View Full Version : Save the banks now, and then when things calm down..

03-21-08, 08:52 PM
Punish them like the bitches/bastards they are!

That's my suggestion to the fed :)

Jim Nickerson
03-21-08, 09:42 PM
Fasten your seat belts
Commentary: Fed soon could raise rates as aggressively as it has cut them

By Mark Hulbert (http://www.marketwatch.com/news/mailto.asp?x=109+104+117+108+98+101+114+116&y=Mark+Hulbert&z=marketwatch.com&guid=%7Be30ed46a-6322-4be1-855c-1050eae86dde%7D&siteid=mktw), MarketWatch
Last update: 12:01 a.m. EDT March 21, 2008 http://www.marketwatch.com/news/story/newsletter-editor-fed-could-raise/story.aspx?guid=%7BE30ED46A%2D6322%2D4BE1%2D855C%2 D1050EAE86DDE%7D

Seiver has one more reason now than in late January for believing the Fed is done with its rate cutting: There is growing dissension among members of the Fed's Open Market Committee (FOMC) about the wisdom of cutting rates. "The FOMC has to speak with close to one voice," he said, if the Fed is to not spook investors and do more damage than good. "The market would take it very badly if there were a lot of dissenters."

In voting earlier this week to cut rates by three-quarters of one percent, of course, the FOMC already faced dissension, with two members voting against doing so. "Two dissents are a serious problem," Seiver believes. "My guess is that there would have been other dissenters if the Fed had tried to cut a full point," which is what the Fed futures market was otherwise expecting prior to the Fed meeting.

And Seiver guesses that there will be even more dissension if the Fed, absent another Bear Stearns-like crisis, tries to cut rates any further.
This issue of internal Fed dissension comes on top of the reasons that Seiver mentioned in late January for thinking that the Fed was close to ending its rate-cutting: The significant and growing threat posed by inflation, and the even bigger worry that the Fed could soon find itself so behind the curve in responding to financial crises that it becomes "180 degrees out of phase" with what's really going on in the economy.

Seiver is confident that Fed chairman Ben Bernanke is well aware of the risks involved with the Fed falling too behind the curve. That is why, Seiver believes, Bernanke is likely, once he starts to raise rates to counter the inflationary threat, he "will raise rates just as aggressively" as he has recently cut them.

When it becomes clear that the economy is going to recover from its current period of weakness; "the Fed will take back [the rate cuts], and will take them back fast."

The bottom line from Seiver's point of view? Get ready for a whole lot of volatility.

03-22-08, 01:48 AM
Punish them like the bitches/bastards they are!

That's my suggestion to the fed :)

bspin, I doubt that your suggestion will gain any traction with the Fed, but at some point the mob, the hoi polloi, the masses, the bilked bumpkins, the great unwashed, may take it up with a vengeance.

03-22-08, 09:51 PM
Punish them like the bitches/bastards they are!

That's my suggestion to the fed :)
You do realize that the Fed is nothing but a private organization with representatives from the banks right?

I would not be surprised that soon the public opinion of "the Fed is our friend" will change and many will realize what kind of people run this organization and what their motivations are. And just because they have some academic assigned by the president of the US as their pr person does not make it any different, on the contrary it obfuscates who is actually running the show there.