Chaos is inevitable now is it? Only if the situation is mishandled ... Ummm, maybe "inevitable" is right, after all!

I agree that $700 bn isn't enough to solve the problem. It isn't enough even to solve USA's problem. Who knows how much is needed?

I may have a very simplistic understanding of what's going on - in fact, I'm sure I do - but so far as I understand it, we are facing a situation where virtually every banking institution in the world has become tainted by "toxic" investments and now does not know the true value of its balance sheet. They have to fund these investments by borrowing from other banks, and, of course, no bank will lend to any other company which cannot show what its true value is. Central banks are providing funds as lenders of last resort for fear of the consequences otherwise.

The first thing to do is to face the problem. This isn't global warming. We don't have years and decades to argue about whether it's really happening or not. But a flood of major bankruptcies within the financial system would be as devastating to the economy as a flood from melted icecaps would be to coastal populations

It seems to me that the most expedient course of action would be for all governments together to take control of the banks' activities (I don't mean to take them over or to nationalise them, simply take temporary powers to force banks to do as the governments tell them). Then the banks would be made to lend to each other on an equitable basis until all liquidity problems are sorted out, and meanwhile, the value of the mortgages they hold should be realistically assessed, and the banks made to write down the values of their portfolios accordingly. Any capital readjustments necessary to meet prudential requirements should then be made, or banks failing to meet their capital adequacy requirements should be merged into each other or wound up.

Finally a repayment plan for returning the subsidies that have been forced out of us should be worked out and agreed, even if this means the State becomes a shareholder.

Once the mess has been sorted out, the governments could (if they wished) relinquish their temporary powers.