.

Wall Street is now going through its greatest crisis in years. Over the weekend, Lehman Brothers went into bankruptcy, Merrill Lynch had to be bought by Bank of America, while insurance giant AIG tottered — all this following close on the heels of the government’s seizure of mortgage monsters Fannie Mae and Freddie Mac. At the center of these storms are derivatives.

Of that $1.14 quadrillion of derivatives, $548 trillion are listed derivatives, or ones that are traded on organized exchanges, and $596 trillion are over-the-counter derivatives that are basically unregulated and, essentially, unmonitored. They are traded in a chaotic marketplace in which record keeping is sloppy. Institutions that own these over-the-counter derivatives sometimes don’t know who is on the other end because these instruments have been bought and sold so many times.

Warren Buffett, America’s richest person, says derivatives are “financial weapons of mass destruction.” And that’s just what savvy economists and analysts fear: a financial nuclear reaction, with one institution after another failing after one party can’t meet its obligations. “The foot bone connected to the ankle bone, the ankle bone connected to the shin bone. Oh, mercy, how they scare!” Especially when the bones all start becoming disconnected. Early this month, the federal government seized mortgage behemoths Fannie Mae and Freddie Mac. They have $1.6 trillion of debt outstanding, and derivatives called “credit default swaps” guarantee payment of that debt. Those debt-guaranteeing derivatives motivated the government to seize the entities. There could have been a chain reaction.

On a weekend in March, the Federal Reserve rushed to keep Wall Street’s Bear Stearns from failing. It was committed to $13.4 trillion worth of derivatives. That’s chump change compared with a quadrillion. But our leaders justified pouring $29 billion into the rescue because, they said, the Dow Jones Industrial Average would plunge 2000 points if Bear went bankrupt. JPMorgan Chase took over Bear and now is a party to $90 trillion of derivatives. What would happen if Morgan came asunder?

We may find out. Last weekend, two brokerages disappeared because of excessive derivatives exposure. (Two years ago, thebanker.com named Lehman “Bank of the Year for Credit Derivatives.”) Here’s the bottom line: Derivatives with names such as credit default swaps, collateralized debt obligations, and mortgage-backed securities are the villains in the problems of Bear Stearns, Lehman, AIG, Merrill Lynch, Fannie Mae, Freddie Mac, and other financial institutions that may disappear.

The total annual output of the U.S. economy is around $14 trillion. The total output of world economies is around $67 trillion. Those who defend derivatives say that the notional (or face) value of derivatives — the $1.14 quadrillion — is misleading. The gambles between two parties net out against each other. Actually, only 1 or 2 percent of the notional value may be on the line, claim the optimists. So? Are you comforted that $10 trillion to $20 trillion could be at risk when total U.S. annual economic output is $14 trillion? Even if only a small portion of that $10 trillion to $20 trillion is actually at risk, as some claim, it is an almost inconceivable amount of money.

“The risk of a [chain] reaction is significant,” warns James Hamilton, economist at the University of California, San Diego. “The magnitude of these things is just staggering. I would have thought that the last year would have been a time of winding them down, battening down the hatches. We need to unwind these derivatives — we need to deleverage [cut down excessive debt].” But it’s not happening. “It’s more than a can of worms. It is a world full of tangled worms.”

Apologists argue that it’s not that institutions like Bear Stearns are too big to fail, it’s that they are too interconnected to fail. “But who is going to bail out the Federal Reserve? Who is going to bail out the federal government?” asks Hamilton. “Everybody wants to put their head in the sand. The derivatives are so complex. Sometimes the institutions don’t know what they’ve got.”

Indeed, the essence of white-collar fraud is contrived complexity. Derivatives are concocted by Harvard and MIT math Ph.D.s so that nobody can understand them.

Hamilton says they should be regulated. “If you are too big [or too interconnected] to fail, then you are too big not to be regulated,” he says. Following the Bear Stearns calamity, there have been moves to inject some orderliness in the over-the-counter derivatives market. There has been discussion of regulation.

“The possible compounding chain reaction to the failure of one or two major financial institutions is real and concerning,” says Arthur Lipper III, a Wall Street veteran who now lives in Del Mar. “The possible problems are vastly greater than any single or group of regulating bodies has an ability to manage.” Lipper suggests one route to reform: board members of institutions borrowing heavily to gamble on derivatives should not be indemnified against personal responsibility. Such a move “would have the immediate effect of financial institutions becoming more conservatively managed.”

