naked capitalism: Roubini: Fed Fiddles While Rome Burns

Whatever money you may need for the next five years, please take it out of the stock market right now, this week by Cramer

naked capitalism: Roubini: Fed Fiddles While Rome Burns:
..One spur for the depth of the move was normally relentless bull Jim Cramer's advice pre-opening, on the Today Show, that, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week." The yen has rallied nearly 4% in a mere week, another sign of an accelerated retreat from risk. Brent crude is below $85 and gold has rise $36 per ounce so far today. (Update: reader Dwight pinged that the stock market staged a monster recovery immediately before the close, from a low of just over 9500 to 10,000. What gives? The trigger may have been the request by France for an emergency G8 meeting, but no one has even agreed!]

Nouriel Roubini has weighed in even more forcefully on these issues in "The Fed keeps on wasting time while the mother of all bank runs is underway" (hat tip reader Dwight).

Last Friday I pointed out in my “Financial and Corporate System is in Cardiac Arrest: The Risk of the Mother of All Bank Runs” that we were at the point of a risk of a systemic financial meltdown with the beginning of the mother of all bank runs: stock markets gave a vote of no confidence to the Senate passage of the TARP legislation (equities down 4% on Thursday) and to the House passage of the legislation on Friday (equities down 3% after the passage of the bill in the House). At the same time last week money markets, interbank markets, credit markets were all imploding with all interbank spread at new all time highs, credit spreads going up through the roof and the roll-off of the financing – via commercial paper – of the corporate system. As I put it last week we were facing:

- a silent run on the huge mass of uninsured deposits of the banking system and even a run on some insured deposits are small depositors are scared;

"meltdown driven by a liquidity run on their short term liabilities. So it is time for the Fed to stop wasting time and start the actions that will make a difference. We are now at risk of a systemic financial meltdown of the financial system and the corporate sector too."