EGHH I think you are right the deleveraging of bank and household balance sheets has to take place. The $700bn is not mean to prevent this just try and let it happen in an orderly fashion to limit the fall out. That is sound logic as far as I am concerned.
European markets surprisingly rational and calm this morning. FTSEUROFIRST 300 just turned slightly positive.... would have got very good odds on that last night. US futures indicating slight recovery as well.