You have to laugh at the today's press release from the Fed on the Bear Stearn's crisis. Does the Fed think that starving the markets of information will a) stabilize expectations or b) generate more rumours?
For immediate release
The Federal Reserve is monitoring market developments closely and will continue to provide liquidity as necessary to promote the orderly functioning of the financial system. The Board voted unanimously to approve the arrangement announced by JPMorgan Chase and Bear Stearns this morning.
Here are just a few unanswered questions? How much liquidity does Bear Stearns need? What arrangements are in place? What guarantees has the Fed put in place to ensure that Bear Stearns won't go down?
Well, you won't find many answers from this press release. A lack of answers can not give anyone any confidence that the situation will stabilise.