The global credit markets have just about shut down. The entire system is seizing, despite the best efforts of the Fed/Treasury. The system is just too big and moves to fast for these relatively small organizations to do anything other than conduct a holding action.
Yves found the money quote from Bernanke (paraphrased from an recent interview):
"We have lost control. We cannot stabilize the dollar. We cannot control commodity prices."
Yves points out what is disturbing about this:
I cannot stress how shocking this statement it is. The Federal Reserve, with a mere $900 billion dollar balance sheet, thought it could control, or even seriously manipulate, the currency and commodities markets? JP Morgan's footings are nearly twice as large. The Fed simply is not a big enough actor to have that sort of impact. The fact that the Fed chair knows so little about market that he ever harbored the delusion that he could control them means he is even less knowledgeable than I feared.
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