The most stunning graphic of the past few days shows the stock market's reaction to government attempts to rescue the financial system. Between Monday and Wednesday, the Federal Reserve unveiled five initiatives to unfreeze credit, and stocks slumped after each announcement. Meanwhile, in Europe, the story is the same: The series of deposit guarantees, bank rescues, partial bank nationalizations and interest rate cuts has yet to calm investors. To the contrary, market panic and apparent government panic have fed on each other. In Washington, the Treasury went from ad hoc bailouts to demanding $700 billion without saying how it would be spent. In Europe, rival governments tripped over themselves as they rolled out uncoordinated measures.
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