When Any News Is Good News

More

Stock markets perked up today partly at the announcement of new coordinated liquidity arrangements by the big central banks. (There were some modestly encouraging private-sector payroll numbers too.) Reaction to the central-bank initiative could have gone either way, I think. Since the move shows how anxious the monetary authorities are about what might be coming next from Europe, I wasn't especially reassured. If you see emergency workers stockpiling sandbags and bottled water, is that good news or bad?

James Hamilton at Econbrowser has a nice clear explanation of what the central banks' announcement really amounts to.

No action by a central bank can solve the problem of a debt that's not going to be repaid. But central banks can help avoid the added economic damage that is caused when markets for all loans, good or bad, get disrupted by the uncertainty. In the fall of 2008, the Fed successfully figured out how to navigate that fine line. Let's hope they have the wisdom to do so this time as well.

Or better yet, let's hope the new facilities don't need to be used at all.

I second that.

Jump to comments
Presented by

Clive Crook is a senior editor of The Atlantic and a columnist for Bloomberg View. He was the Washington columnist for the Financial Times, and before that worked at The Economist for more than 20 years, including 11 years as deputy editor. Crook writes about the intersection of politics and economics. More

Crook writes about the intersection of politics and economics.

Get Today's Top Stories in Your Inbox (preview)

What Do You See When You Look in the Mirror?

In a series of candid video interviews, women talk about self-image, self-judgment, and what it means to love their bodies


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.

Video

What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.

Video

Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.

Video

Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Writers

Up
Down

More in Business

Just In