The first key point here is that there are massive and varied financial institutions which behave pretty much like banks do but aren't under the regulatory thumb that banks are, and now the Fed has given them access to the cookie jar without bringing them under the regulatory framework.
The second key point is that it seems that there's still a failure to understand just what a pile of shit Big Shitpile actually is. Steve Forbes was on my teevee this morning saying that we just need to get rid of mark to market accounting, as that was scaring people due to the writedowns. Essentially he was arguing that Big Shitpile wasn't as bad as people thought, but panic has made the assets illiquid.
Unsurprisingly, he's wrong.
