The banks today are like LTCM in its day. If you scew them you bring the whole thing down. The banks are taking their hits but won't be allowed to go under if the FED can prevent it. He can't raise the rates right now because this would aggravate the disaster to catastrophe status. He's telling us he wants to treat the current situation as an emergency that must be tended to immediately. Later, when the economy's stabilized, he'll work with Gov't to deal with the inflation that will inevitably be exacerbated by any rescue package. I think you'll see a much tighter coordination of efforts between FED and Gov't than has existed in the past until stability is restored.
You're a very amatute troll. You know that right? Take a few lessons from detective aka stock tr3der.
I think he should raise rates 100 bps to wring out the excesses in one swoop and tell market participants there ain't no Fed put anymore. And all those speculating homeowners can go suck it (along with the banks who lent them the money).
What will we 'piss away"? Share value? OMG, the humanity! A crisis? Unavoidable my dear friend. At the end of the day it's all about housing and liquidity ain't the solution. This revalue is predicated upon a bunch of economic factors more engulfing than reduced cost of carry. Think JNPR, 2001-2002. It's not about the Fed window. Inflation is a vis' a lower dollar is however the Fed's perusal. AAA, you just cannot allow a situation where you PUNISH savers by keeping rates artificially low while consumer prices and commodities ratchet higher. Fighting recessions in such a manner is rather South American, eh? Hence $900 Gold. And what about Trichet and the ECB?
Why do you bother to respond? When your argument fail you resort to attacking? Pretty soon you will start finding faults in my syntax and grammar. Thats what people do. The fact remains BERNANKE is behind the curve. He reacts rather than leads, his stupid policies are bringing on a recession and a collapse of banking and financial sectors, and lastly our great bull market , that has enriched all of us.
What I meant by "piss away" was that the venal idiots in congress and the administration are now in a panic to shower people with money under the guise of stimulus. Plus, if things continue on their current trajectory I can see FNM and FRE lining up at the Treasury for a taxpayer-funded bailout. If a couple of bond insurers go insolvent, which could easily happen, do you think congress will just let muni debt get destroyed? Not in our lifetimes. So by the time the smoke clears, we will have wasted hundreds of billions of dollars. I fully understand the concerns about inflation, the dollar, moral hazard, etc but we're in a situation where we have to choose between less than ideal options. A big drop in rates lowers the temperature and gives the financials some breathing room. Plus, it is inevitably going to happen eventually anyway. That is my main beef with Bernanke. He has fiddled while the pot boiled over.