Voltaire, Batman and the precipice

Because some men aren’t looking for anything logical, like money. They can’t be bought, bullied, reasoned or negotiated with. Some men just want to watch the world burn.

— Dark Knight (2008)

Take your third deep breath in ten days. Because we stand at a precipice in U.S. markets. Congress is playing political brinkmanship with the biggest financial decision of our generation. We just had the largest bank failure in U.S. history. Credit spreads have widened to the point of gibbering meaninglessness. And some people are still nattering about what might be the perfect variant of the Paulson bailout plan.

This is from Paul Kedrosky of Infectious Greed; investor, blogger, and way active on Twitter. I don’t entirely agree with him (yes, we need to do something, but it needs to be the right thing and not rushed) but you need to read the whole thing. It’s easily the most impassioned thing he’s written, and he’s an intelligent, straight-up, non-ideologue type of guy.

On the WaMu collapse. There had been a run on the bank since Sep. 15 and the death blow was when their debt was downgraded to junk a few days ago. FDIC seized them today and JPMorgan bought them from FDIC. All deposits are safe, no FDIC money was used.

His comment on credit spreads is important. When they go off the charts, stock market turmoil will follow.

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