For once I'm in total agreement with Cramer. Bernanke is dangerously out of touch and has lost the market's confidence. The Fed has been behind the curve this entire credit crisis, and they fell further behind today. The government will have a huge financial meltdown on their hands soon.
No way. The market was barely off of new highs. You're the one that's clueless. Those people got themselves into trouble. It's time to dig themselves out. It's not Ben's responsibility to do this for them.
This isn't a credit crisis. This is a HOUSING crisis. If real estate was marketable this wouldn't even be a market event. It's not like people all of a sudden were in homes they couldn't afford. What is new is that they couldn't sell their house. Now a bank owns it. And the bank can't sell it either. Monetary policy is impotent in averting the accelerating trend of market reevaluations. Think Tech 2001. I submit that even if every mortgage was on zero-interest: home prices would still collapse. Cost of carry means nothing when prices are correcting 10-20% a year. On the other hand the persistent strength in grains, meats and energies should be ultra alarming to Fed policy makers. It sure is to Trichet. AAA, I hope your not in the camp of Robert Reich and the liberal yahoos who seek currency debasement and inflation as a cure-all for the dreaded "R" word.
Not at all. It is simply a question of which risk do you run? A financial meltdown with several large banks going belly up with attendant bailout costs, or a speculative future issue with inflation or dollar weakness. Most of the inflation is in areas that the Fed has no effect on. Take grains for example. Or the entire ag complex. Are they signaling the Fed is too lax, or are they simply responding to overseas demand and an idiotic domestic ethanol policy? Energy, same story. Will Fed rate policy influence medical costs? I don't think so. You want market evidence that the Fed is behind the curve, look at the TED spread.
Fed should leave rates alone. Screw the Banks, they love to screw us every chance they get. Its about time Mr Wall Street and Mr Fatass Banker got what was due them. John
Its funny how all the sudden bernake turns out to be a 'moron' just because people are in the red on their investments