The FTSE fell by 6% this morning, despite the fact that congress approved the bailout.
The Times reports that Alistair Darling will make a statement later today on whether he will bail out the UK's banks.
On Saturday Angela Merkel, the German leader, criticised the Irish decision to guarantee all deposits in their leading banks without consulting other European countries. One day later Ms Merkel was forced to take almost the same action.
All very well.
However, the uncomfortable truth, that governments dare not speak of is that if there were to be a serious run on the banks the governments that have guaranteed the deposits (Iceland, Ireland and Germany) would not be able to honour their guarantees.
What we will now see is a re run (albeit on a much larger sale) of the day when Britain was forced out of the ERM by market forces. This time market forces will show that a country's guarantees are worthless, and are in effect a house of cards.
The market will win, but at a terrible cost.
Iceland will be the first to go. It is clear that the governments, and political systems, of the world are not able to keep pace with events.
The long term result will be that banks across the world will end up being nationalised, and every citizen of the world will end up being in debt for the rest of their lives.