Home sales tumble in response to credit crunch. Just so you know, that’s what the National Association of Realtors is saying, so that’s the sunniest possible outlook.

Stocks tanked yesterday because a French Bank said that it had to freeze funds for lack of liquidity. Basically the meltdown is going global, and the securities that they hold are illiquid. They are not normally bought and sold, so there is no market for them.

When Bear Stearns funds went out for sale, they were getting less than 10 cents on the dollar as offers.

The European Currency Board (ECB) and the Federal Reserve have injected billions in liquidity to prevent a collapse. While this is not an extraordinary action for the Fed, this resembles things like the LTCM bailout, it is for the ECB.

The ECB’s scope is far narrower than that of the Fed. They are not charged with anything but controlling inflation, at German insistence (there are still a few Germans alive remember needing a wheelbarrow of money to buy a loaf of bread).