Who Do You Trust?
Hubba-Hubba, Who do you Trust? ...
Dallas Fed Head Fisher: "I don't know if it (twin 50 bps Fed cuts) surprised the markets or not...on the other hand, our job is not to satisfy the markets.
Over-correcting our course with too aggressive a shift in the fed funds tiller would have, I believe, undermined the discipline...
that market forces impose upon wayward financial institutions and investors. Moral hazard is a dangerous predicament for any central banker.
Yet we had an unsettled money market riddled with angst. A money market that, in my view, was going into a defensive crouch in which even the best...
operators feared that the positions taken by their less prudent brethren may come a cropper and seize up the entire system."
Answer: In "Fed - elity", We Bust... In Fleck, We Trust...
From Flecks latest, Bernanke: The Anti Robin Hood...
"By slashing the federal funds rate, the Federal Reserve chief robbed from the country's future to give a gift to Wall Street.
And a lot of ordinary Americans will end up getting hurt.
The Fed telegraphed the following message: We don't care what happens to the dollar or, by extension, the Treasury market. We care only about Wall Street.
The most important development in the wake of its action was the decrease in the price of longer-term Treasurys...
as rates out 10 years and longer rose over 25 basis points over the next three days. Another consequence is that the moral hazard has been raised yet again.
It didn't take long for someone who probably should have gone out of business for acting irresponsibly to start whining about wanting some more help at the bailout trough.
That would be Countrywide Financial CEO Angelo Mozilo, who last Wednesday suggested...
that Fannie Mae ought to be allowed to buy mortgages of up to $850,000. (Current JUMBO limit 417K.)
I don't think the Fed's punch-bowl fill-up will be able to ward off recession or restart the housing bubble.
All the Fed will have accomplished is to postpone some of the fallout from our current problems while making them even worse in the long run."
Dallas Fed Head Fisher: "I don't know if it (twin 50 bps Fed cuts) surprised the markets or not...on the other hand, our job is not to satisfy the markets.
Over-correcting our course with too aggressive a shift in the fed funds tiller would have, I believe, undermined the discipline...
that market forces impose upon wayward financial institutions and investors. Moral hazard is a dangerous predicament for any central banker.
Yet we had an unsettled money market riddled with angst. A money market that, in my view, was going into a defensive crouch in which even the best...
operators feared that the positions taken by their less prudent brethren may come a cropper and seize up the entire system."
Answer: In "Fed - elity", We Bust... In Fleck, We Trust...
From Flecks latest, Bernanke: The Anti Robin Hood...
"By slashing the federal funds rate, the Federal Reserve chief robbed from the country's future to give a gift to Wall Street.
And a lot of ordinary Americans will end up getting hurt.
The Fed telegraphed the following message: We don't care what happens to the dollar or, by extension, the Treasury market. We care only about Wall Street.
The most important development in the wake of its action was the decrease in the price of longer-term Treasurys...
as rates out 10 years and longer rose over 25 basis points over the next three days. Another consequence is that the moral hazard has been raised yet again.
It didn't take long for someone who probably should have gone out of business for acting irresponsibly to start whining about wanting some more help at the bailout trough.
That would be Countrywide Financial CEO Angelo Mozilo, who last Wednesday suggested...
that Fannie Mae ought to be allowed to buy mortgages of up to $850,000. (Current JUMBO limit 417K.)
I don't think the Fed's punch-bowl fill-up will be able to ward off recession or restart the housing bubble.
All the Fed will have accomplished is to postpone some of the fallout from our current problems while making them even worse in the long run."
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