Ross Starr, economist at the University of California, San Diego, says that if one party can’t make its obligation, “It causes the whole house of cards to come down. It’s not that the instruments themselves pose a systemic risk but rather that they redistribute financial losses in an unpredictable way. If it causes illiquidity to the rest of the economy, we have a problem. It’s something we haven’t quite figured out.” Amen. How can we figure out something we can’t comprehend?

The derivatives are so complicated that any regulators will have a hard time understanding them: “There’s not a lot of transparency there,” says Starr. “Regulators will not be able to focus on that. It’s a source of concern. We have not adequately come to terms with this.”

More than ten years ago, University of San Diego professor of law Frank Partnoy wrote the first exposé of derivatives abuses, F.I.A.S.C.O.: Blood in the Water on Wall Street. At that time, derivatives were not big potatoes. He admits to being surprised that the notional value has climbed to a quadrillion dollars. In a recent article for the Financial Times of London, Partnoy says that today’s derivatives crisis is similar to that of the 1990s, except it involves much more money. The crisis that forced Orange County into bankruptcy looks small by comparison with the mortgage write-downs of big financial institutions today.

He sees the end of this calamity on the horizon. “We will emerge from this crisis, and then another will hit in a few years,” he says, greatly because of moral hazard: if we keep bailing out the gamblers, they will continue to take egregious risks with borrowed money. For several reasons, including the fact that they are privy to information that others don’t have, Wall Street operators will prosper. “Finance industry employees will continue to outearn just about everybody,” says Partnoy.

Much of their great wealth is coming from you.

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One quadrillion. That’s 1,000,000,000,000,000 — one plus 15 zeroes, or one thousand trillion. It is incomprehensible. And that’s what’s terrifying. This summer, the Bank for International Settlements, the bank for the world’s central banks, estimated that the face value of derivatives floating around the world is $1.14 quadrillion. Derivatives are incredibly complex securities whose value is derived from some asset such as a bond, a stock, or a currency. They are used to bet on the weather and upcoming inflation, among many things. But derivatives aren’t really assets; they are crapshoots on the value of the underlying securities — a wager on another wager. They are based almost completely on borrowed money. And all too many are held by the nation’s largest banks and investment banks — yeah, one of those places where you may have parked your money.

Wall Street is now going through its greatest crisis in years. Over the weekend, Lehman Brothers went into bankruptcy, Merrill Lynch had to be bought by Bank of America, while insurance giant AIG tottered — all this following close on the heels of the government’s seizure of mortgage monsters Fannie Mae and Freddie Mac. At the center of these storms are derivatives.

Of that $1.14 quadrillion of derivatives, $548 trillion are listed derivatives, or ones that are traded on organized exchanges, and $596 trillion are over-the-counter derivatives that are basically unregulated and, essentially, unmonitored. They are traded in a chaotic marketplace in which record keeping is sloppy. Institutions that own these over-the-counter derivatives sometimes don’t know who is on the other end because these instruments have been bought and sold so many times.

Warren Buffett, America’s richest person, says derivatives are “financial weapons of mass destruction.” And that’s just what savvy economists and analysts fear: a financial nuclear reaction, with one institution after another failing after one party can’t meet its obligations. “The foot bone connected to the ankle bone, the ankle bone connected to the shin bone. Oh, mercy, how they scare!” Especially when the bones all start becoming disconnected. Early this month, the federal government seized mortgage behemoths Fannie Mae and Freddie Mac. They have $1.6 trillion of debt outstanding, and derivatives called “credit default swaps” guarantee payment of that debt. Those debt-guaranteeing derivatives motivated the government to seize the entities. There could have been a chain reaction.

On a weekend in March, the Federal Reserve rushed to keep Wall Street’s Bear Stearns from failing. It was committed to $13.4 trillion worth of derivatives. That’s chump change compared with a quadrillion. But our leaders justified pouring $29 billion into the rescue because, they said, the Dow Jones Industrial Average would plunge 2000 points if Bear went bankrupt. JPMorgan Chase took over Bear and now is a party to $90 trillion of derivatives. What would happen if Morgan came asunder?

We may find out. Last weekend, two brokerages disappeared because of excessive derivatives exposure. (Two years ago, thebanker.com named Lehman “Bank of the Year for Credit Derivatives.”) Here’s the bottom line: Derivatives with names such as credit default swaps, collateralized debt obligations, and mortgage-backed securities are the villains in the problems of Bear Stearns, Lehman, AIG, Merrill Lynch, Fannie Mae, Freddie Mac, and other financial institutions that may disappear.

