There is a subprime mortgage loss-resolution mess, and financial institutions of doubtful solvency are in trouble, to be sure, but regulators and commentators should stop calling such problems a "liquidity crisis". A liquidity crisis is characterized by an excess demand for liquidity, that is high-powered money, at normal interest rates. Either the interest rate rises sharply (as in a classic nineteenth century financial panic), or the central bank injects high-powered money. Neither has been happening in recent months. Short-term rates have fallen, and have fallen without the Federal Reserve expanding the monetary base.