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The radical approach: why we're not yet out of the woods.

Article Excerpt
The rich world's financial system is headed towards meltdown. Stock markets have been falling most days, money markets and credit markets have shut down as their interest-rate spreads skyrocket, and it is still too early to tell whether the raft of measures adopted by the United States and Europe will stem the bleeding on a sustained basis.

A generalized run on the banking system has been a source of fear for the first time in seven decades, while the shadow banking system--broker-dealers, non-bank mortgage lenders, structured investment vehicles and conduits, hedge funds, money market funds, and private equity firms--are at risk of a run on their short-term liabilities.

On the real economic side, all the advanced economies--representing 55 percent of global GDP--entered a recession even before the massive financial shocks that started in late summer. So we now have recession, a severe...

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