Liquidity IS the Issue

Nothing has really changed during the last week, but the markets around the world now realize, that there really seems to be a liquidity crisis. This is very bad. The lack of liquidity growing out of the lack of cash flow in MBS owned by the Street started the whole thing and now, it has spread into the world-wide banking system. This is very bad indeed.

I've never watched the entire movie, but this is, pretty much, the scenario in It's A Wonderful Life. Isn't there a run on the bank? How does it get solved? Did the fix in the movie work? Is it, really, a wonderful life? Do the people in Washington know as much as the folks who wrote the script?


Isn't this a bit silly? But, is it more silly than what's being suggested by the talking heads and the politicians? As evidenced by the lack of liquidity, there is no institutional confidence in the banking system. This is a really critical. If the big institutions have lost confidence, when will it spread into the consumer sector? Can the Fed and the FDIC hold up under a raft of bank liquidations?

I've been saying for the last year or so, that anyone would have to be nuts to run for president given the current economic and world environment. Ask yourself this, do the candidates, all of them - from city councils all the way up to presidential - really inspire confidence, huh, do they? (here's a fun fact, the guy who wrote the script for Dirty Harry had that speech - are ya feelin lucky punk, huh? - printed in his obit by the NY Times) So, you have to ask yourself, are ya feelin lucky?

I'm going to ride to work and I'm going to stop along the way to buy a lottery ticket. I hope that my bike isn't stolen while I'm in the store because, I'm not feelin lucky, am I, punk?