On: China to inject $174B of liquidity on Monday as ma...

[cltsang]

Pardon my lack of economics knowledge. They may be able to keep the stock afloat for a few days, then what's next? Where will the money eventually go?

How can this help when economic activities halt?

[MR4D → cltsang]

This is a liquidity event, not a stock market problem. They have to be solved differently.

So you are right that they may help the market for a day or two, but that won’t solve the underlying issue as you suspected.

More will be needed. Much, much more.

[bitxbit → cltsang]

Companies will face cash crunch because they temporarily can’t sell (since they can’t make widgets). This will help them bridge that gap in theory.

[PeterisP → cltsang]

When economic activity is temporarily unexpectedly reduced, companies start running out of cash / working capital.

Injecting extra liquidity means that companies are able to get short-term loans to cover expenses and continue functioning, instead of going bankrupt during the chaos (which would also facilitate bankrupting their suppliers and creditors).

[QuesnayJr → cltsang]

It's standard Keynesian monetary policy. There's bound to be some impact on the economy from the coronavirus, but sudden shocks to the system cause the economy to overreact, and far more people get thrown out of work. If the government overstimulates, then you get inflation, but in a crisis unemployment is a bigger problem.