It appears the Fed is trying to restore some sort of order here. The root cause of all these problems are bad mortgages which resulted from ridiculously low rates and literally no underwritng, the Fed recognizes this. I don’t think they see the Fed Funds rate as being too high. I imagine the market will price in a pretty steep Fed Funds rate cut, I don’t think that is going to happen and in the face of a structurally weak dollar I still think it would be a mistake. IMO they need to send the message that they will not bail lenders out of the bad loans and poor practices. This latest action was not a bail out and was probably the right move.
I agree LA. I think they just want to keep the system functioning. Not fix it. We will see what happens… DJIA is off its opening high already….We’ll see how the day goes.
I agree LA. I think they just want to keep the system functioning. Not fix it. We will see what happens… DJIA is off its opening high already….We’ll see how the day goes.
I agree LA. I think they just want to keep the system functioning. Not fix it. We will see what happens… DJIA is off its opening high already….We’ll see how the day goes.
One of the FED governors had promised to cut the rate if there is a "Calamity". Run on Countrywide (and I read a bit on ETRADE too) was a "Calamity". Having seen S&L, I agree with him that a run on a major bank is a Calamity.
One of the FED governors had promised to cut the rate if there is a "Calamity". Run on Countrywide (and I read a bit on ETRADE too) was a "Calamity". Having seen S&L, I agree with him that a run on a major bank is a Calamity.
One of the FED governors had promised to cut the rate if there is a "Calamity". Run on Countrywide (and I read a bit on ETRADE too) was a "Calamity". Having seen S&L, I agree with him that a run on a major bank is a Calamity.
