Now that House Republicans have thrown the Paulson bailout plan into total disarray, and Washington Mutual marks the largest bank failure in US History, and global credit markets are basically offline -- should we brace for Great Depression 2.0?
While I can't say 'no' with any authority, I tend to think not. Certainly bank failures and the mother of all credit crunches does no good for the economy. And by economy I mean both Wall Street and Main Street. But just because this particular $700bn (really estimated to be more on the order of closer to $2,000bn all told) bailout of primarily Wall Street investment bankers and their compatriots has stalled does't automatically spell the end of capital markets as we know them.