Bailing Out Failed Bailouts

Yesterday I wrote that we were Passing Thru the Eye of the Storm.

Evidence that the sky is darkening once again with financial storm clouds is the sudden increase in bailouts. While a bailout is in itself disheartening and just the absolute wrong policy choice in general, what really hurts is that they are done so poorly. Failed bailed out companies are coming back for second and third rounds and the government is throwing additional good money after bad.

GMAC May Receive Third Government Bailout in November (Update3): "GMAC Inc., the lender that received two government bailouts totaling $13.5 billion, is negotiating with the Treasury Department for a possible third lifeline next month, people familiar with the matter said."

RBS, Lloyds Get $51 Billion in Second Bank Bailout (Update3): "Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc will receive 31.3 billion pounds ($51 billion) in a second bailout from the U.K. taxpayer as the two banks agreed to cap bonuses.

The Treasury will inject 25.5 billion pounds of capital into RBS, for a total of 45.5 billion pounds, making it the costliest bailout of any bank worldwide. The government will fund about a quarter of Lloyds’s 21 billion-pound fundraising. Both banks said they won’t pay cash bonuses to workers earning more than 39,000 pounds this year."

Eventually somebody will say something... somebody will do something and stop this madness... right?!

This can't go on. Right? How is all this supposed to work out later? This is some terrible math isn't it?