Lack of Liquidity & Confidence

I deal with these 2 issues from Bush 43's speech since they are two sides of the same coin.

Lack of Liquidity: the system is flush with money and liquidity to the tune of about $400 Billion is direct liquidity injections from the US Treasury alone not counting what other countries are injecting. It is not a liquidity problem but a confidence in the government! Let me say it again...

This is a credit problem caused by institutions now not knowing what the rules are with the huge amount of government intervention. These rules changes cause investors to stop and go to cash since they investments may be end up becoming into competition with the nationalization process under way by the US Government.

Lack of confidence in financial markets: see the above discussion about lack of liquidity. This lack of confidence is in the US Government as it turned almost 90 degrees from free-markets to socialism. This is keeping big players out of the US markets and those that are in are leaving in droves. Why invest in US financial markets when the US Government is nationalizing these assets.

There is lack of confidence in the US Government, not liquidity.