From one of my favorite sites, Naked Capitalism – now linked on the right – a warning that not only is the commercial paper market a mess, but letters of credit from one bank to another on behalf of leading customers are no longer being honored!
This is beyond astounding. It is cataclysmic.
If this is true and spreads it means the global economy will come to a screeching halt.
My friends, as someone likes to say, the anarchic organization of our global economy is now fast approaching a real state of anarchy.
Only massive coordinated government intervention can stop this.
Mark my words: the days of 9/11 are over, the era of global financial crisis is upon us.
Obama and McCain need to address this issue jointly with the President and the Congressional leadership.
At a minimum, Congress needs to come back into session.
An emergency government may need to be established to manage the crisis through to the election, if the election can, in fact, still be held.
This is too large a crisis to be handled by Paulson and Bernanke alone and in a democracy they should not be allowed to manage this situation without the “powerful disinfectant of sunshine” as Louis Brandeis once put it. It was the lack of transparency that got us into this mess in the first place.
There is no time to lose.