FED "liquidity injections" is like a tylenol for a cancer patient.

Discussion in 'Trading' started by pavlov0032, Mar 13, 2008.

  1. I wonder how dumb Bernarke and FOMC gotta be to think that by throwing money at the banks and keeping "poisonous" portfolio of sub prime loans they can reverse the recession and avoid liquidity crunch?

    I mean let the market drop like a basketball and bounce back! Whats wrong with that?

    Why would you prolong misery of a sick patient?

    We all end up paying for these idiotic injections with higher taxes, inflation, etc..

    USA still does not allow a mother to take 1 month off after a birth of a child because there "no money" for that kinda thing, but we find 400 bln dollars to throw into the wing and SUPPORT BAD BUSINESS DECISIONS!!!

    I mean how F-up is that?

    these 400 bln could be used for free college education for SEVERAL GENERATION of students, or myriad of other god causes..

  2. its quite simple;the fed is placating to the financial markets and ignoring the much larger/important picture.this will not end pretty.
  3. its sad as hell. its funny everyone everywere is now screaming to bernanke to stop lowering rates and destroying our futures as the $ crumbles and he's not listening. as all have said let the ball fall and were it falls it falls and we can get on with this and start over. instead he's keeping the sick patient who will still die alive only to have spent millions on his care that goes to waste.
  4. S2007S


    Everyone wants more rate cuts, but in reality like I have been saying over the past couple of months, lowering the rates is going to create more problems for this economy. I really think he should keep the rates unchanged on March 18th. As we all know this is highly unlikely, I think he goes for a maximum 50BP cut, which might send stocks further down due to the fact they are anticipating a 75bp.
  5. The Fed has not deviated from the Fed Funds Futures, so why would they next Tuesday?
  6. The OP has a point. Mom's should be able to spend time with their new borns and even receive money from the government to help, like a baby bonus as in other countries.

    I'm fiscally conservative, but a Mom rasing her child is a lot of hardwork. A single mom has no choice but to work and neglect her kid so she can afford to feed it.

    The fed needs to let risk premiums be re-priced and let the market bounce. Dow sub 10,000 is not the end of the world. If anything all these bailouts are only making the problem exponentially worse.

    We almost deserve to fail as a country for all the idiotic things we do here in America. My dumbass may goto hell for being part of the four more years crowd and therfore partly responsible, but maybe a vote for Obama will change that.
  7. At one point things were getting brutal. Bets were placed for a 1.25% cut. At first I thought these guys were idiots but then I remembered what happened in January...
  8. kongkaka



    Federal Reserve Chairman Ben Bernanke should resign and the Fed should be abolished as a way to boost the falling dollar and speed up the recovery of the U.S. economy, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe Wednesday.

    Federal Reserve
    The Federal Reserve headquarters in Washington, DC.

    Asked what he would do if he were in Bernanke's shoes, Rogers, who slammed the Fed for pouring liquidity in the system and accepting mortgage-backed securities as guarantees, said: "I would abolish the Federal Reserve and I would resign."

    If this happened, "we don't have anybody printing money, we don't have inflation in the land, we don't have a collapsing U.S. dollar," he told "Squawk Box Europe."

    The Federal Reserve announced on Wednesday a rescue package that it would put around $200 billion into banks and investment houses and allow them to put up risky home-loan packages as collateral.

    Wall Street responded to the news with the biggest rally of the year, but Rogers reminisced of the 1970s, when the Fed printed money to avert a recession, boosting inflation and then forcing interest rates to more than 20 percent to keep a lid on price rises.

    "No country in the world has ever succeeded by debasing its currency," he said. "That's what this man is trying to do. He's trying to debase the currency as a way to revive America. It has never worked in the long term or the medium term."

    'Socialism for the Rich'

    The Fed's move to accept risky collateral is not part of the central bank's business, he added.

    "What is Bernanke going to do? Get in his helicopter and fly around the world and collect rents? That's absurd," Rogers said.

    A recession may be a good way to clean up the economy, while trying to prevent one may cost more and actually worsen the recession, Rogers said. Also, investment banks should be allowed to fail.

    "Listen, investment banks have been going bankrupt since the beginning of time. If people make mistakes -- if you bail out every investment bank that gets in trouble, that's not capitalism, that's socialism for the rich," he said.

    The weakest financial institution is Fannie Mae, in Rogers' opinion, "but all of them have problems."

    He said he had a short position on all investment banks and is buying agricultural commodities such as cotton, wheat, coffee and sugar and was also buying the Chinese yuan and the Japanese yen.

    "Buy agriculture. Agriculture is one of the few places where you're going to make a fortune in the next years," Rogers said.
    © 2008 CNBC.com