Fed Faces Old Foe as Hazard Returns .

To seasoned investors, last week's sharp market swings were a fresh reminder of a problem tormenting financial markets: moral hazard.
Stocks jumped, then sank and then rose again, as investors tried to bet on whether the Federal Reserve is going to intervene again to support financial markets.
Economists sometimes refer to that kind of market behavior as moral hazard, which refers to risky investing done in the hope that government will bail people out of any trouble they get into.