Friday, August 10, 2007

What Did the Fed Do?


Putting out fires with gasoline.

14 comments:

Sweet Cashback said...

MURST!

Sweet Cashback said...
This comment has been removed by the author.
Sweet Cashback said...

Just saw a report saying that consumer credit card debt is rising faster as a result of the mortgage/refi crunch.

I wonder what that will do long term to the Murse market.....

Rob Dawg said...

We'll all need bigger murses.

Reader "GT" submits this SafeHaven article pushing the case for asset deflation. Interesting and I generally agree but think the market for consumables (commodities) may be inflationary making it possible to do some fancy accounting and prove any scenario you wish.

Peripheral Visionary said...

The Fed moves have been much smaller than the ECB moves. The ECB usually is more level-headed than the Fed, but this time I think they made a mistake; the huge cash infusions only panicked the markets further. The more modest (well, sort of) amounts coming from the Fed are less likely to be interpreted as a sign that things are worse than they appear.

I do think that the Fed has a role in ensuring an orderly marketplace, and part of that means occasionally taking action when things get out of control. No, they didn't do that on the way up so it raises the question of why they're doing it on the way down, but it's still part of their role. De-leveraging and the accompanying pain are part of a very necessary correction for the markets; the Fed's job isn't to prevent that, but rather to try to keep it from devolving into a full-on stampede-to-the-exits panic.

All that said, I think they acted too early. They would have been better off conserving their ammunition for a full meltdown instead of blowing it on trying to tamp down volatility that isn't going away anytime soon. The psychological effect of cash infusions is more important than the money itself, and that tends to be diluted the more they use it. If there's a full-on meltdown, all they really have left in the arsenal is the Holy Hand Grenade of Rate Cuts.

Akubi said...

In terms of breakfast cereal advertising the Fed Crunch-a-tized™ the credit crunch.

Unknown said...

I wanna know what Chopper Ben is going to say when they ask him how he plans on lowering interest rates AND pumping liquidity into the system whilst at the same time claiming he is "fighting inflation".

The Bernake teeter-totter is a tad heavy on one side, me thinks. :-)

Akubi said...

@Rob Dawg,
Thanks for your murst 6 Degrees of Casey Serin entry.
Regarding previous discussions involving cars, transportation and such, please note Gypsy Pete's (aka pmspms(tm,yadda yadda)commentary here:
3 hard truths via Shell oil CEO

kdella said...

Dear God, Sweet Cashback, I do believe you've hit on something here.

I went to the link you provided, and thought it was so funny, I went to this kid's page to check out more of his videos. So far, I've discovered that he drives a VW ("Cops, Frostys & My Car")! Hmmmm....

Now, I've found a video entitled "Ask A Gay Man: Hair Edition." This looks promising.

OH! Now I've even found "For All the Haters!"

Will the coincidences never end?!?

Akubi said...

I'm pretty concerned about the CO2 emmissions of my Pomeranians.
In fact, I blame their ongoing fart parade on Trader Joe's baked tofu and Indian beans...And they claim to be healthy for that matter! Someone should be held liable for this mess!

Akubi said...

The f-ing Palak Paneer destroyed my atmosphere...;)

Akubi said...

K, kdella itsallgood as long as you don't feed your pets too many beans.

Akubi said...

Murst time watching the You Tube presentation, but it reminded a tad of Bauhaus and anime.

H Simpson said...

Not sure if anyone else noticed in that video:

1. 5 bullets in a six shooter
2. the stitch marks across the hero's kister. Like someone took a couple chomps out of it

Got to be Ben B..


Going to race the sailboat. You queue up "it's a beautiful day" from U2 and I will get some photos to back it up... :>)



H.