Mon 13 Aug 2007
Insinuation of cause & effect that says more than the author realizes in 3…2…1…:
Global stocks staged a strong rally on Monday after central banks pumped emergency funds into the markets for a third consecutive trading day. […]
The liquidity injections by central banks helped to ease the worst of investor fears over the short-term fallout from a liquidity crunch in credit markets following problems in securities backed by US subprime mortgages – home loans for people with poor credit histories.
Sentiment had been hit last week by worries that some financial institutions had become reluctant to lend to each other because of fears that European investment vehicles were nursing big losses on subprime-related securities.
This prompted central banks in Europe, the US and Asia to offer emergency injections of liquidity on Thursday and Friday, a move that continued on a smaller scale on Monday.
You call it “liquidity”, I call it “funny money”. To-may-to, to-mah-to…
I’m no professional on this, but the attitude offered here strikes me as nonsense. It seems like any semblance of skepticism about investments is read as unambiguously “bad”, as if markets are supposed to be all about an exaggerated sense of calm. If casinos were treated this way, methinks Nevada would go bankrupt overnight.