Bernanke's Looking Sharp

The "Bernanke Put" is allowing longs to liquidate unfettered by too nervous to press speculators. The tape was YELLING that this afternoon. Long's are getting a nice short covering market to unleash inventory into. For those awaiting: a slash in the Fund's rate at prices above Friday's "temporary" discount rate cut will prove to be like waiting for Godot.

Bernanke truly doesn't want to publicly reset the Fund's target. Bernake understands what Greenspan didn't. In Central Banker World tenacious in your face "D" get's you more knowledgeable props than showboat scoring.

A cut is like a bullet. Once it's fired it's gone forever. Bernanke knows he needs ammo lower.

While inflation/dollar concerns are less worrisome now than a month ago, I'm sure the Board would like a look at current post crisis data. I look at baseball attendance. American's are spending like they ain't worried.......

 

You assume the Fed has any true impact long-term. Bernanke is reactive, not proactive. He witnessed the decimation of the Nikkei after NY closed up, so he cut. Baseball attendance? That's a useful statistic. Ever seen a White Sox home game? The homies can let loose with a nine and not hit a single fan. How are the condos selling in South Florida?

 

He cut nothing!

 

You're honestly going to argue that the discount cut wasn't material? Bernanke and Dodd are death to the economy and the dollar. Paulson is the man.

 

Agreed much nicer to liquidate at the levels. The press is doing their job by keeping the shorts nervous. And these meetings well they are doing thier job as well.

Well lets see what tommorow brings, more chills and spills on the next Speed Racer Show!!!!!!!

 

There's no action at the window. Hence merely cutting the dr was just "window dressing".

 

There never is any action, regardless of handle. The ABX is still imploding. The only favorable impact was seen in the equity markets. Stating he didn't cut is orthogonal to the issue at hand.

 

i think DB came by to show "support for the fed"

--mm

 

The issue is if he's going to take meaningful action, i.e. cut the Fund's rate, with the market at these levels. He isn't. By Friday the market will be retesting 1418. He'll never cut on a 1400 handle.

 

Can you argue that it was material?

Last week there was an average of $10m/day lent out at the discount rate, obviously immaterial. We'll find out this week's numbers on Thursday and I'll bet it's less than $100m.

Martin