by Calculated Risk on 11/26/2007 12:04:00 AM

Lawrence Summers writes in the Financial Times: Wake up to the dangers of a deepening crisis (hat tips Brian and Bob)

... the odds now favour a US recession that slows growth significantly on a global basis ... there is the risk that the adverse impacts will be felt for the rest of this decade and beyond.

From the WSJ: Options for Financing Drying Up in Europe; Short-Term Rates Jump (See also the Financial Times: ECB set to pump cash into money markets )

European banks are facing a new wave of financing troubles as the markets where they borrow money take a turn for the worse.

Interest rates in short-term lending markets have risen at a pace not seen since August as investors shy away from risk and banks become increasingly wary of lending to one another. The trouble has spread to areas that hadn't been severely affected -- including the €2 trillion ($3 trillion) market for covered bonds, an equivalent of the U.S. mortgage-backed-securities market that was seen as among the safest.

"There's a genuine fear here of bank failure, which I don't think there was in August," said Tim Bond, strategist at Barclays Capital.

And from Nouriel Roubini: Liquidity and Credit Crunch in Financial Markets is Back to Summer Peaks, Only Much Worse and More Dangerous (Hat tip FFDIC) Roubini provides an overview of just about every negative credit related story!

Note: There is a slew of data (especially housing related) that will be released later this week.