So Bear Stearns is back in business under new ownership after decisive intervention by the Federal Reserve. Existing home sales in the US are suddenly picking up. Banks’ shares are, mirabile dictu, upwardly mobile in Europe. In one bound we appear to be free.

But not for long, in my judgment. It is, admittedly, positive for short-term market confidence that the Fed has demonstrated an unambiguous urge to throw everything that can be thrown at the credit market problem. Yet, its actions so far constitute the easy part of crisis management, if anything in central banking can be called easy.