I saw some of his speech this morning on CNBC. He looked pretty nervous and completely waffled on the follow up questions.
He also completely refused to speculate the likelihood of a recession, which to me is an answer in itself.
He’ll be able to blame sub-prime on the demise of financials for a while but he’s screwed no matter what now:
If he cuts rates:
– It won’t be enough to save the mortgage banks
– It will further weaken the dollar
– It will piss off the Chinese which BB isn’t “overly conerned about”
If he leaves rates:
– The dollar will at best stabilize at it’s lowest point ever
– Wall Street will have another sell-off
If he raises rates:
– The dollar will be respectable eventually again
– The sub-prime mortgage crisis will play out much quicker
– Stocks will fall