The total annual output of the U.S. economy is around $14 trillion. The total output of world economies is around $67 trillion. Those who defend derivatives say that the notional (or face) value of derivatives — the $1.14 quadrillion — is misleading. The gambles between two parties net out against each other. Actually, only 1 or 2 percent of the notional value may be on the line, claim the optimists. So? Are you comforted that $10 trillion to $20 trillion could be at risk when total U.S. annual economic output is $14 trillion? Even if only a small portion of that $10 trillion to $20 trillion is actually at risk, as some claim, it is an almost inconceivable amount of money.

“The risk of a [chain] reaction is significant,” warns James Hamilton, economist at the University of California, San Diego. “The magnitude of these things is just staggering. I would have thought that the last year would have been a time of winding them down, battening down the hatches. We need to unwind these derivatives — we need to deleverage [cut down excessive debt].” But it’s not happening. “It’s more than a can of worms. It is a world full of tangled worms.”

Apologists argue that it’s not that institutions like Bear Stearns are too big to fail, it’s that they are too interconnected to fail. “But who is going to bail out the Federal Reserve? Who is going to bail out the federal government?” asks Hamilton. “Everybody wants to put their head in the sand. The derivatives are so complex. Sometimes the institutions don’t know what they’ve got.”

Indeed, the essence of white-collar fraud is contrived complexity. Derivatives are concocted by Harvard and MIT math Ph.D.s so that nobody can understand them.

Hamilton says they should be regulated. “If you are too big [or too interconnected] to fail, then you are too big not to be regulated,” he says. Following the Bear Stearns calamity, there have been moves to inject some orderliness in the over-the-counter derivatives market. There has been discussion of regulation.

“The possible compounding chain reaction to the failure of one or two major financial institutions is real and concerning,” says Arthur Lipper III, a Wall Street veteran who now lives in Del Mar. “The possible problems are vastly greater than any single or group of regulating bodies has an ability to manage.” Lipper suggests one route to reform: board members of institutions borrowing heavily to gamble on derivatives should not be indemnified against personal responsibility. Such a move “would have the immediate effect of financial institutions becoming more conservatively managed.”

Ross Starr, economist at the University of California, San Diego, says that if one party can’t make its obligation, “It causes the whole house of cards to come down. It’s not that the instruments themselves pose a systemic risk but rather that they redistribute financial losses in an unpredictable way. If it causes illiquidity to the rest of the economy, we have a problem. It’s something we haven’t quite figured out.” Amen. How can we figure out something we can’t comprehend?

The derivatives are so complicated that any regulators will have a hard time understanding them: “There’s not a lot of transparency there,” says Starr. “Regulators will not be able to focus on that. It’s a source of concern. We have not adequately come to terms with this.”

More than ten years ago, University of San Diego professor of law Frank Partnoy wrote the first exposé of derivatives abuses, F.I.A.S.C.O.: Blood in the Water on Wall Street. At that time, derivatives were not big potatoes. He admits to being surprised that the notional value has climbed to a quadrillion dollars. In a recent article for the Financial Times of London, Partnoy says that today’s derivatives crisis is similar to that of the 1990s, except it involves much more money. The crisis that forced Orange County into bankruptcy looks small by comparison with the mortgage write-downs of big financial institutions today.

He sees the end of this calamity on the horizon. “We will emerge from this crisis, and then another will hit in a few years,” he says, greatly because of moral hazard: if we keep bailing out the gamblers, they will continue to take egregious risks with borrowed money. For several reasons, including the fact that they are privy to information that others don’t have, Wall Street operators will prosper. “Finance industry employees will continue to outearn just about everybody,” says Partnoy.

Much of their great wealth is coming from you.

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Comments
35

Response to post #13: I think Obama is the most intelligent person to run for the office in many decades. Best, Don Bauder

Sept. 18, 2008

Response to #14: How quickly we forget president #42! I would wager he could hold his own intellectually with Obama. Unfortunately his personal baggage and peccadilloes rendered him largely ineffective. Obama is a little lighter in charisma but seems more solid personally.

Random observation: Going back to lucky number 13, prime numbers are a surprisingly good indicator of crappy presidents. Of the following list, only Hayes and Harrison are not commonly listed among the worst presidents of all time.

