You know things are really looking bad on the markets what the central banks start pumping in money to ease the liquidity crunch. And it seems to have worked for now with reports that things have calmed down.

But the question is whether it will be enough. And it won't. The basic problem is that US mortgages are more than just home loans. They are platforms for banks to hang a lot of derivatives off, which means the risk is spread around.

And that's where the problem lies. The risks and exposures are spread so wide that nobody knows where they start and end. And that means the fund injection from the banks is just a band aid solution. The volatility will continue for some time because risk is being re-priced. And we won't have a proper price until the risk is located and audited. And that could take some time because interest rates are still relatively low.

What that means is there are a lot of unknowns and imponderables here. Reminds me of former Secretary of Defense Donald Rumsfeld's immortal quotation:

"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know."

Which raises the question: do the central banks know something that we don't?