'Tinker Bell Market' Fallout Wallops Taxpayers

Although he doesn't foresee long-term catastrophe, Allan Sloan of Fortune sounds an alarm in today's Washington Post, saying he's "more nervous about the world financial system now than I've ever been in my 40 years of covering business and markets." He dissects "the collapse of a Tinker Bell financial market, one that depended heavily on borrowed money that has now vanished like pixie dust."

Sloan analyzes the roots of the current situation, explains how it's similar to and different from 1929, predicts the downfall of the American dollar, and suggests that Bear Stearns debt-holders "erect a statue to Bernanke." In the end, "all this money being thrown at the debt markets will stabilize things," Sloan argues. "But the costs will be steep." (More housing crisis stories.)