Could you explain this in plain English please. What's the "sand", what are the "gears", what is the "grease" and why is it necessary.
1. Of course the Fed should be abolished. But that's not an option on the table, as far as I can see. 2. The issues with the Fed adding liquidity have nothing to do with yesterday's action in the indices, except for the follow-on effect downmoves have on cash balances of natural longs. What the Fed is trying to avoid is the overnight rate tracking higher than the target, which it did yesterday, at 4.29. I continue to think the answer is to cut rates now, and raise them back in a few months. But I'm sure there isn't anyone within 100 miles of the Fed with the nuts to do it.
Presumably so that basis & people like him can afford more exotic imported automobiles, Michelin star restaurants, penthouses in Chicago/NYC etc. It's the American Dream, don't you know.
Gears: Interbank lending market. Almost totally dependent on trust. Sand: The current culture of fear and distrust. If the interbank lending market doesn't work, it serves as a massive tightening of credit. Grease: At least partial removal of the penalty for using the discount window. Steep cuts with open intentions to take them back would be better. What you "no way should he cut more" guys don't get is that the lending market isn't functioning correctly right now. Things are *very* tight at the moment.
You assclown, I trade my own money in the same shit as everyone else, from home, every day. My USD are getting punished the same as everyone else's. I just know a fucked-up situation when I see one.
Exactly.............something they should NOT be permitted to do in the first place........as we`ve been warned before by the founders of this "once" great country.
What I get is that in a market economy we have overshoots. The lending market was functioning way too "correctly" for a long time and now it's not, so boohoo cry me a river. If you want the booms you must want the busts. Either that or hop a plane to cuba.
Bernanke's working hard, just not communicating very well with the markets. That's typical of an academian. If I were him I'd put in for some additional funding for a legion of staff writers at the Fed. This morning's actions shows he's VERY CAPABLE in using tools at his disposal, just not capable of telegraphing/communicating any of his intentions/actions. I, as much as the next guy, hate putting blind faith in any governmental institution; but in the case of Bernanke and the US Fed, I guess just go with it and stop obsessing about it. After all, there's very little to control there and they're doing what they can. Good Luck!
*** Rant on These guys are either clueless or liars. All last year they were saying things were ok and contained. Don't worry. Ron Paul was right. Noriel Roubini was right. Michael Shedlock was right. Bankers are the biggest scum. They always have been. rant off ***