The fact that most of the supposed smart people in Washington DC can't understand why the markets are continuing to dump regardless of how much money or interest rate cuts they throw at it. They simply don't understand human nature. They think that if they dump a bunch of liquidity (print money and add it to the money supply) everyone will think, "Well, that's keen, I think I will start lending/borrowing again..."
The reason that the markets continue to dump is very simple, people want cash more than they want investments. They think that cash will be worth more than investments so they exchange one for the other. When there are more sellers of stocks then there are buyers, the sellers have to lower their prices in order to entice more buyers to come off the fence and take the investments off their hands.
When you have fear driving the selling motivation, see "fear is stronger than greed" (Nanouk Miller October 1987) then you have prices move lower faster and harder than they rise. This is the reason that bull markets take 2-3 times as long to rise an amount equal to the amount lost in a bear market.
Fear trumps greed.
So adding more dollars to the market doesn't deal with the fear issue and so the markets continue to dump until the price at which the investments move overcome the fear and reignite the greed motivation. This takes time and patience.
The other reason for the crash in the markets is that you can't use investments to buy food, pay mortgages, or tip a bellhop at a hotel. You must have cash, and so cash rules in a bear market and since most people don't know how to short sell, they can only make money when the markets rise. Oh, and by the way, the US Government now a socialist entity has outlawed short selling as being bad!
Watch what happens tonight at midnight when the short selling ban ends ;-)
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