“Strong” (OR How can you vote for this guy?)

In case you missed the headlines today:

In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

Robert Reich:

Ironically, a free-market-loving Republican administration is presiding over the most ambitious intrusion of government into the market in almost anyone’s memory. But to what end? Bailouts, subsidies, and government insurance won’t help Wall Street because the Street’s fundamental problem isn’t lack of capital. It’s lack of trust.

The sub-prime mortgage mess triggered it, but the problem lies much deeper. Financial markets trade in promises — that assets have a certain value, that numbers on a balance sheet are accurate, that a loan carries a limited risk. If investors stop trusting the promises, Wall Street can’t function.

Paul Krugman:

The stock market isn’t doing as badly as one might have feared — although it’s just broken below Dow 11,000 as I write. But Felix Salmon suggests that we look at my old standby, the TED spread, shown above — and it’s looking kinda spiky. All in all, way too soon to conclude that we won this game of Russian roulette.

Holy um, stuff! I go out to get a cup of tea and suddenly it’s Black Monday.

Sen. John McCain:

I think still — the fundamentals of our economy are strong.

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