Weeks from Collapse?

Good thing there's a World Bank/IMF meeting this weekend in DC because the Economist has joined with Roubini, warning of total collapse, not just a recession. GM is down 31%. People and the market are not just preparring for recession, but for a possible economic heart attack.

Suspending mark-to-market has created even more distrust between banks as the TED spread goes higher. When no one trusts anyone with their money, not even bank-to-bank, businesses can't get any credit and the market freezes. How Goldman could suggest market lows while liquidity remains unaddressed is bizarre. If the Fed and central banks showing proof they can solve liquidity issues first is a prerequisite to ANY positive market move. Which, in my opinion means, by this time next month, the central banks of the world will be the primary lender (or insurer to the lenders) of virtually all short term credit. The superstructure of banking will be totally centralized regarding liquidity, risk and control. This will be an historic first.

We already lost a few weeks of time because the bank lobby was pushing back against the US government re-capitalizing the banks for equity while all economists screamed it was the only remedy. The good news today, Paulson finally agreed to modify/read TARP terms as cash-for-equity. This delay is the fault of Paulson and the Bank Lobby. No other country in this crisis delayed by avoiding this truth while trying to unload toxic assets on taxpayers for nothing. The banks wanted a free lunch and their greed cost us at least two weeks, which is a load of time at this point. You can't trust the king-banker to regulate or deal with banks. The new president must replace Paulson immediately.