The continuing AIG bailouts, as one example, have been a channel to bank-like entities and banks overseas. I see some trillion dollar shoes left to drop.

Of course, this is just my hypothesis, so I'm interested in hearing contrary evidence.

I also don't claim that the banking system is perfect and in great shape, just that any problems it has are far less responsible for our current situation than a big change in asset values.

This latest wingnut talking point that he's “doing too much” is childish and ineffective.

Get on the bus!

This is still a credit crisis, and is still leading to broad deleveraging. If it is not a “banking” crisis it is only because governments have stepped in to prop up the banks, whatever it takes. The rumored $9 trillion in commitments are not just to provide liquidity. A number that big looks like solvency.

… unless we take the IMO shallow view that solvency is only an issue because prices are artificially depressed.

That beiing said, it would be nice if the government tried to to encourage the entrepreneurial activity that will pull us out of the recession instead of discouraging it by (i) constantly changing the rules, and (ii) making currying political favor a key element of success (e.g. by handing out trillions of dollars in various ways).