The world has been reeling from the aftermath of the sub-prime crisis. The offending banks have been coming very close to insolvency. Banks will not lend to each other. Governments are panicking. The markets are panicking.
The banks have survived. Governments around the world led by the US have bailed out many of the offenders. George W Bush has pushed through a $700 billion rescue package. Other countries have followed. Interest rates have been cut.
But each rescue plan is followed by even greater panic. The sell-off continues. The markets' response reflects the fact that all the measures taken so far have been panic measures. Panic measures do not inspire confidence. If the government is panicking, why should investors feel confident?
Each action seems only to increase market anxiety. Each government move is followed by frenzied selling. There has been talk of depression.
Handouts to business have not impressed or reassured investors. Confidence has not been restored.
What is next on the agenda?
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