The Securities and Exchange Commission now believes the “Ponzi” scheme that big-time financial advisor Bernard Madoff stands accused of spanned some three decades.

The SEC estimates the losses from this scheme could top $50 billion for some of the world’s leading financial firms, individual investors, and charitable foundations. If proven true, the crime Madoff stands accused of could turn out to be one of the biggest frauds ever perpetrated on Wall Street.

Given that we are currently deep in a recession and that many of the nation’s largest financial institutions are struggling just to stay afloat, it may come as no surprise that most Americans are not particularly optimistic about our economy. In fact, a new CNN/Opinion Research Corporation poll reflects just how disillusioned many Americans have become.

1- 74% of Americans polled said they believe Madoff’s behavior is par for the course on Wall Street. That means that 3 out of every 4 Americans think the deception and dishonesty surrounding the Madoff’s case are endemic in the financial system. Dear God let’s hope that’s not the case!

2- 59% of Americans polled think there is too little regulation of financial institutions. That’s a 9% increase from when this question was asked only three months back. No doubt that jump is fueled by the dismal economic headlines of late and the shock and scope of Madoff’s alleged scheme.

3- 29% of Americans polled would keep their money under the mattress, if they were handed a thousand dollars. Just under a third of those polled told CNN they would rather keep their money at home, instead of depositing it in a bank or investing it in stocks or bonds. With numbers like these, you got to wonder how much the Madoff case will cost financial advisors their business.

That last finding may be the most troubling of all, given that our financial system depends on investment and savings to finance loans for everything from building houses to buying cars. Remember It’s a Wonderful Life– the scene where George Bailey tries to stop a run on the bank by people scared witless about their personal finances? Those people aren’t that different from many of the Americans CNN polled. Here’s what George says trying to calm the townspeople:

“…You're thinking of this place all wrong: as if I had the money back in a safe. The money's not here. Your money's in Joe's house… and in the Kennedy house, and Mrs. Macklin's house, and a hundred others. Why, you're lending them the money to build, and then, they're going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?”

In the movie, the people all see the point and agree to keep their money in the bank. If only today we had a George Bailey figure to counteract the scheming that Madoff and others stand accused of.

I've been writing a lot lately about the desperate straits in which Detroit's Big 3 automakers currently find themselves. The saga started with the CEOs of Ford, Chrysler, and General Motors jetting (literally) down to Washington, DC, asking Congress for a $25 billion bailout, then being instructed to come back when they had a more definite plan for how that money would be spent.

Within weeks, the CEOs each made a public mea culpa by actually driving (imagine!). Back on the Hill, they sheepishly upped the ante to $34 billion, though they still lacked a well-defined framework for spending.

Advocates of the bailout weren't able to muster enough support and the effort collapsed. So the crestfallen carmakers crawled over to the White House, holding out their empty pockets. The Bush administration signaled that they would indeed help the automakers by drawing on the $700 billion bailout intended for the financial industry.

But while that plan continues to take shape, the automakers remain strapped for cash, especially General Motors and Chrysler, both of which predicted they would close in short order without some sort of immediate government aid.

Let's take a look at some of the drastic measures that the nation's leading automakers are taking just to stay afloat.

1) Chrysler will close 30 U.S. plants for one month. The automaker usually halts production for about two weeks during the holiday season, but this year the closure will be extended by about two weeks. Employees will not receive their full pays, but will get a combination of state unemployment benefits and partial wages from Chrysler.

2) Ford will keep all but two of its factories idle for an extra week over the holidays. This is especially disturbing as Ford is considered to be the best-off of the Big 3, which is a bit like saying that you’ve got the best deck chair on the Titanic.

3) General Motors will keep 30 percent of its North American manufacturing capacity idle for the first quarter of 2009. That will take 250,000 vehicles out of production. Employees will be "temporarily laid off" and will receive partial pay from the company, and can apply for state unemployment benefits.

Production cuts of this magnitude are just another indication of how weak the demand for cars is right now. The automakers largely blame the credit crisis, claiming that buyers are out there, but they aren’t able to secure loans to actually get the vehicles. Opponents say that consumers have wised up and no longer want gas-guzzling cars or unnecessarily hefty trucks.

Whatever the cause, lots across the country are packed with a glut of unsold vehicles. Even if the White House and Treasury do deliver on the auto bailout money, it will take a long time to clear out the surplus, and, unfortunately, that means large production cutbacks.

As anyone fearing for his job will tell you, recessions are not good news. But sometimes recessions can have their silver linings: the Labor Department reported on Tuesday that the Consumer Price Index, an important reading on inflation, dropped by 1.7 percent in November.

That's the second straight monthly decline and the largest one-month drop since February 1947. And to consumers who saw energy and food prices skyrocket during the first half of 2008, it’s a welcome relief.

