There is a high fear factor in the credit markets now, the way I see it (strictly lay observation.) No one wants to lend money at all, because all proper risk assessment has gone right out the window! The LIBOR low-risk short-term loans that are the "lube" of the economy aren't being made, so the economy is "stuck". Money exists; it's just not moving. Closest model: Japan in the 1990s. (Thanks, Robert Krulwich for making this simple enough for a scientist to understand!)

Is the "fear factor" justified, or part of a self-fulfilling prophecy? Just an example, in June we KNEW that oil was going to $150 a barrel....and it did, almost. But, then it came down, because it was apparently unsustainable.

Now the government, led by W, "KNOWS" that we'll enter the next Great Depression if they don't "bail" us out (I think that's a lousy term, btw).

Just FWIW, W "KNEW" there were WMDs in Iraq...interpret that as you will.