Less than a week after the federal government committed $85 billion to bail out AIG, executives of the giant AIG insurance company headed for a week-long retreat at a luxury resort and spa, the St. Regis Resort in Monarch Beach, California, Congressional investigators revealed today.

And people wonder why we're pissed off about the bailouts.

ABC News: After Bailout, AIG Execs Head to California Resort

Stocks tanked Monday, with the Dow, S&P 500 and Nasdaq falling to nearly five-year lows as credit markets seized up and European governments' rush to prop up failing financial firms underscored the global reach of the credit crunch.

Chicken Little: The sky is falling! The sky is falling!
Goosey Loosey: Sure Chicken Little, we've heard this story be*WHACK!* What the hell was that?
Chicken Little: That, was the sky. Maybe next time you'll wonder if there really is something going on.

CNNMoney.com Market Report - Oct. 6, 2008

Stocks skidded Monday afternoon, with the Dow's nearly 778-point drop being the worst single-day point loss ever, after the House rejected the government's $700 billion bank bailout plan.

There won't be a deal. Buckle up and stock up. This is going to get a hell of a lot worse.

Black Monday

Washington Mutual chief executive officer Alan Fishman could walk away with more than $18 million in salary, bonuses and severance after less than three weeks on the job, according to the terms of his employment agreement.

That's a hell of a payoff for a temp job at a company that failed. How do I get one of those?

WaMu CEO Fishman might get millions for a three-week job - Sep. 26, 2008

Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion. null

Tomorrow's predictions. Between this and McCain torpedoing the financial deal, the markets drop around 500. Join in with your predictions for Friday.

WaMu is largest U.S. bank failure - Yahoo! News

No Americans say that the national economy is getting better, 13% say it is staying the same, and 82% say the national economy is getting worse.

That's zero. Talk about a consensus.

The National Economy

Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.

Excuse me?! You're a bank that just FAILED and, dodging your bankruptcy responsibilities, you've managed to set aside $2.5 BILLION for BONUSES to the people who presided over your FAILURE?

If anyone wants to know why Main Street is pissed off at Wall Street, look no further than this. This is Wall Street saying, "Fuck you!" in giant letters, to Main Street. Main Street is not amused.

Fury at $2.5bn bonus for Lehman's New York staff - Business News, Business - The Independent

Fannie and Freddie gravitated to the securities as yields on agency mortgage bonds often fell below the cost of selling their debt. In 2006, AAA rated securities backed by subprime or second mortgages averaged 0.57 percentage points more than U.S. Treasuries, according to Lehman Brothers Holdings Inc. index data. That compares with 0.48 percentage points for fixed-rate agency mortgage securities.

Understanding this one takes a little understanding leap. Fannie and Freddie buy mortgages. What we didn't know was they were also buying mortgage backed securities or in this case, bonds backed by the same mortgages they'd already bought! There ain't no fixin' this one. They bought the same bad mortgages. TWICE!

Fannie, Freddie Subprime Spree May Add to Bailout

The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks — Goldman Sachs and Morgan Stanley — to change their status to bank holding companies.

The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.

This is the death knell for the markets. What Morgan and Goldman will do in the morning is call their holders who have substantial holdings in their accounts and say to them, "We expect the current downturn to continue, and recommend that you place $100K into a commercial account with us now that we have this nice commercial bank attached. That amount will be FDIC insured, 100% protected, and we'll even give you a nice interest rate on the deposit." Their customers, scared out of their gourds by last week, will do so and the move will make the downward prediction self fulfilling.

This is a sound individual move for Morgan and Goldman, it shores up their liquidity problem, their cash holdings increase, but a disastrous move for the markets at large as the money flows out of the markets and is not reinvested in something else in the markets. It is an outflow with no corresponding inflow. It's a trigger event for 1-800-RUN.

Stack on top of it the current refusal (and wisely so) to hand a blank check to the White House on how to resolve the market crisis, and you have a recipe for catastrophe. It should not be as enormous a wreck as handing over the black check, but buckle up.

Last major investment banks change status - Yahoo! News

But Whalen said the Federal Reserve, the Treasury and Congress should "immediately devise" and announce a plan to backstop the FDIC with up to $500 billion in borrowing authority to meet cash needs for closing or selling failed banks.

It's 1929 all over again. Next up WaMu, GM, Ford, and let's go out on a limb and say... Starbuck's (five bucks for a cup of coffee?).

The Associated Press: Federal bank insurance fund dwindling