The entire market rally has been motivated by "excess liquidity = money for everything at virtually any price". The excess money makes it easy to be loosey-goosey with paying-up for PE deals, buybacks, leverage-up-the-butt. The current cry for "more liquidity" is a sham. There's a BOATLOAD of liquidity in the system. If we accept the conventional wisdom of "liquidity = convertibility to cash", we can see that the problem is NOT "available cash" but rather "willing cash". That is, investors have become concerned (1) they cannot determine the actual value of CDOs and other derivatives, so they are unwilling to bid anything at all, and (2) lenders are no longer putting out loans on a "low credit score, no down payment, no income verification, 125% LTV ratio" basis.... as they are just too risky. It's not that there is "low liquidity" in the system, but rather there is "low willingness to pay for risky assets". When the "unwilling to take on more leverage... REGARDLESS how how much the Fed pumps the money press" psycho sets in, the Fed will be acknowledged as an ineffective, irrelevant, print-money, inflation machine... and the whole house of cards will come tumbling down. Where are we in that process? Can't tell for sure, but it had better be on the the minds of us all. Got gold?