So, in other words, while you might be cutting back on spending, your dollar may be going a little further than it used to. But before you go on a spending spree, let's look a little closer at this report.

1. The drop in CPI was led by tumbling energy costs. If you've been to a gas station lately, you know what we're talking about here - gasoline prices right now average $1.66 a gallon nationwide. Since hitting a record high of $147 a barrel in July, oil prices have come down some 60 percent - a victim of so-called "demand destruction." The real fears of a global recession have sapped worldwide demand for crude. To illustrate, on Monday oil settled at just $44.51 a barrel.

2. The Core CPI - which excludes highly volatile food and energy prices - was flat from October to November. Now this doesn't mean you're not saving money because, as it happens, food and energy costs make up a lot of most people's budgets. Plus, the Core CPI actually dropped 0.1% in October - the first drop in 25 years - so staying flat is not too shabby for consumers.

3. Deflation remains unlikely, according to most economists. Deflation represents a large, sustained drop in consumer prices over many months and, though many analysts are expecting more drops in consumer prices in the short term, talk of deflation is still very premature at this point.

No one can deny that it's nice when your salary buys you a little more, but the underlying cause - economic stagnation - is bad, bad news. It's the same reason that we are seeing drastic rises in unemployment and troubling developments on other economic fronts. So enjoy it while it lasts but, even when prices start to rebound, you can be happy that maybe our economy has turned a corner and will be heading to a safer place.

We are officially in a recession and, as it turns out, have been for a year. Just like many individuals, most companies are tightening their belts, and, unfortunately, that often means cutting jobs. The latest numbers are disheartening, to be sure, and the forecast in the short-term offers little hope.

Let’s get right into some of the latest finds about unemployment.

1) Last week new unemployment insurance claims rose to a 26-year high. That’s higher than analysts were expecting. There were 573,000 new requests for unemployment insurance - an increase of 58,000 from the week before. Plus, the number of Americans who were continuing to collect unemployment also hit a 26-year high.

2) A new report predicts the U.S. will lose 2 million jobs in 2009. A quarterly forecast put out by UCLA’s Anderson School of Management predicted that the U.S. unemployment rate will rise to 8.5 percent by late 2009. For context, last month the unemployment rate was reported at 6.7 percent.

3) Last week alone, CNN confirmed 43,402 job cut announcements. During the week starting December 1, a slew of companies announced that tough economic times would force them to swing the ax. Topping the list were AT&T, which will shed 12,000 employees, and JP Morgan Chase, which will trim 9,200 Washington Mutual jobs.

On his blog last Friday, former Secretary of Labor Robert Reich actually pondered whether we might rightfully call this a Depression, offering this discouraging tidbit: “When FDR took office in 1933, one out of four American workers was jobless. We're not there yet, but we're trending in that direction.” If you’re stout-hearted, you can read the whole depressing Depression posting here .

I’ll close with this advice for those of you who have jobs: do everything you can to keep them. Be diligent. Work extra hours. Walk your boss’s beagle. Whatever you can do to stay off the chopping block right now is worth it.

On Monday, Congressional leaders were working hard to fast track a short-term bailout of the U.S. automakers that would provide loans to keep the car companies functioning through March 2009. The idea is to keep Detroit's Big 3 automakers afloat until the new Congress and incoming Obama administration take the reins and work out a long-term solution.

Some Republicans continue to voice concerns over the bailout package, and its terms are still in flux, though it seems clear that the automakers will not at this time be getting the $34 billion that the Big 3 CEOs requested during their visit to the capital last week.

Let’s take a look at how the proposed bailout is shaping up as of now:

1) The government could deliver up to $15 billion to the Big 3 as early as December 15. That should be enough to keep General Motors and Chrysler from imminent financial collapse. Ford is on slightly better cash footing than its peers and says it most likely won't need to tap the loans.

2) The government would have the right to buy stock in the car companies up to 20% of the loan's value. That means that our government could become a major shareholder in the Big 3 automakers. The automakers that take loans will also have to agree to limits on executive compensation and dividend payments to shareholders.

3) The White House would name a so-called "Car Czar" to oversee the companies' restructuring. Whoever holds this well-named position would supervise the reorganization of the car-companies and have the right to negotiate with unions, car parts makers, and other stakeholders.

One interesting little fact: if this bailout is passed, the $15 billion will not come from the $700 billion in bailout money controlled by the Treasury, but rather from the Energy Independence and Security Act approved by Congress a full year ago to help the Big 3 develop more energy-efficient cars.

That's deeply ironic, because the Big 3 have been driven to their current desperate state largely because they haven't been able to sell the very gas-guzzlers that that Act was designed to phase-out in the first place!

If you’re an ambitious little automaker-bailout enthusiast, you can read the full proposal here.

