The Fed is Good?

[greg]

U.S. stock futures soared Friday, erasing an early decline after the Federal Reserve approved a half percentage point cut in its discount rate on loans to banks.


Stock futures jump on discount rate cut - Yahoo! News

 

[VaCollector]

Uhhh.... The Fed is God!??....at least to bank stock holders!

Thank you Mr. Bernanke!

 

[Peaceful_Warrior]

Well sounds like good news considering I'm buying a home this month!

 

[Eagle43]

Market.view | The Fed keeps its head | Economist.com
Well, the Economist thinks he's ok....

"It is not the Fed’s job to shield financial actors from risk, and Mr Bernanke no doubt realises that his credibility is at stake. If a quick rate-cut touched off a renewed episode of inflation, it would be difficult for the Fed to rapidly reverse course. Mr Bernanke must also be acutely sensitive to the common criticism that his predecessor, Alan Greenspan, overshot the mark by dropping the federal funds rate to 1% in the wake of the downturn of 2001, thereby encouraging the markets into a renewed phase of exuberance. Mr Bernanke is well aware of the hats that belong to him and the ones that do not. If broader indicators begin to show weakness spreading throughout the economy, then the Fed may act to ease a forthcoming downturn. But do not expect Mr Bernanke to bend to the demands of overextended investors suffering through short-run volatility. As the chairman knows well, he must always keep a cool head even as others lose their shirts."

The article's gist is he kept his cool, did what he had to do to alleviate the noise, and with the long view in mind, just might NOT drop the federal funds rate in September.

 

[Beststash]

It’s funny that the major premise of capitalism is that market forces will solve all problems. Then when market forces negatively affect the hip pockets of capitalists they want the government to bail them out.

Rating agencies like Moody’s Investors Service, which get paid a lot of money for rating mortgage-backed securities, seem to be performing much like the major accounting firms that rubber-stamped the inflated, deceptive financial statements of the Enrons and the Worldcoms.

This present liquidity crisis is a perfect time to put some tough regulatory laws in place to stop this deceit. But I guess that is too much to ask.

Q. Why will capitalism always survive?

A. Because socialism will always be used to save it.

 

[greg]

It’s funny that the major premise of capitalism is that market forces will solve all problems. Then when market forces negatively affect the hip pockets of capitalists they want the government to bail them out.

Rating agencies like Moody’s Investors Service, which get paid a lot of money for rating mortgage-backed securities, seem to be performing much like the major accounting firms that rubber-stamped the inflated, deceptive financial statements of the Enrons and the Worldcoms.

This present liquidity crisis is a perfect time to put some tough regulatory laws in place to stop this deceit. But I guess that is too much to ask.

Q. Why will capitalism always survive?

A. Because socialism will always be used to save it.

And, to paraphrase Adam Smith, we will always need a custodian to mind the store.

 

[starter82]

Inflation and currency devaluation are more on my mind than the rest of it. Let the markets work!