Regulation

Interesting... we may have witnessed quite a turning point in the policy environment with the somber events of this past weekend.

Bear Stearns | Bear’s pits | Economist.com: "The Fed’s decision to introduce loans to brokers as well as regulated banks marks a significant shift in policy, and raises the question of whether the former should now be subject to more stringent regulation in return. But the Fed’s widening role is a sign of its fears that other pins might fall. Merrill Lynch looks decidedly wobbly. Lehman has lots of toxic mortgage securities on its books. Lehman's shares plunged on Monday morning but it is not the only one facing trouble. All the other big investment banks will be under intense funding pressure in the coming days. And when trading partners start to pull away, a rapid chain reaction can begin. In effect, with Bear Stearns being sold for such a low price, including its valuable office property, the price of the securities portfolio is zero."