Finis

From the WSJ:

"This has been the worst financial crisis since the Great Depression. There is no question about it," said Mark Gertler, a New York University economist who worked with fellow academic Ben Bernanke, now the Federal Reserve chairman, to explain how financial turmoil can infect the overall economy. "But at the same time we have the policy mechanisms in place fighting it, which is something we didn't have during the Great Depression."

and also

The Federal Reserve and other central banks including the European Central Bank, Bank of England, Swiss National Bank and Bank of Japan announced coordinated action to ease the credit crunch by boosting short-term liquidity. The Fed expanded dollar swap arrangements with other central banks by $180 billion.

The CB announcement came out six minutes before an economist from a Swiss bank call for precisely that action.

+ Capitalism does not work without a functioning banking system. A functioning banking system requires banks to trust one another and markets to operate smoothly. We have disorderly markets and systemic failure at the moment.
+ Systemic failure needs a system wide solution. Bailing out institutions one at a time will not stabilise the current environment. The good news is we are now approaching the END GAME. The crisis will continue until governments act. The situation is rapidly becoming so serious as to force governments to act.
+ The end game will require liquidity from central banks and fiscal commitments from governments. Liquidity injections are not inflationary, because there is no excess money supply - injections are meeting excess demands. Governments have the ability to expand their balance sheets to deal with the crisis.
+ Fundamentals do not matter for now. In disorderly markets economics and economists are ignored (which is why bad things happen). Things will only stop being bad when economists are listened to and we get a systemic bail out for the systemic problem.