Nice to see that oil is back to $86 a barrel, and falling... trouble is it took a global stock market crash to accomplish it. This morning the British Chancellor, Alistair Darling, announced that £50 billion would be made available to banks who want some of it to help assist in the flow of money. That is of course exactly what money is - currency. In a spirit of distrust over viability of individual banks, it is individual banks who are hanging-on to their money, refusing to lend it to other banks or more generally in loans to small businesses, which will slow down the economy further.
Written-into this red-cross package are apparently guarantees and regulations to prevent rogue financiers from screwing the system again for their own gain, and bringing it to its knees at some later date, needing yet another food-parcel drop. If the British tax-payer has to bail a bank out, he or she should not be expected to pay millions in bonuses to the chairman.
It is nothing less than the national economy, and ultimately the world economy that is at stake. All investors and anyone with money in a bank account somewhere, waited with bated breath for this morning's announcement, promised last night. It is an incredibly complex issue, such is the intermingled and interconnected nature of global finance. James Kunstler's latest podcast (link given in Karen Blakeman's comment bleow) is pretty blunt, and he accuses the financial sector of all kinds of chicanery and dodgy packaging, repackaging and selling-on of financial packages with names and neat acronyms that belie what is really going on. Where in reality is our money, and maybe it doesn't exist at all, beyond pixels on a computer somewhere?
I for one will never invest money in the stockmarket again. It is difficult to avoid putting money in banks short of keeping it under the bed, and the "cashless economy" concept periodically rears its head - although I doubt it will again in any sincerity. We have been encouraged to believe in a new god - credit - and it may be that only the real God can get us out of this mess.