1. The U.S. credit engine is already melting down. In fact, just this week, the all-important market for short-term commercial paper has come to a virtual standstill. This is precisely the market we warned you about. Now it's collapsing. And if this pattern continues, it's likely to drive many corporations that depend on this instant cash into instant bankruptcy.
2. Although a massive federal bailout might help rally the stock market temporarily, it is not — and will not — reverse the credit meltdown.
3. Quite to the contrary, fear is now spreading throughout the banking industry, driving many Americans to pull their money out of the financial system entirely. Yes, it makes sense to shift from weak to strong institutions, and that's rational. But the behavior we're beginning to witness is both irrational and dangerous.
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