Talk about unravelling quickly....World markets crash despite the Fed cutting an additional 25 bps.
Bear Stearns had more exposure than anyone else related to mortgage industry amongst investment banks according to industry insiders so now the leading MBS, investment bank has gone under, a major Private Equity company has been stung (Carlyle Group), there have been approximately $200 billion in write-downs & everyone is yanking credit left and right. \
This is a recipe for stagflation like no tomorrow.
For those that don't know what that is, stagflation "is a macroeconomics term used to describe a period of inflation combined with stagnation (that is, slow economic growth and rising unemployment, possibly including recession). "