Three sources on the risks to the US Economy

Read these three:

Martin Wolf - Why the credit squeeze is a turning point for the world

Paul Krugman - After the Money is Gone

Nouriel Roubini - Coordinated Central Banks Liquidity Injections: Too Little Too Late To Address the Fundamental Problems of the Financial System

I don't think people really get how serious the problems are. The recent decision by the Fed to make available $40 billion is amazing. When Brazil still had its hard peg currency system, it pointed to reserves of $41 billion as their insurance that they would weather a crisis. That wasn't enough.

Part of me blames what can only be seen as a desperate attempt to shore up the system on politics. If a recession hits, there is no saving the Republican party in the coming elections. I would bet that whips are being cracked in Washington, but I agree with Roubini that this will get a lot worse.