They never wanted to play, and nor did they ever think they'd have to. Against their will, America's economic policymakers have become engaged in a terrifying game of Russian roulette. The US financial system is in danger of melting down. This may not be the most probable outcome. Equally, though, a bullet through the head is not the most likely ending to a game of Russian roulette. Unless you're mad, though, it's not a game you'd volunteer to play.
Friday's bail-out of Bear Stearns, the US investment bank, brought to a close a remarkably frenetic week in financial markets. Bear Stearns' president and chief executive, Alan Schwartz, said on Thursday "our balance sheet has not weakened at all. We don't see any pressure on our liquidity". A day, it seems, is a long time in financial markets.
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