Liquid relief

The markets eased into the holiday weekend on twin reasurrances from Bernanke and Bush. It's hard to think back to the time when the markets weren't pushing the government around with such ease, didn't have this tried and true call and response routine worked out with CNBC and, by extension, both the investing masses and the elites.

It's striking how quickly we've gone from general talk of "excess liquidity" driving up the prices of all sorts of assets from real estate to collectibles to equities to a liquidity shortage or "credit crunch." So on with the spigots! A direct injection here, a discount rate there (a symbolic gesture that did not in fact result in net added liquidity for the week in which it happened), a tweak to Federal Mortgage insurance there, keep it flowing. I think there's plenty of liquidity out there, it's just in private pools, stagnating and fostering mosquitos.

And, at the end of the day, when the dollar crumples, China eases out of Treasuries and the current account deficit hangover, we'll be left like Russia in '98: too poor to buy imports. So who could be the big winner: Detroit.