  1. George W. Bush
  2. George H. W. Bush
  3. Richard Nixon
  4. Herbert Hoover
  5. Warren G. Harding
  6. Benjamin Harrison
  7. Rutherford B. Hayes
  8. Andrew Johnson
  9. Millard Fillmore
Sept. 18, 2008

The question is "Who" is going to be the True Leader that we must have ASAP?

Obviously McCain can't even pick competent campaign advisors, his economic adviser Carly Fiorina was fired as the worst COB/CEO in HP history and her mouth is still running amuck like a Palin think alike perpetuating the Bush administration’s mindless mentality.

Obama appears to be much more knowledgeable, and he was brought up in the real world of hard knocks for sure, but he has yet to demonstrate True Leadership accomplishments. But this is nothing new in a congress that has had absolutely no true leaders at all for over eight years or we wouldn't be in the trouble we are in today.

We can only assume that Obama has a much better understanding of derivative corruption and greed than McCain.

Damn, “1,000,000,000,000,000” sure is an astoundingly huge number of zeroes. We’ve come a long way since Ev Dirksen’s era of corruption and greed quantified merely by "A billion here, a billion there, and pretty soon you're talking real money".

Sept. 18, 2008

I think Grant deserves to be solidly on that list too, paul. Arguably Eisenhower as well.

Sept. 18, 2008

The conclusion, as of last night that is, is that in the last eight years the republicans have brought communism to America while the democrats watched and did nothing to stop it.

However, make no mistake about it, the greediest and most corrupt Americans who brought about all of these astounding failures we are experiencing seemingly on a daily basis include both republicans and democrats, so the biggest problem we have to solve is how to restore American Democracy.

We most desperately need a true leader in Washington once again who possesses ethics, integrity, and the ability to build consensus to achieve a vision to do the right things for Americans and end the tyranny over all of our institutions by the greedy and corrupt.

Sept. 17, 2008

I think this was W's fault because rather then pay attention to global banking problems he was too busy creating tsunamis in South Asia errr...flooding New Orleans with global warming errr...lighting fires in Southern California. If only he spent more time in the oval office with interns maybe none of these messes would have happened.

Sept. 17, 2008

Sounds to me like this entire housing financing gig the banking and mortgage industries came up with was essentially one big Ponzi scheme.

Sept. 17, 2008

Sounds to me like this entire housing financing gig the banking and mortgage industries came up with was essentially one big Ponzi scheme.

This was well known 4 years ago. Me, my friends, my real estate buddies, we all know it was a bubble.

Builders were selling 85-90% of their new housing with sub prime mortgages 04-06. Only 10-15% would have qualified with normal 20-30% down financing.

So this is not a case of did the major players know-they certainly did, they went ahead and did the bad deals because of little/no regulation and greed. That simple.

If I read the market correct, then many others also did.

BTW-I loved the article Don, really hits home.

Sept. 17, 2008

Nicely presented article on something many of us understood and also something that you, Don, had warned about a number of times in the past.

As for the politics some like to front on this, it runs across the aisle. It is not exclusive to a party but is in the very essence of our current political system. Politics is the a mix of the dog and pony show misdirection and the legal aparatus of criminal-level wealth redistribution. I know such talk has traditionally been dismissed as "commie" talk, as if speaking against Corporate culture is an affront to flag waving American free enterprise. That's why we continue to struggle with where we set the line for monopolies.

Anyway, you have the money running politics. We all know it and some are better tuned into the depth that money control is than others. You also have the finance sector greed. It is aligned with corporate greed and corruption but does differ with it too on monumental scales. At the micro level, nearly every entity in the sector is a predator looking for a scheme or angle to skim more for himself. There are plenty who do nothing more than economically unproductive repackaging of securities, arbitrage trading, currency trading, etc. The veneer of the industry is a enormous collage of obfuscation. It is the natural gradient money takes. Go as far as you can in your self interest without getting into personal trouble. The metric for success in the industry is that in a nutshell.

The problem? The repackaging of securities and, as put int he article, gambles on gambles (or something like that), somewhere in the rushed tangling of this web, the sharks involbed got their necks and limbs caught in the tangles and getting cut to pieces as it tightens up. But the problem continues in that the economy is bound to them AND they have redistributed the load onto the lesser involved chumps: mom and pop and the littler and "less sophisticated" institutions.

