Princeton Economist Krugman: Bailout 2.0 by this weekend or else:
“… it will be very alarming if this weekend rolls by without a credible announcement of a new financial rescue plan, involving not just the United States but all the major players.…the only things anyone wants to buy right now are Treasury bills and bottled water… You may think that things can’t get any worse — but they can, and if nothing is done in the next few days, they will.“
NYU Economics Prof Nouriel Roubini presents a grim assessment on his blog tonight:
“The US and advanced economies’ financial system is now headed towards a near-term systemic financial meltdown .. [this] crisis was caused by the largest leveraged asset bubble and credit bubble in the history of humanity..”
Even with aggressive coordination we could see near-term bank or market closures and otherwise fitful times. I reiterate my advice that you each seriously consider a personal or family contingency plan for a potential four-alarm banking emergency. This may seem unlikely – but it’s no longer out of bounds in pleasant conversation. We discussed this very delicate issue in a bit more length here, and I’m hoping to write a little more about it in the next couple of days.
Sorry it’s been a little bleak around here lately.