The Fed announced a rather routine financial operation of exchanging long-term debt by short-term papers, or vice versa, it makes no difference for the matter, and the world reacts with panic, hystery, throwing everything off and running for shelter.
Cohl wrote about this mass thing:
The point isn't that the panic is constructed of whole cloth but that the kernels of disturbing truth in them are touted disproportionately and repeated ad infinitum; for example, in the case of the Chilean grapes, two grapes were found to contain nonlethal amounts of cyanide. But the media-spawned legend, rather than the truth, had passed into public consciousness, and eventually the FDA pulled all Chilean fruit from U.S. markets. Why does this kind of thing happen, over and over?Media madness and simple human psychology fuel the fires of paranoia. Alarming headlines ("Breast Cancer Strikes One in Eight Women,", U.S. News and World Report) are derived from misunderstood or misquoted statistics ("Breast cancer strikes on in eight women at age 95," National Cancer Institute). So Greece, a marginal country, has problems in paying back its debts, but why should Europe and the world sink into depression as a consequence?
(pic: Stampede victims of the Duisburg Love Parade Festival, July 2010.)
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