Reply #4: Ahem, the money didn't actually just vanish ---

[snot]

the biggest losses arose from credit derivatives; and the big players who bought those got made WHOLE, even though their losses would have been relatively small if they hadn't.

I.e., those guys bought insurance on your house. When your house burned down, their policies paid them off in full, even though all they'd invested in the policies was the relatively small cost of the premium.

Meanwhile, your insurance on your house wasn't really very good, so you've only recovered about 75% of the value of the house.

That's what happened when the taxpayers bailed out AIG, which in turn paid on all its credit derivatives to Goldman Sachs et al. Even thought Goldman KNEW there was going to be a fire, and had no insurable interest in your house.

In sum, yeah, a whole lot of money got sucked OUT of your and my pockets; and a whole lot of it went INTO the big guys'.