This will meet the defining conditions of an epidemic, absolutely no doubt about it. You cannot put out a skyscraper fire with a garden hose. (Enough metaphors?) You, me, most people we know, the corner stores that still exist and others will all be pinched hard in the end. What will suffer ultimately is your and my personal standards of living. The guys in control know it and are looking out for themselves to make sure they have their soft landings with their golden parachutes. Get informed and look out for you and yours.

(Apologize, in advance to my typos which I know I always make.)

Sept. 17, 2008

Response to post #1: Alan Greenspan said over and over again that derivatives should not be regulated. The market would be the policeman, quoth he. But I don't hear anybody in the press asking Greenspan -- or Bush -- about how the financial system is apparently collapsing because of their ideological obdurateness. Best, Don Bauder

Sept. 17, 2008

Response to post #2: Have you noticed that John McCain, who was always a deregulator or non-regulator, is suddenly taking a populist line? This calamity arose from ideological rigidity, but most of all, from greed. Derivatives are neither assets nor investments. They are gambling chits. And they have taken over the world's financial system and driven it into the ground. Best, Don Bauder

Sept. 17, 2008

Response to post #3: Both the housing fraud and the derivatives scams resemble Ponzi schemes. And you thought San Diego had a monopoly on Ponzis! Best, Don Bauder

Sept. 17, 2008

Don, I'm impressed! You started warning about these derivatives products years ago.

Sept. 17, 2008

Response to post #4: And remember, those peddling mortgages just turned around and sold them to Wall Street. They didn't have to worry about defaults. Then Wall Street bundled them up, and the rating agencies gave them AAA ratings, and the packages were sold all over the world. Thousands of people should go to jail over this. They won't. Best, Don Bauder

Sept. 17, 2008

Response to post #5: It is up to all of us to make sure that the bankers, investment bankers, regulators and politicians responsible for this get what's coming to them. Write letters; tell them they belong in jail. In the 1930s, some of the malefactors, anyway, went to prison. Best, Don Bauder

Sept. 17, 2008

Response to post #9: In all modesty, I admit that I was predicting a derivatives chain reaction many years ago. My Reader column of last February on credit default swaps was a prescient one, I must say -- again, in all humility. Best, Don Bauder

Sept. 17, 2008

Response to post #14:

Damn again, I still can’t get used to a quadrillion dollar hydrogen level time bomb, a number with orders of magnitude that only astrophysicists bother dealing with, or molecular biologists who deal with the inverse number.

So the only way I can think of to deal with it is to say to hell with it, the potential consequences are simply too astounding and out of control to bother contemplating.

So I hope you are right about Obama being the True Leader who shall lead us out of this chaos.

Sept. 18, 2008

Thank you for an outstanding analysis comparing the paper value of derivatives with something more substantial like US and international economic output.

It is outstanding for actually making the comparison, something I don't think I've seen in print or online before.

Obama appears to be highly intelligent. I believe that the most intelligent before him as president was most likely Jimmy Carter, a former nuclear submarine commander. Unfortunately, many who Carter brought to Washington with him were not all that bright, just opportunistic.

Anybody remember Billy Beer?

Hopefully, if elected, Obama will have chosen his advisors and potential cabinet members more wisely, given that we are generally stuck with our family members, as mine are unfortunately stuck with me.

Sept. 18, 2008

I don't know what is the big deal about a quadrillion dollars. They were writing checks like that in Zimbabwe every day.

http://bigpicture.typepad.com/comments/2008/09/can-you-break-a.html

Dinner and a couple of beers? A billion and change. No problem! http://bigpicture.typepad.com/comments/2008/06/inflation-zimba.html

If we could just lop off 3 zeroes from the value of the outstanding derivatives, we would be in decent shape. Mugabe may be our man. He was able to shave off 10 zeroes, so three should be a piece of cake.

Sept. 18, 2008

FYI: Here is very nice visual of just how big is a quadrillion. http://www.kokogiak.com/megapenny/seventeen.asp

Sept. 18, 2008

Yes, it doesn’t really matter how many zeroes anymore because McCain’s responses to the crises have proven beyond all doubt that the republicans will continue to enrich and empower the corrupt and greedy regardless of how horrendous the consequences are to all other Americans.

If McCain is not defeated because of this fact alone then We The People will have failed to protect ourselves.

If Obama wins then the biggest question will be whether the democrats can overcome their failures in leadership so they can rebuild America once again.

Sept. 19, 2008

41. George H. W. Bush

I think we need to take #41 off the list.

