Something Weird Is Happening on Wall Street, and Not Just the Stock Sell-Off

Bond prices and stock prices were moving together, not in opposite directions as they usually do. On a day when major economic disruptions resulting from the coronavirus pandemic appeared to become likelier -- which might be expected to make typical market safe havens more popular -- many of them fell instead. That included bonds of all sorts and gold.

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All this suggests that major financial players are experiencing a cash crunch, and are selling whatever they can as a result. That would help explain the seeming contradiction of assets that should go up in value in a time of economic peril instead falling in value.

As the 2008 experience shows, it's also a type of problem that the Federal Reserve is relatively well positioned to understand and respond to. In its role as lender of last resort, the central bank's job is to try to prevent a cash crunch in the economy, even if it has to take unusual means to do that.