audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
So clearly Bernanke was seeing some stress in the financial system pretty early then. At that point - it's not clear what else the Fed by themselves could do.I will take your word for it that the NBER 1 year lag is standard. Won't use that as a timing method . I didn't mean that the Fed announced this (my sentence positioning might have led to this impression).
When I looked it up, the Fed did start reducing short rates quite a bit in late January 2008. So maybe Bernanke was quicker then I gave him credit for. I kind of admire the guy, but I liked Greenspan until the wheels came off the economy.
Greenspan was to one who ignored the housing bubble. He admitted later that he didn't think companies would "shoot themselves in the foot like that" or something along those lines. In other words - that companies would take such outrageous short term risks that could result in long term disaster. but that really ignores the short term pressures in capitalism and how professional managers (who aren't necessarily company owners) respond to short-term pressures. They figure they can bail in time and let others take the long term hit.