The CEOs of General Motors, Ford, and Chrysler are back in Washington on Thursday and Friday trying to convince Congress to bailout the U.S. auto industry. On Tuesday, the CEOs unveiled how they would use the bailout money, which was originally estimated at $25 billion and has now ballooned to $34 billion. GM and Chrysler stressed that they would need the money quickly to avoid running out of money in the short-term.

Many legislators remain skeptical about the bailout, particularly after the less-than-impressive showing the CEOs made last time they were in Washington. (They each arrived on a private jet.) But even if the CEOs walked from Detroit to the capital on their knees, it’s a hard sell, made harder by the price jump.

Let’s take a look at some of the possible scenarios that could play out.

1) The Congress agrees to help. Even legislators who are against the bailout recognize the potentially huge consequences of letting the auto industry fail, not least of which is a big jump in unemployment. This might just be enough to tip the scales. But a potential bailout might not even get to a vote until early next year.

2) The Treasury or Fed could step in. Despite the President's objections, many are insisting that the Treasury carve out a bailout for the auto industry from the already approved $700 billion bailout intended for the nation's financial institutions instead of forcing Congress to consider in new bailout package specifically for the automakers.

3) No bailout materializes, and the Big 3 go bankrupt and restructure.The CEOs insist that bankruptcy is not an option - that it will just delay ultimate closure - but if the government doesn't approve a bailout, there won’t really be any other way.

GM has 120,000 employees in the U.S. Ford has 80,000. Chrysler has 66,000. And the Center for Automotive Research estimates that for each auto manufacturing position, there are 7.5 jobs in industry-related companies. So the next few weeks mean an awful lot to an awful lot of people. Now even if the CEOs don't convince Congress to pass a bailout, all hope is not lost. The Treasury or Fed could still come through with a bailout, or the companies could go into bankruptcy and reorganize. The only sure thing here is that no matter how this all plays out, the auto industry in this country is going to change drastically in the months to come.

A majority of Americans polled by CNN/Opinion Research Corporation started telling us in November 2007 that the economy had become "Issue #1." And from that point on, Americans have known and felt the reality of one of the biggest economic downturns in our lifetimes, fueled by job losses, inflation and falling home prices. It turns out Americans had it right. On Monday, the National Bureau of Economic Research confirmed that the U.S. has been in a recession since at least December 2007.

The NBER is a group of leading economists whose job it is to determine the start and end dates of economic downturns. So while you and I may have had a feeling, only the NBER can officially say, "We are now in a recession."

Let's consider some of the questions you might be asking regarding this announcement.

1) What took the NBER so long? The NBER has to, out of necessity, wait a while to declare a recession in order to process certain economic data. This recession dates back to last December because that's when employers started cutting jobs. In the last ten months alone, 1.2 million jobs have been cut. The NBER also looks at personal spending, gross domestic product, wholesale and retail sales, and industrial production to help make a determination.

2) How long is this recession going to last? There is no way to determine how long this downturn could last, but we can look to past recessions for some guidance. Since this recession stretches all the way back to last December, we are right now in the 12th month. There have been 11 recessions in U.S. history, and only two have lasted longer than 12 months (November 1973 to March 1975, and July 1981 to November 1982). In fact, the average length of a U.S. recession is 8 to 10 months, and the average global recession lasts 16 to 18 months. Unfortunately, this current one is indeed global, which means we're probably not out of the woods yet.

3) Now that it's official, does that change anything? The short answer is, "No, not really." There won't be as much hyped up news coverage on whether Alan Greenspan is calling it a recession or not. Other than that, you're not going to see the approach to fixing the economy change drastically. The U.S. government will continue to try to free up credit and work to stabilize the country's housing and banking industries - all key elements that could help end the downturn eventually.

Some economists speculate that our economy will reach its bottom, at earliest, in the second quarter of 2009. That would still make this the longest recession since the Great Depression. The government has certainly mobilized to address the current economic troubles, passing financial bailouts and economic stimulus packages. But, as with most economic problems, the real fix is time. Lakshman Achuthan, the managing director of the Economic Cycle Research Institute, speaking to CNNMoney.com, put it this way, "All the hand waving and real cash that policymakers are throwing at the problem won't change the fact we're stuck in this nasty recession. The ultimate cure of a recession is letting it run its course."

Remember, patience is a virtue.

While most of us are languishing at work this week, thoughts of mashed potato and cranberry sauce dancing in our heads, the government has been tirelessly cooking up new plans to disperse bailout money. The Treasury and the Federal Reserve are especially keen on greasing the wheels of the credit market, where we are just starting to see banks recommence lending.

Let's take a look as some of the latest initiatives.

1) On Tuesday, the government announced it will buy $500 billion worth of mortgage-backed securities from the government-sponsored mortgage finance firms Fannie Mae and Freddie Mac. This action is aimed at freeing up credit for the purchase of houses, thus supporting the struggling housing market.

