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The bedrock of any transaction is faith. When faith in a trading partner collapses, the repercussions are swift and severe - just ask Bear Stearns.
Faith in markets themselves is now under strain. In the US, there are calls for the authorities - already under scrutiny for their role in the rescue of Bear - to intervene further to save the economy. Across much of Asia, governments are imposing price caps and trade bans in efforts to contain surging food prices. In the UK, there is talk of capping rising gas bills for poor families.
Politicians are uneasy with the outcomes current market structures are delivering, particularly when it comes to inflation. They have good reason to be concerned, especially in developing economies. Low-income populations that suddenly find essentials unaffordable can turn desperate and angry.
Emergency measures, however, also carry significant risks. High prices curb consumption and encourage investment. Keeping them artificially low distorts that mechanism and keeps demand high, widening any supply shortfall. Chinese fuel subsidies are a salient example. The US also distorts the markets for energy - and, by extension, food - with subsidies for corn-based ethanol.
The wider risk is that, after almost three decades in which deregulation has flourished, the case for free trade is faltering. Even in the US, globalisation's perceived impact on many families' incomes (downward) and food and fuel costs (upward) encourages populist intervention from the state.
Hedge funds are blamed for exacerbating - and profiting from - shortages of commodities. Confidence in markets is further eroded by Wall Street's role in the subprime fiasco, coming soon after the tech bubble.
A regulatory resurgence is building, carrying with it the potential to overshoot. A more insidious threat is protectionism: emergency trade controls and "one-off" import duties can be habit-forming for politicians and can also spark a tit-for-tat pattern.
Piecemeal actions to rein in markets could have unintended consequences. Policymakers need to tread carefully.
Microsoft and Yahoo
Is Microsoft finally getting ready to play hard? During the two months of phoney war since the software giant launched its unsolicited offer for Yahoo, it has avoided doing a Larry Ellison. Given the integration and regulatory risks inherent in buying Yahoo, a friendly deal makes more sense than a bloody battle along the lines of those waged by Mr Ellison's Oracle in recent years.
But the softly, softly approach has made no headway. Microsoft's latest letter to Yahoo explicitly threatens a proxy fight, and the chance it will reduce the value of its offer (initially pitched at a 62 per cent premium).
It is a credible threat. Yahoo has no suitor to match Microsoft's bid. Given recent mis-steps and the strength of rival Google, investors would be brave to bet on a straight Yahoo turnround.
In fact, Yahoo's best negotiating position seems to be Microsoft's desperation to acquire the internet portal - as a last chance of catching Google - coupled with the hope that Microsoft will not risk outright war. After all, it could take a year to clear regulatory hurdles in the US and Europe. A rudderless Yahoo could continue losing ground to Google.
The stand-off looks like a battle over how much Yahoo's backing is really worth to Microsoft. The answer is: probably a few dollars. Microsoft originally bid $31 per share. The implied offer has slipped to about $29.50 as Microsoft's stock has fallen.
Even at this stage, Microsoft cannot really want to follow through on its threat of cutting its offer and waging an aggressive proxy fight. Given the strategic importance of the deal for Microsoft, Yahoo should still be able to push the bid above $31. But it is a delicate balance.
The longer Yahoo holds off, the more desperate Microsoft will become. That could force it to raise its offer to secure a deal. It could also mean Microsoft loses patience and goes nuclear. Unless the two sides start talking soon and avoid a bitter showdown, it is Google that will emerge as the clear winner.
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