History won't treat 'Bernanke put' kindly

Discussion in 'Wall St. News' started by THE-BEAKER, Sep 19, 2007.

  1. Wall Street raised a 300-point cheer to Ben Bernanke after he unexpectedly slashed US interest rates by half a percentage point rather than the quarter-point cut most investors expected. History will not treat the "Bernanke put" so kindly.

    Alan Greenspan, the Fed chairman's celebrated predecessor, spent 20 years putting off the day of reckoning by cutting the cost of money at the first whiff of trouble.

    That increasingly discredited policy simply shifted America's bubbles from one part of the economy to another and will increase the size of the bill when it eventually comes to be paid.

    Bernanke had the opportunity to signal a break with the past and he fluffed it. Fears that "Helicopter Ben" is just a chip off the old block look spot on.

    There are two possible readings of the Fed's decision. Either there's something nasty in the woodwork that we haven't fully understood or Wall Street's cheap money addicts have simply been handed one more fix for their catastrophic habit.

    The statement accompanying the first cut in four years underscored the confusion at the heart of the US's politically-driven monetary policy. The FOMC noted that inflation risks remain – and we'll know more clearly today how serious the threat from rising prices is – but in a pre-election year no one is prepared for the tough love required. This was Ben's first big test. He's blown it.

  2. I agree. Time to short for a test lower. How many interest rate cuts can he make before he runs out of ammunition?
  3. gangof4


    nice to see somebody in the press has an understanding of what just happened- had to cross the pond for it whilst the heads @ cnbc were so giddy that i thought Maria should excuse herself to go clean herself up and grab a change of clothes...
  4. Simply a bail out of the Street, at everybodies expense. But what else is new?

    Oh well. Understand it, and trade it. But it's horrible.
  5. john12


    suprised at the how many people taking shots at what the fed did. i think this is were all turn on the fed and they lose some respect and power. what they did is damm immoral and will fail
  6. jwecme


    Beaker if you cannot beat them then join them. This is good news for the wise investor. You have been given a free ticket to make money so don't complain go long everything real like commodities and stay out of everything paper.

    Situations like this are great as it is very easy to read the central banks intentions they will inflate until the dollar dies so position yourself accordingly and you can clean up.
  7. zer0


    A speculator can profit from any FED decisions it's OBVIOUS we're not talking about that. What we're talking about here is the health of the US & World economy. The inflation and the collapse certainly coming in weeks/months/years will be really ugly for a lot of people. We will remember then that US policymakers played soft to please their wall street immoral pimps.
  8. dtan1e


    i think its to print more to fund the war /w Iran, & after u rule Iraq & Iran to pay off all the debt with their oil