[chicken little ] meet dr pangloss

It's everywhere - Citygroup writedowns and now:

France's biggest retail bank, Credit Agricole, is contemplating asking shareholders for 5.9bn euros (£4.7bn; $9.1bn) to help its financial position.

The move comes after more write-downs at its Calyon investment banking unit as a result of the credit squeeze.

Meanwhile, the country's second-largest bank, Societe Generale, said its own write-downs had led to a 23% fall in profits in the first quarter of 2008.

"The fact that they need another six billion euros of capital is worrying and I'm staying cautious (on the stock)," one Paris dealer said.

So how should we react? Sackerson quotes Michael Shedlock:

"The worst of the crisis in Wall Street is over," Buffett said today on Bloomberg Television.

Warren Buffett's mistake is not comprehending the magnitude of the derivatives mess, the magnitude of the fallout of the housing bust, and the magnitude of the fallout of a global credit boom now going bust. The economic reality is that this is closer to 1929 as opposed to 1987.

Don Boudreaux though quotes David Harsanyi who feels the important thing is:

Seeing past the Chicken Littles

Sackerson comments:

Well, many Chicken Littles make a Chicken Big, and she's coming home to roost.

Are you a Chicken Little or a Dr Pangloss?