The U.S. Federal Reserve announced a new round of monetary stimulus this week that turned out to be the ultimate futile gesture.
Markets put out a resounding "huh?" as the Fed said it would swap proceeds from maturing, short term bonds for six to 30-year securities in what is known as an "operation twist."
The idea is to convince businesses that interest rates will remain low for an extended period of time, but few were convinced that cheap money would solve anything. The Fed has already pledged to keep its overnight lending rate at historic lows of zero to 0.25 percent through 2014 and mortgage rates have been flirting with historic lows for most of the year -- much of last year, as well.
Basically, you can't give this stuff away. Hiring is not stalled for want of cheap money, which tells you how wary the business community is these days.
Federal Reserve Chairman Ben Bernanke is, essentially, standing on a street corner holding up wads of the green stuff and nobody wants it.
Businesses, of course, have no need of investment money if there are no customers willing to go along for the ride.
Of course, creating customers is relatively easy. Tax cuts work. So do generous benefit programs.
Ten years back, these could have been viable ideas. These days, however, the national deficit is at $1.3 trillion and counting. So, it is not so easy to manufacture customers anymore.
The other temptation is to reduce regulations. Open up offshore drilling, turn a blind eye on the nation's financial environment and watch the business community jump for joy.
Theory No. 3: Allow technology to create new opportunities.
This works, too. And these days, technological breakthroughs come a whole lot faster than they did 50 years ago.
In Europe Thursday, Spain successfully sold $2.5 billion worth of bonds, lowering its borrowing costs temporarily.
That gives a little more optimism to talks among financial leaders in advance of a European summit later in the month.
There are some solid ideas in the works, including a banking union that would guarantee deposits across the eurozone and eurobonds, which would put the combined economic stability of the region, for what it is worth, behind the government debt crisis.
Leaders are also discussing international funding for bank bailouts, rather than government bailouts, which increase sovereign debt.
In international markets Thursday, the Nikkei 225 index in Japan rose 0.82 percent while the Shanghai composite index in China lost 1.4 percent. The Hang Seng index in Hong Kong fell 1.3 percent while the Sensex in India rose 0.8 percent.
The S&P/ASX 200 in Australia shed 1.08 percent.
In midday trading in Europe, the FTSE 100 index in Britain dropped 0.38 percent while the DAX 30 in Germany climbed 0.3 percent. The CAC 40 in France added 0.53 percent while the Stoxx Europe 600 rose 0.1 percent.