Stemming the Crimson Tide

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The center can still hold.

But if it doesn't, and a Yeatsian anarchy continues to be loosed upon the financial system, investors should expect some drastic responses from the government.

Stocks have recorded dizzying declines in recent days, but the real problem all along has been the severe correction in the credit markets.

The freeze there has recently morphed into a full-blown panic.

In short, no one wants to lend to banks -- including the banks themselves.

So far, the solutions the government has thrown at the system ...

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