A Genuine Financial Crisis

This has been a bizarre, yet fascinating week. We have seen (so far):

-a genuine run on a bank...Worried about the stability of mortgage giant Countrywide Financial, depositors crowd branches.

Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.
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At Countrywide Bank offices, in a scene rare since the U.S. savings-and-loan crisis ended in the early '90s, so many people showed up to take out some or all of their money that in some cases they had to leave their names.

-a liquidity crisis in short term money markets that prompted central banks around the world to take emergency action... ECB Injects €94.8 Billion To Ease Jittery Markets... Bank of Canada Says It Will `Provide Liquidity' to Aid Markets...Fed Enters Market To Tamp Down Rate...

-whipsaw volatility in global stock markets resulting primarily in major declines...

-mortgage lenders going bankrupt...Aegis Mortgage files for Chapter 11 bankruptcy...

"Aegis has described itself as one of the 30 largest U.S. mortgage lenders. It made "prime" and "Alt-A" wholesale loans, and "subprime" retail and wholesale loans to residential borrowers who couldn't qualify for the best rates.

In court papers, Aegis listed more than $100 million of assets, and estimated it owes more than $600 million to creditors. The latter included $178 million of unsecured debt owed to Madeleine LLC, a Cerberus affiliate that has an 80.9 percent equity stake, the papers show"...

-exchange rates move radically...the yen has strengthened quite a bit against the dollar...this suggests that many investors are exiting the "carry trade"...