2) Also on Tuesday, the Federal Reserve Bank of New York said it will lend $200 billion to holders of securities that are backed by consumer debt. This move should free up credit and therefore promote lending to individuals in the form of auto loans, student loans, and credit card loans.

3) On Sunday, the government agreed to guarantee more than $300 billion of Citigroup's troubled assets and invest a fresh $20 billion in the bank. This is another case of the government coming to rescue of a financial giant considered "too big to fail." The collapse of Citi, which has over 200 million customers worldwide, would have shaken an economy already in the lurch.

It's important to note that these moves are interconnected: all are geared towards moving the economy to a more stable place. If banks become more comfortable lending and investors' confidence in major financial institutions is restored, then consumers will have more money to spend. That, in turn, means that businesses can create jobs.

Of course, these are long-term goals; right now any financial security we find is tenuous. So as you lay in your tryptophan-induced stupor this Thursday, remember: we're going to need to wait a long time before we can assess the real effectiveness of the government's most recent actions.

Gobble, gobble.

Congressional leaders again grilled the CEOs of General Motors, Chrysler, and Ford on Wednesday about a potential $25 billion bailout, and, at the end of the day, the automakers' prospects were grim. Alabama Congressman Spencer Bachus, the ranking Republican on the House Financial Services Committee, fiercely criticized the bailout, noting that autoworkers earn more than the majority of his constituents.

The committee chairman Democrat Barney Frank - who supports the bailout - urged his peers to consider the wider implications for the American economy should the Big Three go bankrupt.

All the hullabaloo resulted in Senate Majority Leader Harry Reid calling off a scheduled vote on the bailout. That means that right now automakers are left in the lurch, especially General Motors, which reported in early November that it would likely run out of cash by the end of this year or early next year, squeezed tight by the credit crunch and poor sales. On Tuesday, Chrysler CEO Robert Nardelli told the Senate Banking Committee that his company faced a similar fate.

Let's take a look at some of the consequences we might see should the Big Three indeed be heading the way of the dodo.

1) CEOs say bankruptcy is not a viable option. The heads of GM, Ford, and Chrysler all said they had looked into filing for bankruptcy, but that the move would likely lead to closure, as research shows customers are unwilling to buy from bankrupt automakers and suppliers would start demanding cash for parts.

2) Should the Big 3 close, consumers would likely feel the pinch. If the supply of U.S. vehicles drops off suddenly, that will probably force car and truck prices up. The failure of the Big 3 would also result in the closings of many related businesses, making finding replacement parts for American and Asian cars more difficult.

3) Foreign auto manufacturers may expand their production in America. On the New York Times' Web site Thursday, Catherine Rampell astutely points out that the failure of the Big Three could provide a great opportunity for foreign car makers. Manufacturing vehicles in the U.S. would cut down on transportation costs, and foreign companies would find a trained workforce ready to be hired.

On Thursday, the United Auto Workers union again urged Congress to come to some loan agreement before its adjournment on Friday and, in return Senator Harry Reid requested the Big Three submit plans to detail how exactly they will spend $25 billion. Only time will tell how this will play out, so buckle your seatbelts kids.

The auto industry has been hit hard by the current economic downturn and credit crunch, and oil prices' meteoric rise to over $4 a gallon this past summer scared consumers silly. Now Detroit's Big Three - General Motors, Ford, and Chrysler - are looking for assistance from Washington to the tune of $25 billion, and the Congress is split.

Let's take a look at the two competing plans to bailout the automakers that are kicking around Congress.

1) Democrats are in support of propping up the automakers by reallocating $25 billion from the already approved $700 billion Wall Street bailout. This would give the government a stake in the companies and allow for strict government oversight of how the companies restructure in the coming months.

2) Republicans are reticent to draw from the $700 billion bailout intended for the financial sector. Instead, many are either suggesting that a good bankruptcy will teach those rascally automakers to run their businesses better, or insisting that the funds come from a $25 billion loan program that was already approved by Congress 2 months ago to help automakers make more fuel-efficient vehicles.

Whether you think the Big Three deserve to be bailed out by the government or not, it is undeniable that the failure of these companies wouldn’t create just ripples in the economy: it would create gigantic waves. GM alone has 120,000 employees in the U.S.; Ford has 80,000, and Chrysler has 66,000. And the Center for Automotive Research (cutely acronymed CAR) estimates that for each auto manufacturing position there are 7.5 jobs in industry-related companies. So not only will the car-maker fail, so will the company that assembles its car radios, and the company that makes the volume knob. One domino falls and they all start toppling.

CAR estimates that if the Big Three completely ceased operations, almost 3 million jobs would be lost in the first year alone. Now that's an extreme case but should give you some sense of what's at stake should the automakers crash.