Comment is free: Rein in finance

Comment is free: Rein in finance: "The global financial markets have turned ugly. August has seen a spasm of selling on stock markets as dealers have come to terms with the fact that the days of unlimited, cheap credit are over. Today there was a whiff of panic in the air. In London, the FTSE index lost 250 points and closed below 6,000 for the first time since last autumn. This followed a big stocks selloff in Asia, which in turn was prompted by a warning from investment bank Merrill Lynch that the US mortgage lender Countrywide could go bust as a result of the crisis in the American housing market. Merrill's comments underline the seriousness of the situation, because Countrywide is not just any old company; it is the US's biggest home loan provider. So when you hear over the coming weeks, as you will, that this is just a market wobble that will soon blow over, take it with a pinch of salt. "