The Collapse: Germany Falls, Then the World?

Mike V. and Chris at Mindful Musings both point to this article from the UK Telegraph:

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Investors will learn today whether the Paulson bail-out - fattened to $850bn (£480bn) by Congress - can begin to halt the death spiral in the credit system. So far, the response looks terrible.

Germany is now in the hot seat. The collapse of a rescue deal for Hypo Real Estate on Saturday threatens a €400bn (£311bn) bankruptcy that nearly matches the Lehman Brothers debacle for sheer scale.

Chancellor Angela Merkel has been forced to pull her head out of the sand, guaranteeing all German savings, a day after she rebuked Ireland for doing much the same thing. Reality intrudes.

During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. The Netherlands has just rushed through a second, more sweeping nationalisation of Fortis. Ireland and Greece have had to rescue all their banks. Iceland is facing an Argentine denouement...
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Read the rest, and note that as of 1040 pm edst, the Nikkei index in Japan is down 3.1%, the Shanghai index in the PRC is down another 2.28%, and European market futures are trending sharply lower.

Hey - but at least Obama's poll numbers are up!