With the $700B bailout of America’s troubled financial institutions being printed at US mints as you read this [updated] (hold the mint press…the House voted it down…more drama to follow), it is time to take a sober look at who the real winners and losers in this deal are.

WINNER – the US economy…sort of.  This helps, but this is not the end of troubles for the US economy.  Picture a man lying in a ditch with gangrene eating both arms and both legs.  This bailout just amputated one leg and cauterized it, hopefully keeping that particular problem from killing him.  There is a lot more that is wrong with this guy than that one leg.  The bailout is helping the banks stay afloat  for a while longer.  Next up…credit cards, then corporate profits, then hyper inflation…then we’ll see what’s what.

LOSER – you, the good ole US taxpayer.  Merry, freakin’ Christmas.  The final tab will not be $700 billion, because hopefully some of the mortgages and loans that the Government buys will actually be paid of in part or full over their lifetimes.  Please do not take this out on your neighbor who was in the mortgage business.  He is probably wondering if he will still be able to buy that house at the beach with the yatch sized davits in causeway out back, or if he’ll have to find a marina slip somewhere to dock the Windfall.

WINNER – mortgage and investment bankers who gave out loans like twizzlers at a kids birthday party.  While many of these people no longer have their high paying jobs, many of these people no longer need them.  A person who earns the US Median gross income, $61,500 for their entire 30 year career will only earn $1.845 million dollars over that 30 year period.  Imagine if you earned that over a 5 year period.  Would you really need to work the other 25 years?  Well, you shouldn’t.  A friend of mine who works for Citi…still…said he saw the mortgage guys bailing around the start of 2008.  These guys weren’t stupid.  They knew what was going on.

LOSER – mortgage and investment bankers who made a mint and believed that the gravy train would roll on forever.  If they blew it as fast as they “made” it, this is one big, ugly, rainy day.  It is really hard to live like an average Joe once you get used to living a few rungs higher on the ladder.  If you ever find yourself making money faster than you can spend it, be careful…something is probably wrong with that picture.

WINNERS - politicians.  The get to look like they are really doing something to save America, if not the whole world (it really is that serious).  Forget the fact that this snafu happened right under their noses.  Forget the fact that they actually encouraged this by requiring mortgage lenders to write a certain amount of risky loans for people who had no business buying a McMansion.  Forget the fact that they didn’t even come up with the bailout idea.  Where would we be without them…

LOSERS – savers….that’s right, if you think that you’ve actually been doing the right thing by socking away 10 or 20% of your annual income, you should take a look at your stock portfolio.  If you are a stock picking genius and you haven’t lost 10% or more on your money, do not fear being left out of the carnage.  One of the sure ways to make all of these bad loans look less bad is hyper inflation.  When a jug of milk cost $8 and a 4 year old used Ford Fiesta runs you $12k and the average house for the average person costs $400,000…suddenly those old mortgages seem cheap…and they are.  It’s like taking your parents mortgage and fast forwarding 30 years.  I still look at my in-laws house and say, “Wow!  I can’t believe you only pay $300/month for your mortgage!  The taxes are more than that.”

WINNERS - current executives of companies taking bailout money.  You get to keep your parachute.

LOSERS - future executives of companies taking bailout money.  No golden parachute for you.

WINNERS – Big government addicts.  We just added 2 oversight boards (one of them doesn’t count as everybody on it is in government already), and put the US government in the mortgage business.  It doesn’t get any better than that.  I’m looking forward to the Milk Farmers bailout.  When that happens, you might want to switch to powdered milk since it will likely still be fresh.

LOSERS – De-regulation addicts.  You thought Sarbanes Oxley required a lot of red tape and created several completely new and useless industries.  Just wait until the smoke clears on this one.

Cheers!