Fed shouldn't have even cut 25 bp

Discussion in 'Trading' started by detective, Dec 11, 2007.

  1. You don't throw more debt on top of the mountains of debt out there. You need a cleansing of the financial system, put some crappy banks out of business, get a bunch of hedge funds eliminated, and reduce the junk CDOs and other assorted garbage that has accumulated over the years.

    The economy needs a recession right now for its long term health, without one, you will have the same shenanigans repeating.

    The Fed has no balls which is why they pandered to the market and gave them 50 bp 25 bp and 25 bp over the last 3 meetings. There should have been no rate cuts during this period, unemployment is still 4.7%! What are they trying to preserve, Wall Street banker bonuses? Absolute insanity out there.

  2. just be careful what you wish for. The overleveraged CDS (credit default swap) positions will make CDO losses look like child's play if we start having corporate defaults.

    The fed, at any cost, will prevent those corporate defaults so this 'CDS heroin' addiction doesn't show its nasty withdrawal symptoms.
  3. never should have had a central bank in the first place. invitation for disaster
  4. The only way to clear out the excesses of the debt bubble over the past few years is to cut off the spigot and reduce the debt load. It is going to be painful, but there will be no Great Depression because of it. You get rid of a few crappy banks, lenders, and hedge funds, and you start with a stronger base for renewed economic growth. This constant recession avoidance only prevents the financial system to clean up its balance sheets and irresponsible lenders.
  5. "irresponsible lenders" don't just spontaneously self-destruct upon bankruptcy. They find employment and create new banks of equal or more ridiculous concept.