True, he was not re elected, but he did free an invaded nation while building a strong coalition, goodwill and consensus with other countries around the world (which his son later destroyed).

41 also rceived the highest approval rating of any President in American history (90% after Desert Storm ended) which alone proves GHWB should not be considered a failure.

Im no Bushie fan. I have never been a Republican at anytime in my life-but the pride America felt after Desert Strom ended was unlike anything this country has seen in the last 40 years.

Sept. 19, 2008

18

I have been a Dem my entire life and simply cannot fathom a world with McCain as president. That said I am starting to be troubled about one thing with Obama. He wants to be the candidate of change yet he is surrounding himself with Washington insiders, starting with Biden. My fear is he will do the same with the rest of his advisors/cabinet and even though Dems would be in power, where is the change when it's the same old players I am all for him adding a little experience to his ticket, but how can he be a candidate for change when his choice for vp is a 25 yr washington veteran? And thinking long term, he wouldn't be a viable candidate in 8 years when he's 73, probably meaning no clearcut candidate going into the primaries, again, giving the Repubs a chance to ramp it up whele the Dems are fighting amongst themselves.

Sept. 19, 2008

Response to # 8. Don, I arrived in San Diego in 1999 utterly disgusted with New York style greed. Reading your column from then on, first at the UT then at The Reader opened my eyes to the flip-side of this so-called paradise. Got to give it your columns and insights though: I was on the verge of buying a house here but after reading your columns about the price manipulation, the mortgage scams and the long-term projections of where housing was going to go, I decided to sit on my hands and let this RE mania pass. Never have I followed better advice. Thanks for warning readers years ahead of the whole show unraveling.

Sept. 19, 2008

I hate to nitpick, but most historians give "Worst President" honors to James Buchanan. He was probably the best prepared individual in the 18th and 19th centuries to assume the presidency. Yet he flopped so badly in the run-up to the Civil War, mostly by ignoring the strife and allowing mambers of his cabinet to undermine the US, that he is still reviled. All bad, no redeeming qualities at all.

jcsuperstar shows his (her?) colors in wanting to treat Eisenhower (really a liberal and a RINO) as a failed president, while ignoring Carter's many failings. But the revisionists are busy attempting to remake Carter into a "nice" (old) man who builds houses for po' folks. He isn't, and was never, anything of the sort.

Sept. 19, 2008

Carter was probably the most decent and caring President the country has seen in the last 50 years, at least, if not longer.

But he did run the country into the ground and the Iran hostage fiasco was a disaster, void of leadership.

Sept. 19, 2008

Response to posts #s 15 and 16: I have been out of town since Thursday and haven't responded to emails since then. I agree Grant belongs on the list of the worst. Those that might not belong? You might be surprised to hear me say Nixon and Hoover. Nixon was deeply flawed, and self-destructed. But he was responsible for some important initiatives -- China, environment, etc. Hoover really wasn't as bad as he has been depicted, in my judgment. I am not saying that Nixon and Hoover were outstanding or even good presidents. But they were not necessarily among the worst. Best, Don Bauder

Sept. 22, 2008

Response to post #18: I think Bill Clinton is quite intelligent. He was not an outstanding president because he didn't spend enough time working on the job. Like Nixon, he was severely flawed, but he didn't self-destruct. Close, though. Best, Don Bauder

Sept. 22, 2008

Response to post #19: Mexico shaved off some zeroes a few years ago. Best, Don Bauder

Sept. 22, 2008

Response to post #20: Great graphic. Best, Don Bauder

Sept. 22, 2008

Response to post #21: Both Republicans and Democrats get some blame. Republicans get the most. They have been in power, and they have pursued trickle-down economic policies that have been disastrous. A Wall St. bailout would be more of the same. Best, Don Bauder

Sept. 22, 2008

Response to post #22: GHW certainly had more smarts and horse sense than his son. Best, Don Bauder

Sept. 22, 2008

Response to post #24: Yer welcome. Best, Don Bauder

Sept. 22, 2008

Belated response to post #23: Obama is for change, but he can't have all rookies on his team. Best, Don Bauder

Sept. 22, 2008

Response to post #25: Carter may be a decent person, and he is certainly smart, but I do not think he was an effective president. He tried to micromanage too much. He put too much trust in his close Georgia friends. He was not strong. I think Eisenhower is a good president. He could have gotten us into war several times, and he did not. Best, Don Bauder

Sept. 22, 2008

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