Big Freeze part 4: A US recovery

This is the article Paul Kedrosky commented on. I think it is one of the more intelligent ones, and I mostly agree with everything. It kind of puts the current situation in perspective, which is dire, but it also talks about a few solutions with should or should not be done.

http://www.ft.com/cms/s/0/794801a8-63e8-11dd-844f-0000779fd18c.html

...To date the focus of public policy has been on the extension of credit to banks and other financial institutions by the Federal Reserve so as to ensure their liquidity. This strategy is appropriate but may be reaching its limits. Where the problems a financial institution faces are of confidence or liquidity, lending can be highly efficacious. When the problems are of underlying solvency and the constraint on lending is a lack of capital, lending is not an availing strategy. It is necessary, at least on a contingency basis, to plan policy responses to such problems....

...Today, the end of the current financial crisis looks further away than it did in August 2007. Policy is not yet ahead of the curve. I used to remark in the context of the emerging market crises of the 1990s that I would date the moment of recovery from the first time an official pronouncement proved to be too pessimistic. By this standard, recovery is not at hand....