Monday :: Sep 15, 2008

Open Thread

by Mary

A new kind of bank run:

And as the unknown unknowns have turned into known unknowns, the system has been experiencing postmodern bank runs. These don’t look like the old-fashioned version: with few exceptions, we’re not talking about mobs of distraught depositors pounding on closed bank doors. Instead, we’re talking about frantic phone calls and mouse clicks, as financial players pull credit lines and try to unwind counterparty risk. But the economic effects — a freezing up of credit, a downward spiral in asset values — are the same as those of the great bank runs of the 1930s.

But as Hilzoy noted, Donald Luskin, advisor to the McCain campaign, has figured out who is to blame: Obama. It would be funny, if things didn't look so scary.

What's your take? And use this as an open thread.

Mary :: 12:00 AM :: Comments (25) :: Digg It!