Dark days ahead. Stock up. Here's Harvard's Lawrence Summers, whose assets are clearly in derivatives based on shorting the market: Three months ago it was reasonable to expect that the subprime credit crisis would be a financially significant event but not one that would threaten the overall pattern of economic growth. This is still a possible outcome but no longer the preponderant probability. Even if necessary changes in policy are implemented, the odds now favour a US recession that slows growth significantly on a global basis. Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond.
Others have ideas, too: HSBC Bails Out its SIVs While the big American banks are trying to organize a collective superfund to shore up their shaky off-balance-sheet debt, Europe's biggest bank, HSBC of Britain, is simply taking its troubled children in. The move "prevents the need for a fire sale of the assets" and makes it less likely that HSBC will join the banks' superfund.
Wake up to the dangers of a deepening crisis | 
