Markets and pain: Not enough pain

Financial markets are breathing a sigh of relief. The central banks’ decision to flood the markets with liquidity on increasingly attractive terms - the latest move being the European Central Bank’s decision to provide E40bn of three-month money - seems to have averted panic. But if the panic is already over, it is too soon. The credit crunch probably hasn’t caused enough pain. Sure, a few hedge funds have closed their doors and investment banks are going to have a pretty awful third quarter. B...