It's clear, US in a financial crisis

Bear Stearns, one of the largest global investment banks and securities trading and brokerage firms in the world, marks the moment when the global financial crisis went critical. Up until last Friday, it had been possible - just about - to believe that the worst was over and that things were about to get better.

That pretence was stripped away when JP Morgan, at the behest of the Federal Reserve, stepped in when the hedge funds pulled the plug on the fifth-biggest United States investment bank.

It is now clear that no end is in sight to the turmoil, and the reason for that is the Fed and the US Treasury are no closer to solving the underlying problem than they were eight months ago.