I have to admit, the Fed loan of $200 billion to banks confuses me. Fortunately, McCardle is there to explain it to us non-economists.

What’s happening to the credit markets is a little akin to a bank run. The underlying conditions may be somewhat shaky, but what’s really screwing things up is that everyone’s trying to run for the exits–or just play possum–at once.

So this is the equivalent of the Fed slapping people and telling them to come to their senses — some mortgage-backed securities are good investments.

Boy, James Surowiecki must be loving this.