Merrill Lynch says the pain caused in the credit markets could mean more government intervention, even a Swedish-style bank takeover.
This from Michael Hartnett, Merrill's emerging markets equity strategist:
The Good Looking Swedish Model
The failure of TARP legislation worsens the short-term credit situation. But in so doing it increases the likelihood of a Swedish-style recapitalization of the banking sector in the US. This chemotherapeutic event marked the September 1992 equity low in Sweden. In stark contrast, the Japanese preference for the morphine of a "Price Keeping Operation (PKO)" at exactly the same time condemned Japanese equities to a multi-year bearish trading range.