In the story Peter Pan by JM Barrie, the main protagonist was a boy who refused to grow up. Magically Peter Pan was able to fly, with the help of some pixie dust and happy thoughts. Without the happy thoughts however, flight could not be sustained.
There is no question that the happy thoughts ended on Wall Street this week and with the pixie dust of cheap capital in short supply, the investment banks crashed to earth.
Too much borrowed money, channeled via extremely complex vehicles into assets of dazzlingly poor quality has resulted in a cataclysmic credit crunch. Subprime and Alt-A mortgages, Credit Default Swaps, Freddie, Fannie and Auction Rate Securities are all interrelated hotspots in this crisis. Read on