Even positive moves such as rescues can have international repercussions.
Ireland's promise to guarantee all liabilities of its biggest banks a few days ago threatened to spark a run on English banks as depositors switched from one to the other.
"We're seeing on a global basis what could be called competitive bailouts," Yardeni said. "Governments are trying to bail out their systems without consulting other governments about what they think and what the implications might be for them."
Now that Europe is fully involved, financial troubles have continued to spread eastward. Russia's stock market has crashed and shut down at least until Friday, an event that ordinarily would prompt front-page headlines by itself. Now it's a footnote in the wider emergency.
All this explains yesterday's belated attempt by world authorities to bail from the same bucket. Some economists have urged industrialized nations to go beyond coordinating short-term interest-rate moves and agree to jointly guarantee interbank loans and other credits.
Paulson, however, said it might not make sense "to have identical policies." This weekend he and other finance ministers and central bankers from developed nations will meet in Washington to plot their next move. Given that the world has one economy now, don't be surprised if Paulson and his peers move toward one increasingly identical policy.
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Read more about the economy on Jay's blog at baltimoresun.com/hancockblog
