Yea.
The spreads indicate just how bad the environment is right now.
The Fed is effectively no longer “the lender of last resort.”
They’re now the only lender in town.
Will WaMu find a buyer? They appear to be next, otherwise. I'm not so sure that they're "too big to fail."
I heard today on Tom Sullivan the FDIC has already fallen below the minimum percentage of cash it is required to keep on hand. They are already going to have to borrow from the Treasury Dept. Besides WAMU there are about 80 more banks that are in trouble. How much cash can Treasury lend? They don’t have enough, and would have to sell bonds (borrow). Yikes!
The govt has assumed a lot of debt. How are they going to pay it off? They can raise taxes, inflate the currency or cut spending (such as Iraq and AFG). With Obama they get all 3.