The business press is starting to get used to this crisis-and-collapse thing. There was an eerie prescience in this morning’s papers, a jittery and feverish anticipation that broke wide open in today’s markets.

The mood in the markets fed the mood in the papers which transmitted it back to the markets, creating a ferocious feedback loop of information without clear beginning or end. It has familiar echoes of the subprime drumbeat that began in the spring of 2007.

To their credit, the papers walked a fine line between sounding alarms, which they clearly were hearing, and sounding alarmist, and mostly did a good job. News analyses this morning tended to be on the muted side, but the issue of the Greek financial rescue and its implications was fully vetted before markets opened.

The Wall Street Journal captured the spooked sentiment well, in a report this morning:

“There is probably nothing more frustrating for policy makers [than] to see that the Greek program is already being brushed aside by the market, which is now entirely concentrated on a full-blown contagion across euro-area countries and euro-area asset classes and spilling over to global markets,” analysts at the Royal Bank of Scotland wrote in a research note Thursday.

The FT’s Alphaville put some meat on those bones, with a report that showed the credit market “was in the midst of its most severe correction since the early months of 2009.” Want more proof that something bad is about to happen? “Spreads have now widened beyond the last three spikes in bank spreads: the collapse of Bear Stearns, Lehman failure and the latter stages of the banking crisis in March 2009.”

Right. This Greek story should have our attention. The Journal, to its credit, has gone to town to tell it, with lots of reporters, bells and whistles. When it comes to explaining how that contagion would work, it’s a good place to start.

At the FT, Martin Wolf’s Wednesday analysis of the $145 billion rescue stood out for its clarity.

For other eurozone members, the programme prevents an immediate shock to fragile financial systems: it is overtly a rescue of Greece, but covertly a bail-out of banks. But it is far from clear that it will help other members now in the firing line. Investors could well conclude that the scale of the package required for tiny Greece and the overwhelming difficulty of agreeing and ratifying it, particularly in Germany, suggest that further such packages are going to be elusive. Other eurozone members might well end up on their own. None is in as bad a condition as Greece and none has shown the same malfeasance. But several have unsustainable fiscal deficits and rapidly rising debt ratios. In this, their situation does not differ from that of the UK and US. But they lack the same policy options.

This story, in short, is not over.

That’s pretty clear, and pretty convincing.

Peter Boone and Simon Johnson offered their own threat assessment, and the headline makes clear where they stand: “It’s Not About Greece Any More.” They looked more at the fears of contagion that prompted the EU to act.

Last week the European leadership panicked – very late in the day – when they realized that the euro zone itself was at risk of a meltdown. If the euro zone proves unwilling to protect a member like Greece from default, then bond investors will run from Portugal and Spain also – if you doubt this, study carefully the interlocking debt picture published recently in the New York Times. Higher yields on government debt would have caused concerns about potential bank runs in these nations, and then spread to more nations in Europe.

When there is such a “run” it is not clear where it stops. In the hazy distance, Belgium, France, Austria and many others were potentially at risk. Even the Germans cannot afford to bail out those nations.

That Times chart is a doozy. The story that went with it set out a domino theory, with the Greek domino at the head of the row. Greece owes a lot to Portuguese banks, Portugal owes a lot to Spanish banks, etc., etc.

The numbers quickly mount. Ireland is heavily indebted to Germany and Britain. The exposure of German banks to Spanish debt totals $238 billion, according to the Bank for International Settlements, while French banks hold another $220 billion. And Italy, whose finances are perennially shaky, is owed $31 billion by Spain and owes France $511 billion, or nearly 20 percent of the French gross domestic product.

“This is not a bailout of Greece,” said Eric Fine, who manages Van Eck G-175 Strategies, a hedge fund specializing in currencies and emerging market debt. “This is a bailout of the euro system.”

Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at