Markets fall across the globe in response to a liquidity crisis, which the New York Times' Floyd Norris compares to the bank runs of a few generations ago, while CEPR looks at the factors that led up to the recent instability, and Danny Schechter asks: 'Subprime or Subcrime?'Noting that "when liquidity dries up, the normal tools of policy lose much of their effectiveness," Paul Krugman warns of the possibility of "a chain reaction of debt defaults," as Nouriel Roubini predicts "a hard landing," and another analyst comments, "we all need to get used to days like yesterday."
My understanding of finances is notoriously poor, and perhaps as long as the government can print money and decide what it's worth, and it's not connected to any real commodity, there's no need to worry about the supply. But it does seem to me that if the number of subprime loan defaults in this country is large enough to cause a reaction overseas that requires a major adjustment to the economy back here, the economy isn't as rosy as the news people keep telling me. Or at least there might be a slight problem.
....but hey, do what you want....you will anyway.
