We Indians are all natural smart Techie gurus, of course.

We come to America to take all high tech jobs at 1/3 wages

We sell our hut in Bombay for one thousand ruppe, and trade one ruppe for one yankee dollar, before US dollar sunk even further

We buy foreclosed American house for one thousand dollars.

Say thank you all to India

We hired unemployeed American to clean house and yard work.

Say thank you all again to India

World economic problems solved.

I'm in Australia, and it's true that this spreads like a contagion. Our money markets go crazy every time there is even a rumour that Europe and the US are going through tough times.

We're a small economy in comparison and we get hammered every time!

The problem with El-Erian's ideas is that they require a source of money from ... from where? Give more money to the banks to shore up their capital reserves. Spend more to stimulate the economy. Where does that money come from? The banks and the sovereign governments have no money left. So where, again, does the money come from? The private sector? Does the private sector look like it's about to fill that need? And isn't the point of this article that we should have a coordinated public-sector response?

El-Erian does have two decent broad recommendations, to narrow the eurozone integration level and to reform state economies. But those are (a) easy to say, very hard to do; and (b) likely to have extremely limited effect, particularly in the short run. They are in no way crisis containment vehicles.

The only conceivable source of funding the expenditures he is talking about is for central banks to just print money. That may be what the US does. But Europe can't do it, unless the monetary unity is ended among the EU members. I think El-Erian hints at that, but he knows it is catastrophic, so he doesn't say so overtly.

Ultimately, these are pie-in-the-sky recommendations, and the fact that they are being made in serious form is a grim reminder that central economic authorities have simply run out of viable options. The economy is beyond rational control -- that's the simple truth, ugly as it may be.

Let's face facts. The bank bailout was unprecedented in industrial times. The notion that taxpayers should recapitalize banks which have acted recklessly, encouraging moral hazard, flew through the industrialized nations like a wildfire and larded up national debts overnight. Without strings! Why?

Because these same banks are such aggressive contributors to political campaigns, that's why. Letting them fail, or even requiring serious reforms, was unthinkable; it would interrupt the gravy train.

American citizens overwhelmingly disapproved. It did not stop the bailout.

We have a legal mechanism to follow when a private banking institution fails: seize the bank, fire the managers, unwind bad investments, require investors to take a bath, stand up one or more smaller, solvent banks. We didn't follow it. We didn't even *talk* about following it. Why not?

Now the banking crisis has morphed into a national debt crisis, which has in turn morphed back into a banking crisis, and we still aren't permitted to discuss real solutions.

Investment banking (gambling) and commercial banking (where your deposits are managed) and brokerage operations can not be co-mingled without moral hazard. Yet we can't even *talk* about reinstating Glass-Steagall. It never even shows up in mainstream commentary like this article. Why not?

Collateralized debt obligations (CDOs) are insurance: if my investment fails, the insurer pays. There are laws on the books about how to run an insurance business, complete with capitalization and reserves rules. Yet we let CDOs avoid these rules - still! After bailing out AIG to the tune of hundreds of billions of dollars of taxpayer money, we're still not requiring CDOs to be treated legally as insurance. Capitalization and reserves rules still aren't applied. Why not? And why don't we hear mainstream media talking about this?

You know what's shaking apart the world's financial infrastructure? I'll tell you. It's the disintegration of trust. Nobody can trust anyone, because the system has become completely corrupted to preserve the wealth and privileges of the few at the top. There's no honesty, there's no transparency. Now it's not just banks that are lurching along deep in the red. It's nations!

Mainstream media is losing trust, too, because it refuses to speak honestly about what went wrong. Where are the calls for criminal prosecution of bank managers who bundled subprime junk mortages as AAA securities? That's fraud, folks! But you have to go to Rolling Stone or other fringe outlets to hear the word spoken. Mainstream media won't bring that up.

Be ashamed, Slate and Washington Post Company. You are part of a very big problem, and your refusal to come to grips with reality is helping to drive us down into the dirt.

Financial institutions need to be pressured to recapitalize and come to terms promptly with their worsening asset quality. And the rest of the world must definitely help by offering specific capital injections and, in the case of some developed and emerging economies, more expansionary schemes rather than stoicism for the sake of stoicism.

The only conceivable source of funding the expenditures he is talking about is for central banks to just print money. seslichat That may be what the US does. But Europe can't do it, unless the monetary unity is ended among the EU members. I think El-Erian hints at that, but he knows it is catastrophic, so he doesn't say so overtly.