I've read three different analyses today, each framed from different philosophical orientations on the world. Yet all three come to the same conclusion.
Here is the story: The too-big-to-fail banks, investment banks, and insurance gians made risky bets, enabled by the de-regulatory environment. They obviously got in trouble. So, the U.S. Federal Reserve and the Treasury bailed them out with zero percent interest loans and government guarantees.
The "real" economy kept diving with lower consumption, no credit, and more job losses. Since "real" losses kept growing, the bailouts continued. Now, government bailout excesses and very high military spending are creating an unprecedented government debt bubble (in Treasuries).
Government bailout out money to the banks has created a speculative bubble in securities and commodities in the U.S. and also in other countries (e.g., China). This bubble in financial assets is in danger of popping. When it does, it will endanger the U.S. federal bubble because, the assumption is, only so much gov debt can be manufactured without precipating a currency crisis.
Other nations' bubbles that are deflating could cause a wave of sovereign defaults, which would cause central banks everywhere to have to issue more bailouts
The upshot is this recession is far from over and it looks like it is going to get rough...