Welcome to Torturous Thursday

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OMG, what if we had been standing there?? Photo: Getty Images

For a while, it seemed as if this financial crisis was merely going to afflict a handful of institutions, but now it's moving into other realms, such as money markets, and things are getting really freaky. The Journal, using a metaphor that is perhaps a shade too lengthy and graphic, likens what is happening to a spreading disease:

The U.S. financial system resembles a patient in intensive care. The body is trying to fight off a disease that is spreading, and as it does so, the body convulses, settles for a time and then convulses again. The illness seems to be overwhelming the self-healing tendencies of markets. The doctors in charge are resorting to ever-more invasive treatment, and are now experimenting with remedies that have never before been applied.



Great. After the jump, a quick look at what happened while you were sleeping:

All the major central banks banded together to flood the market with money, which like menthol products feels good but may not ultimately be healing: "Today's coordinated intervention shows that the [central banks] are acting to address market liquidity failure — this is itself reassuring," Laurence Mutkin, head of European interest-rate strategy at Morgan Stanley in London, wrote in a research note. But, he added, "the intervention does not directly address the key problem … banks' desire to hoard cash and their reluctance to lend to each other."

• In particular, the Federal Reserve authorized a $180 billion expansion of its temporary reciprocal currency arrangements, known as swap lines, to allow banks to borrow more dollars in money markets at lower rates.

Morgan Stanley, which just the other day was fine, is now in talks to merge with Wachovia.

• The Reserve Primary Fund, a giant money-market fund, i.e. a "safe" fund, "broke the buck," meaning its shares dropped below a dollar to 97 cents, and this is causing everyone to now panic like crazy about their money-market accounts, if the Times most-e-mailed list is any indication.

Oil prices are back up to $100 a barrel.

John McCain has absolutely no idea what's going on.