Fed ‘caught off guard’ by rate of US slowdown

“Participants agreed that the housing correction was likely to be both deeper and more prolonged than they had anticipated in October,”

Ex-Treasury Secretary on Mortgage Crisis

He dismissed suggestions by Republican lawmakers that an extension of President George W. Bush’s tax cuts would provide an effective fiscal remedy. “Fiscal stimulus is critical but could be counterproductive if it is not timely, targeted and temporary,”

Fed Approves Plan to Curb Risky Lending

The Bush administration has pushed for voluntary agreements aimed at avoiding some, but far from all, of the foreclosures expected next year.

Voluntary emission standards, voluntary lending laws.

World's Central Banks Collaborate to Bolster Financial Sector

The actions are on a greater scale than the moves taken by the Fed to shore up the economy after the 9/11 attacks on the US, indicating the severity of the current situation and how seriously central banks are taking it

Update: The Guardian is calling it a "meltdown"