I tend to agree with you, but your wrong here. If the Fed lowers rates all they are going to do is continue this mess for a little bit longer. Ultimatly the piper is going to be paid. They should still have an inflation bais, have you been to the grocery store or the gas station lately? Have you seen how worthless the dollar has started to become? If anything they should raise rates a quarter of a point, but with the current liquidity issues there is no way they can do that either.
Just curious, but what makes you think I am from the midwest? Also, I think calling me a Bush supporter is not very accurate either. I have supported him at times, but I have consistently criticized him on immigration, budgets and the tactics used in Iraq. I appreciate the point about socializing the financial risk that hedge funds, their investors and investment banks willingly took on. It is troubling, but there is a vast human toll if this turns into a nasty recession or worse that also worries me. I don't think pretending everything will work itself out is an adequate policy. Greenspan followed a course similar to the one Bernanke is on during the 1990-91 S& L crisis and the end result was Bill clinton and Al Gore going around braying about the "worst economy in 30 years" or some such nonsense.
the fed. is fogging money to the banks so they can repay the Aug. - Sep. hedge fund redemption cycle coming up...... can you spell reflate....I knew you could....
A Band-Aid solution to a festering condition. Is the system not awash in liquidity already? When is enough enough? "Feeling a bit down about being obese? Here, have some cake, that'll perk you up."
But how will all this liquidity help the sub-prime CDOs? If people are defaulting on these loans, the CDOs are worthless regardless of rates or liquidity. This liquidity is a quick fix, but doesn't address the real problem: malinvestment (mostly in residential real estate) when money was loose.
No and Yes; someone swap his $38B at rate of 5.25% which is the discount rate. And there is no way for small investor to get this kind of rate. So; Fed and his bankers just fingered everyone else; and dilute people's purchasing power. Just watch out the long bond rate 30years; See who are the suckers to purchase these close to become junk bonds. It is not the end of world yet; we can still solve this problem by increasing quota on immigrations. Add extra 1M people each year for next 30 years helps a lot.
AAA you're so wrong and pathetic. I already tried to explain you. You just can't understand. There are huge bubbles everywhere. They will burst and consumer will pay for everything. Rates must be around 10-12% Rate cuts out of question Do you even understand what hyperinflation means? Talk to russians and ask about 90s Or you want to have median wage to be around $10 inflation adjusted?