You could be forgiven for missing the latest installment of market panic over the past ten days. It came and went like a summer thunderstorm — passing over the global financial landscape quickly and violently. But unlike meteorological events that inflict actual harm, the sharp gyrations of financial markets have increasingly less relationship to real-world economies and exist in their own never-never land of self-fulfilling prophecies and conventional wisdom.
The Edgy Optimist
The Federal Reserve just announced a new round of measures designed to keep the money flowing. Central bankers – not to be confused with the heads of private banks that have received so much opprobrium for their role in the financial crises of the past years – are not noted for their charisma or their communication skills, but their role in shaping today’s world, shadowy at times, could hardly be greater. The question is: Are they helping or harming?