Watch That Edge, Now ...

Anybody else have that edge-of-the-cliff feeling?

BBC business editor Robert Peston said Bear Stearns had been taken to the brink of insolvency over the past 24 hours by a sudden collapse in confidence on the part of its hedge fund clients.

As a result, these funds rushed to withdraw their assets.

"The rescue of Bear Stearns demonstrates that the worst of the global credit crunch is not yet behind us," he said.

He says that if Bear Stearns had been allowed to collapse, it could have put the whole financial system at risk.

Paul Craig Roberts is feeling it:

Today the US, heavily dependent on imports, is subject to double-barrel inflation from both domestic money creation and decline in the dollar’s foreign exchange value.

The US inflation rate is about twice as high as the government’s inflation measures report. In order to hold down Social Security payments, the government changed the way it measures inflation. In the old measure, inflation measured the nominal cost of a defined standard of living. If the price of steak rose, up went the inflation rate. Today if the price of steak rises, the government assumes that people switch to hamburger. Inflation doesn’t go up. Instead, the standard of living it measures goes down.

The Primate-in-Chief, on the other hand, says everything's just fine:

President George W. Bush, seeking to bolster faith in the economy amid fears of a recession, acknowledged on Friday the United States was going through hard times but said growth would resume over the long run because economic fundamentals were sound.

Democratic presidential candidate Hillary Clinton countered that much of the country was already in a recession.

With oil prices at record highs, the mortgage market on the verge of meltdown and the specter of recession looming, Bush has been scrambling to halt the slide in the economy.

"In the long run I am confident that our economy will continue to grow because the foundation is solid," Bush told about 500 people at the nonpartisan Economic Club of New York, a group of top business executives, bankers and economists.

I wonder: what is this solid foundation to which El Supremo refers? The amazing productivity of the American mercenary soldier? The production of Super Bowl advertising? The explosive proliferation penis-stiffening prescription drugs? The vigorous rate of construction of two-thirds-vacant suburban strip malls? Yes, yes, a solid foundation indeed.

We now return you to our nonstop coverage of the exchange of pleasantries between Geraldine Ferraro and the Rev. Jeremiah Wright.