The mother of all bank runs?

It's plain that the current financial crisis is worsening in spite of--or perhaps because of--the Treasury rescue plan. 

The strains in financial markets are becoming more, rather than less, severe in spite of the nuclear option of a $700 billion package: Interbank spreads are widening and are at a level never seen before; credit spreads are widening to new peaks; short-term Treasury yields are going back to near-zero levels as there is flight to safety; credit default swap (CDS) spreads for financial institutions are rising to extreme levels as the ban on shorting of financial stock has moved the pressures on financial firms to the CDS market; and stock markets around the world have reacted very negatively to this rescue package. More...

See also:

• Another top European bank falters...
• Pat Buchanan: The party's over...
• Safe and sound, maybe, but bank customers are understandably nervous...