U.S. finance system potentially only days away from 'complete meltdown'

In a meeting with congressional leaders Thursday night, Federal Reserve Chairman Ben Bernanke presented the potentially devastating ramifications of the current financial crisis, leaving many in the room in stunned silence, according to a report in the New York Times.

On ABC's Good Morning America this morning Sen. Christopher J. Dodd, D-Conn., chairman of the Banking, Housing and Urban Affairs Committee, explained that they were told, "that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

The article goes on:

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”

 

“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”

 

Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.

 

“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”

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