One could well argue that there is strong reason for calm conditions to return to financial markets as regulators work in concert with major players in the financial system to stabilize conditions following a highly tumultuous week. Certainly the magnitude of the efforts and the speed with which they have been applied has been impressive even if several of them introduce longer-run moral hazard problems and adverse incentives. Full deposit guarantees at strained US banks, a new Federal Reserve facility to help against deposit flight and forced liquidation of impaired securities portfolios, improved margin ... (full story)