I don't know if you have been following the US financial mess but finally, yes finally here is a story that seems to get to the heart of the matter.1. and people rubbish those Aussies following the US election.
And you link to Rachel Lucas on your blog which is where I found the article. A broad summary -- the US financial mess has resulted from government intervention years ago in the free market to prevent financial institutions from exercising financial prudence all in the name of some type of moral equivalence, i.e., it is wrong that people from lower socio-economic backgrounds have lower access rates to borrowings - translate to Lending Institutions must be able to show that lending to all racial groups is balanced and has nothing to do with their race (how they would know the race of a borrower is an interesting question.... hmm). Result - a disaster of gigantic proportions. We've seen the same sort of thing here when various sociologists decry the different incarceration rates between aboriginal (sorry indigenous) people and white people as though these things should necessarily be the same.
The problem is that all these crappy loans were re-packaged as various financial products and on sold through the financial system effectively infecting it. The process is much the same practice as used by Insurance companies who mitigate their risk by packaging and on selling their risk across the industry world wide, so that all are exposed to major disasters rather than one firm bearing the brunt of claims for a particular incident to which it had direct exposure.
I don't know what the answer to the US mess is. For example some commentators are saying that the free market should reign (e.g., Michelle Malkin). I suppose Rachel Lucas would say it would be Congress attempting to fix a problem of its own making. And governments do not have a good track record at that sort of thing and with the amount of money that is being touted for the bailout (US$700 billion!) just think of the opportunities for fraud, rip off and so on. Some people could become very very wealthy at taxpayers expense and probably no one would necessarily be any the wiser.
It will be interesting to see how it all plays out.
2. this will affect Australian finances, along with the leaping/diving price of fuel, the slowing down of the resources boom and a few other things happening in the economic sector, Australia will be affected.