Stock Market Crash: How to Stop It

As I write this, the stock market—already down nearly 40 percent for the year—is dropping like a rock made of concentrated fear. Some $3 trillion in stock market wealth is gone as institutions, and now individuals, continue to liquidate, liquidate, liquidate. How will it end? Hopefully like this, says superstrategist Ed Yardeni:

Of course, no one can tell how much longer or how much worse the panic selloff will be. The best case scenario is that the capitulation and revulsion phase of this extraordinary global bear market will climax today. Then on Sunday before the Asian markets open, the world's largest Sovereign Wealth Fund—the U.S. Treasury's TARP—will announce the names of 10-15 major financial institutions that will each receive $10 billion in capital, in exchange for equity stakes similar to those acquired by Warren Buffett from Goldman and GE. In my dream scenario, the Treasury temporarily guarantees all bank debt and the SEC suspends mark-to-market accounting on Sunday retroactively to June 1 of this year. Central banks announce that they have set up a facility to intermediate the interbank funding market. The three-month Libor plunges to 2.0% Monday morning. The money markets start to function again. The price of gasoline falls to $3.00 a gallon. Call me a dreamer.