Defaulting banks - where will it stop?

[Jan Klimkowski]

S&P and the Dow have both crashed down over 7% today.

Meanwhile, the Daily Telegraph's roving Business Correspondent, spooky Ambrose Evans-Pritchard (yes the same AE-P who relentlessly pursued Clintonian "conspiracies" during Bill's Presidency), has totally lost it:

My view is that Washington has done what is needed to prevent the collapse of the US economy. It has taken over the entire credit system, after all, surpassing Roosevelt's New Deal.

The US has guaranteed the $3.5 trillion money market funds. It has nationalised the $5.3 trillion pillars of the mortgage market, Fannie and Freddie. The Fed is accepting any junk as collateral at its lending window. This week it went the whole hog after panic hit the $1.6 trillion market for commercial paper. It is now offering loans without any security at all. The US government has become a bank. Yes, this is US socialism. What is the alternative?

http://www.telegraph.co.uk/finance/comme...-euro.html

AE-P often appears to articulate the views of certain parts of the British establishment. So, this faction is now happy for the Fed to accept "any junk as collateral", and to offer loans "without any security at all"?!?!?