Economic equivalent to cardiac arrest

On Wall Street, the panic drove the Dow Jones Industrial Average slipping below the key psychological level of 10,000 for the first time since 2004. The mild euphoria that greeted the passage of the $700 billion bail-out of Wall Street(*) on Friday evaporated as traders digested the more bad news from Europe.

The UK stock market has suffered its worst one-day fall in history as the banking crisis intensified. The FTSE's tumble was mirrored across Europe, as markets in France, Germany, Italy and Spain all recorded heavy falls.

Here's how Nouriel Roubini sees it: "It is now clear that the US financial system - and now even the system of financing of the corporate sector - is now in cardiac arrest and at a risk of a systemic financial meltdown. I don’t use these words lightly...The Commercial paper market is shut down...Corporations have no access to long or short term credit markets. Brokers are increasingly not dealing with each other. The interbank market is seizing up."

(*) BTW, has anyone even attempted to explain how Secretary of the Treasury Henry Paulson expects to recapitalize the banks--which are loaded up with $2.4 trillion in mortgage-related investments—with the relatively paltry $700 billion from the so-called rescue plan?