Bad news going to worse news in the States... after $750 has already been committed, Ben Bernanke says today that even more banking bailouts might be required.
Where does this end?
Whilst the Obama adminstration's $3.5 trn budget (if it can be passed - a specific post on that later in the week) looks pretty good, the bailout just looks like it's throwing bad money after bad now.
Liquidate the duff banks, nationalise the infrastructure and start again. It's the only way.
I'm not going to be so naive as to say that the continuing slides in global stock markets are being caused by the continual extension of the bail-outs, but it probably can't be helping any.
The significant risk of downside for taxpayers in the deals that are being struck by the US government over AIG - and by the UK government over RBS and Lloyds Banking Group - are also contributing to the grim mood and the general feeling that we are plumbing some kind of bottomless pit of public money. Our old friend Paul Krugman points out the problems of the AIG deal here. Meanwhile there's a fairly measured analysis of the RBS deal by Philip Aldrick of the Telegraph here.