The FT has reported that Alan Greenspan, the
former chairman of the Federal Reserve has said:

More banks and financial institutions could end up being bailed out by governments before the credit crisis is over

He aded:

a heavy-handed regulatory response to the crisis would do more harm than good because it would depress global share prices.

And apparently he's worried that:

governments, already troubled by inflation, might try to reassert their grip on economic affairs.

If that becomes widespread, globalisation could reverse, at awesome cost

I am reminded that Keynes said:

Practical men, who believe themselves to be quite exempt from any
intellectual influence, are usually the slaves of some defunct
economist.

Greenspan is, without doubt defunct, but he's not stopped kicking yet.

It's time to recognise three things:

1) Default comes with the cost of regulation;

2) Market regulation is always beneficial: it stops the inevitable and inbuilt tendency of markets to self-destruct;

3) There is almost no link between the stock market and the real economy. Stock markets are not used to raise equity unless companies are in trouble, 99% of all share dealing is in second hand pieces of paper and is gambling: nothing more or less; whilt the liquidity this creates is designed solely as a veneer to allow financial services companies to extract value from the funds they manage, so undermining (and in many cases destroying) the future worth of those investments to fund the current excessive lifestyles of those who expropriate them for their own current benefit.

Where else do you think the excess of the City comes from?

That's why it needs to be stopped.

And as for solving the banking crisis: if house prices are key to this I think my intervention suggestion better than the direct bailing of banks.